Across the country, unemployed Americans and small business owners are struggling with an economy that remains fragile. Every day, businesses are forced to turn down qualified applicants because they aren’t certain if they will be able to support expanding their workforce. This uncertainty is holding back our economy and weighing heavily on the minds of millions of Americans.
Throughout the current 112th Congress, House Republicans have been fully committed to reducing this uncertainty and creating an economic environment that allows our job creators to start putting unemployed Americans back to work. But time and again we have seen our efforts ignored by the Senate Democratic leadership. And it seems that House Republicans aren’t the only ones upset with the Senate’s lack of action. We have reached the point where even Democrat Senators are fed up with the Senate gridlock. Senator Joe Manchin (D-WV) recently said, “It seems all we care about is scoring political points to be used in the next election.”
While Majority Leader Harry Reid (D-NV) remains unwilling to take up nearly two dozen jobs bills that are currently stalled in Senate gridlock, House Republicans continue to pass jobs bills. We remain committed to working with Congressmen and Senators from across the political spectrum to find common ground, move forward and help our businesses hire new employees.
Small businesses are the engine of our economy, and they have traditionally led job creation during economic recoveries. But in order to expand, small businesses need access to capital. Without access to capital, businesses lack the resources to enhance their operations and hire new employees. In the wake of the financial crisis, many small businesses are finding that it is more difficult for them obtain credit from banks. With credit tight, equity financing is an increasingly essential means of providing small companies with the capital they need to grow and create jobs. Equity financing allows small businesses to expand their operations by accessing new capital from investors, who purchase ownership stakes in a company in exchange for a share of the company's future profits.
Last week, the House passed legislation that would help small businesses and entrepreneurs access the capital they need to grow and create jobs. H.R. 2940, the Access to Capital for Job Creators Act, amends current Securities and Exchange Commission (SEC) regulations that prohibit businesses from raising capital by selling their securities through general solicitations or advertising, unless they register these securities with the SEC. Currently, businesses are only able to sell unregistered securities if they have an existing relationship with the investor. This requirement significantly limits the pool of potential investors and severely hampers the ability of small companies to raise capital and create jobs. H.R. 2940 would remove these restrictions and allow companies greater access to new sources of capital to grow and create jobs.
The House also passed H.R. 2930, the Entrepreneur Access to Capital Act. This bill would create a new SEC registration exemption for securities issued through internet platforms. Increasingly, groups of small investors are pooling their money, typically with very modest individual contributions, to support an effort by a company to expand their operations. As this legislation is targeted at small businesses, a business cannot offer more than $1 million in securities annually, unless they provide investors with audited financial statements. H.R. 2930 is also targeted at groups of small online investors, so an individual's annual investment cannot exceed $10,000. Both the individual investment cap and the annual cap on securities offerings are indexed to inflation to ensure that future investors and businesses can continue to benefit from this bill. Current SEC regulations impede this new innovative and lower-risk form of financing. By exempting small business securities from registration with the SEC, H.R. 2930 will enable entrepreneurs to more easily access capital from potential investors across the country to expand their business and create new jobs.
On the other side of the Capitol, Senate Democrats decided to push forward with a vote on a fundamentally flawed bill that would call for more than $55 billion in additional spending, while also raising taxes. This bill was part of President Obama’s jobs plan. While there are some parts of the President’s plan that both Republicans and Democrats support, using a permanent tax increase to pay for temporary spending is not one of them.
Like the other parts of the President’s jobs plan that have come before the Senate, this bill failed. In fact, this bill actually contradicts the President’s call for immediate action. Less than 10 percent of the spending would occur next year, while more than 40 percent would not be spent until 2015. Meanwhile, the tax increases would immediately go into effect at a time when we can least afford to raise taxes.
Unlike the Senate’s failed efforts, the House passed Republican jobs bills are designed to improve our economy, not to score cheap political points. While House Republicans continue to lead the effort in passing bipartisan jobs legislation, the Senate continues to trip on its own feet. The most recent House jobs bills represent a continued effort by House Republicans to find common ground to work with both the Administration and the Senate to help businesses improve our economy and reduce unemployment. I sincerely hope that these bills are not simply added to the list of House passed job bills that the Senate Majority leaders seem to be using as little more than doorstops.
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