In a rare show of bipartisanship, the House on Thursday approved a package of legislation intended to help small businesses jumpstart the economy.
Even more unusual, President Barack Obama said he would sign the Republican measure once it clears the last hurdle — the Democratic-controlled Senate where some of these measures have languished since last year.
Republicans took those bills and combined them with a few new ones to create the Jumpstart Our Business Startups (JOBS) Act, which passed on a 390 to 23 vote.
The legislation would increase capital formation, spur the growth of startups and pave the way for more small scale businesses to go public thereby creating more jobs.
“Half of our population is now being classified as either low-income or in poverty,” said Rep. Jeb Hensarling (R-Tex.), chairman of the House Republican Conference. “Our constituents are demanding jobs.”
“This is a bill that will give these emerging growth companies — perhaps the future Googles, Apples, Home Depots, Starbucks — that opportunity to access equity capital where the hurdles, the red tape, the cost burdens, have been too high,” Hensarling said.
The measure would reduce the costs for a company going public by allowing a reprieve from certain Securities and Exchange Commission (SEC) regulations and allows smaller companies to go public sooner. It creates a new category called an “emerging growth company” for businesses with less than $1 billion in annual gross revenue and protects investors by requiring audits and internal financial controls.
The bill eliminates an SEC ban that prevents small businesses from using advertisements to solicit investors, and removes another SEC regulation that prevents “overcrowding” so that entrepreneurs can raise equity capital from a large pool of small investors.
Senate Majority Leader Harry Reid (D-Nev.) has not said whether he will bring the JOBS package up for a vote, but Republicans are optimistic the Democrats in the other chamber will be forced to follow their lead.
“The difference now is the president says you guys have a good idea,” said Rep. Pete Sessions (R-Tex.).
House Democrats also voiced displeasure with the bill before many voted in favor of it. The rhetoric became so heated, all work on the floor came to standstill Wednesday after Rep. Barney Frank (D-Mass.) accused Republicans of taking credit for one portion of the bill he said was authored by Democrat Rep. Jim Himes of Connecticut.
“That’s shameful… shameful on the part of the Republican leadership that engaged in this cheap maneuver,” said Frank, directing his comments at Hensarling.
“I have never seen truth stood on its head more rapidly than my colleague from Texas. It is they who engage in this credit-grabbing,” Frank said.
That language, offered by Rep. Ben Quayle (R-Ariz.), increases the number of community bank shareholders from 500 to 2,000.
“For the gentleman from Texas, having been part of the leadership that engaged in that shameful maneuver, to now accuse us of being excessively concerned with credit, is the most hypocritical and dishonest statement I have heard uttered in this House,” Frank said.
Frank’s words were deemed in violation of House rules and were stricken from the record, and he was not allowed to speak on the floor again to lead the debate against the JOBS measure. Instead, Rep. Maxine Waters (D–Calif.) led the debate for Democrats.
Himes later spoke on the House floor and said he was okay with Republicans taking credit for his idea. He also took a shot at Quayle’s father, former Vice President Dan Quayle, which is against House rules, but Himes was not reprimanded for his words.
“There may be only one way to spell ‘potato,’ but there are a lot of ways to skin a cat, and if we’re going to skin this cat in this way, I’m OK with that,” Himes said.
Democratic Whip Rep. Steny Hoyer of Maryland said he supported the language “whoever’s name it might have on it.”
“I hope it signals a new willingness to work with us to create jobs,” Hoyer said.
But not everyone agreed with the bill’s intentions.
“By passing this bill, we are not creating a single job,” said Rep. Jared Polis (D-Colo.).
Responded Sessions: “We do not create jobs in this town, it’s the free enterprise system that does that.”