At long last, some truth in advertising in Congress! Today, the U.S. House of Representative is poised to pass a bipartisan “jobs bill” that will actually create jobs — or rather cut away the red tape that is preventing the private sector from creating them.
By liberalizing regulations that hold back emerging growth companies, the Jumpstart Our Business Startups (JOBS) Act — set for a strong House vote today after backing from both the GOP leadership and the Obama administration — would add more than 10 million jobs to the U.S. economy over the next decade. This is my conservative estimate based on the rate of jobs created by startup firms and the loss of jobs due to the regulation-induced dearth of IPO over the last decade.
As I testified last month before a House Energy and Commerce Hearing hearing on “Where the Jobs Are,” data from the respected Kauffman Foundation that have been embraced by the president’s Council on Jobs and Competitiveness show that “over the last three decades, young firms less than five years old have created 40 million new jobs,accounting for all net new jobs during that period.” “But “according to the Treasury Department’s IPO Task Force the long-term decline in IPOs over the last decade may have cost the economy as many as 22 million jobs not created during that period.”
The bill combines six bills that almost unanimously passed the full House or House Financial Services Committee, but have stalled in the Senate for months. One part of the bill, based on a bill from Reps. Stephen Fincher (R-Tenn.) and John Carney (D-Del.), would exempt all but the biggest firms going public from some of the most burdensome provisions of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank financial “reform” of 2010. These rules would only kick in after the company has been public for five years.
Other provisions would lift barriers to innovations such as “crowdfuning,” in which smaller firms can utilize social networks to raise seed capital, and make it easier for entrepreneurs to connect with venture capitalists and angel investors through general advertising. (CEI filed an amicus brief in a First Amendment case challenging the advertising and solicitation ban.)
I am arriving in Austin, Texas, today where some of the most innovative entrepreneurs are displaying their products in the South by Southwest trade entertainment show. For these and other innovators, the Senate must, in President Obama’s words, “pass this bill now.”