Congress unites briefly on JOBS Act; Obama calls on legislators to pass additional measuersJoshua Roberts/Reuters
The deeply divided U.S. Congress is on the verge of the improbable: a broad agreement on measures related to the economy.
Senators on Thursday passed a bill that would make it easier for smaller businesses and startups to raise money from the public, measures that advocates say could unlock a flurry of entrepreneurial activity.
The House of Representatives passed similar legislation by a wide margin this month after President Barack Obama and the chamber's Republican leaders agreed to make common cause of the small-business initiative. An amended version of the bill received the support of 73 senators, compared with 26 who voted against. The House must now hold a new vote on the amended legislation.
Mr. Obama praised the Senate, and called on Congress to pass additional measures, including a stalled transportation bill that would free up hundreds of billions of dollars for road construction. But with Washington focused on the November presidential election, a wide embrace of bipartisanship seems unlikely. The legislation that passed Thursday is based on rewriting existing securities rules and will cost little, if any, money to implement.
Still, agreement in Washington on anything of significance has been rare since Republicans took control on the House in mid-term elections in 2010.
Compromise on lifting the U.S.'s legislative debt ceiling last year was so tortuous that Standard & Poor's stripped the country of its triple-A credit rating. Budgeting has been reduced to a series of extensions of previous appropriations because lawmakers can't agree on a comprehensive financial plan. The U.S.'s export-finance agency is at risk of having to suspend its lending because a core of House Republicans are blocking efforts to increase Export-Import Bank's capital.
The partisan rancour is unpopular with the public, with polls showing support for Congress at record lows. At the same time, Mr. Obama is under heavy attack from Republicans who say the president's new finance and health laws are hurting smaller companies.
In a rare show of political grace, House Republicans and the White House agreed to do each other a favour. By uniting the two behind the Jumpstart Our Business Startups (JOBS) Act, Mr. Obama has tangible evidence that he is willing to cut red tape for smaller companies, while the Republicans are diluting the charge that their priority is to obstruct the President's agenda.
But nothing comes easy in Washington. The JOBS Act has rekindled a debate about safeguarding unsophisticated investors from fraudsters. "We will rue the day that we ran this [bill]through the House and the Senate," Dick Durbin, a Democratic senator from Illinois, said in Thursday's debate. "If we are creating the jobs of new charlatans, these are not the jobs that we should be creating."
Among the strongest supports of the JOBS Act is the technology industry, a growing force in Washington.
Its efforts paid off with legislation that would, among other things, allow smaller companies to solicit potential investors without registering with regulators; and makes legal "crowd funding," which seeks to raise money through dozens of relatively small contributions through websites and social media.
The bill approved by the Senate would allow individuals earning less than $100,000 (U.S.) a year to buy private-share offerings equal to the greater of $2,000 or 2 per cent of their annual income. Currently, only the wealthiest individuals are allowed to buy private shares.
To quiet the critics, Senators amended the JOBS Act to require crowd-funding sites to register with the Securities and Exchange Commission and to force companies seeking money to disclose enough information to allow investors to adequately assess their legitimacy.