JOBS Act Just What Obama Ordered
Rep. Eric Cantor & Rep. Stephen Fincher
February 27, 2012 09:32 PM EST
America has always offered immense opportunity because innovators have had the ability to take risks, work hard and be rewarded for it. Innovators, entrepreneurs and small-business people built the framework for American success, creating legacies lasting generations.
Companies like Ford, Apple and Boeing started as small businesses and became industry leaders, creating high-quality jobs and boosting economic growth. More recently, companies like Google and Facebook were launched by a single idea and then revolutionized the way we live.
The entrepreneurs who had these ideas are the key ingredient in the formula for success and opportunity in America. Each one took a risk and did whatever they needed to do to make it work. In the process, they helped thousands — if not millions — of families, neighbors and friends.
Those who earn their success not only create good jobs and services that improve our lives, they give back and help everyone move just a little bit further up the ladder of success.
Yet, today, the ability of an individual to take a risk and create a small business or startup company is threatened because of the barrage of red tape and uncertainty — much of it from Washington.
Since 1980, startup firms less than five years old have created the vast majority of new jobs in this country, nearly 40 million of them, according to the Kauffman Foundation. The past few years however, have seen a 23 percent decline in these small-business startups — sapping 1.8 million additional jobs from the economy.
Whether it’s due to the threat of higher taxes; or regulations that place higher costs on businesses and limits on who can invest, small businesses and entrepreneurs are frozen in their tracks.
For example, the Securities and Exchange Commission’s increasing regulation has made costs prohibitive for companies to go public — leading to a huge drop in small-scale initial public offerings over the past 15 years. This worrisome statistic highlights the need to reform costly regulations that are keeping companies from growing — particularly because, on average, 92 percent of business expansion and hiring occurs after it goes public.
This cannot become the new normal. We need to do everything we can to ensure that America remains a country of opportunity, in which jobs are created, startups and innovation happen, risks are taken and small businesses flourish.
President Barack Obama in his State of the Union address asked Congress to send him a bill that helps small businesses and entrepreneurs succeed. That is exactly what we intend to do.
Last year, the House worked on a series of bills to remove regulatory barriers that are holding back entrepreneurs and small businesses. Today, we are unveiling a bipartisan legislative package that puts all of these items together: the JOBS Act — Jumpstart Our Business Startups. This represents an important opportunity to work together to help our small-business startups grow, create jobs and get the economy back on track.
The JOBS Act contains several measures to remove the obstacles preventing small businesses and startups from accessing the capital they need to grow. A measure championed by House Majority Whip Kevin McCarthy (R-Calif.) repeals the solicitation ban on companies trying to raise capital, and North Carolina Rep. Patrick McHenry’s bill removes the ban on “crowdfunding,” enabling entrepreneurs to pool investments from smaller investors.
A measure from Rep. David Schweikert of Arizona eases shareholder threshold regulations that slam small businesses with costly requirements before they have the capital to comply. And a bill by Rep. Ben Quayle, also of Arizona, modifies securities regulations governing the registration of small bank holding companies.
These measures will increase capital formation and spur growth, paving the way for more startups and smaller businesses to go public.
The final provision of the JOBS Act gives small businesses a reprieve from costly SEC regulations, allowing them to go public sooner, grow faster and create more jobs.
Individually, these bills have garnered broad bipartisan support from both sides of the Capitol, and from members of the business community who represent current or former startup companies. Specifically, Steve Case, former AOL chairman and founder and a member of the President’s Council on Jobs and Economic Competitiveness, has highlighted the need for these tools to boost startups and has endorsed the JOBS Act.
In January, the council recommended that the president move forward on the measures that we have included in our act, calling them essential to our global competitiveness, economic growth and job creation.
The JOBS Act will help ensure that America remains the best economy in the world. These solutions restore opportunities for Americans who have a dream, work hard, play by the rules and create the businesses that define our nation’s success.
In a time marked by partisan battles and finger-pointing between the White House and Congress, the JOBS Act is an opportunity for both parties in Washington to work together and produce results for our nation’s small businesses and entrepreneurs. We are hopeful that the president will stand by his State of the Union pledge and work with us to pass an agenda that helps entrepreneurs succeed. The president called on Congress to put the measures in a bill and “get it on my desk this year.”
Here it is, Mr. President.
Rep. Eric Cantor (R-Va.) is the House majority leader. Rep. Stephen Fincher (R-Tenn.) serves on the House Financial Services Committee and on the Jobs Creators Caucus.