Jobs Bill Bogs Down In Senate

small business bill SenateBy Jim Abrams

WASHINGTON -- A small business investment bill that had appeared to enjoy wide bipartisan support was in danger of collapsing Tuesday after Senate Democrats and Republicans split over two attempts to amend it.

The legislation, which gives small businesses and startups a break from some federal regulations so they can more easily raise capital, hit a wall after Senate Republicans rejected Democratic attempts both to add investor protections and link the bill to extension and expansion of the Export-Import Bank.

The partisan clash came less than two weeks after the House passed the measure 390-23 and, with support from President Barack Obama, it seemed to be on a fast track toward becoming law.

Senate Majority Leader Harry Reid, D-Nev., said Republicans were making a "huge mistake" in blocking the reauthorization of the Ex-Im Bank, an agency that provides finances for U.S. companies trying to sell their products abroad, and called a closed-door meeting of Democrats to discuss how to proceed.

Reid's office said later there would be another procedural vote Wednesday on keeping the bill alive, and Democrats suggested the leadership would try to bring up another amendment. But it was unclear whether the bill now had enough Democratic support to pass.

Sen. Carl Levin, D-Mich., one of the sponsors of the amendment to increase investor protections, said making small changes to the bill were insufficient, and he couldn't vote for it.

The Ex-Im Bank, which in the past has been supported by both parties, also became the unexpected subject for an angry debate.

Senate Republican leader Mitch McConnell, R-Ky., said many Republicans support the Ex-Im Bank, but that adding it to the small business bill "would only delay passage of this bipartisan jobs bill." His Republican colleagues fell in line, including Sen. Richard Shelby of Alabama, top Republican on the Senate Banking Committee and a supporter of the measure to reauthorize the bank.

Reid issued a statement saying Republicans voted against the Ex-Im Bank provision "simply to provide cover for tea party extremists in the House."

He said the crowded Senate agenda would make it difficult to return to the bill, hurting U.S. companies trying to do business abroad. The bank's authorization expires on May 31, but it may soon reach its lending ceiling of $100 billion. The Democratic amendment would have extended the bank for four years and raised the lending limit to $140 billion.

Bank financing last year supported $41 billion in U.S. exports from more than 3,600 U.S. companies.

Some conservative groups, such as the Club for Growth, have urged conservatives to kill the bank, saying it distorts the market and picks winners and losers. The bank also divides the aircraft and airline industry: Boeing Co. is a major beneficiary of Ex-Im Bank financing, while Delta Air Lines has criticized the bank for providing loan guarantees that allow foreign airlines to save money on new U.S.-made planes, resulting in unfair competition.

Both amendments were defeated on near-party line 55-44 votes. Sixty votes were needed to advance the measures.

The small business bill, which its House Republican supporters refer to as the JOBS Act, would exempt small businesses and startups from some Securities and Exchange Commission regulations. The centerpiece for the six bills in the package is a provision that would reduce the costs of companies seeking to go public by phasing in over five years SEC regulations that apply to what are categorized as "emerging growth companies." That status would be in effect for companies with annual gross revenue of less than $1 billion.

Senate Democrats argued that it would exempt more than 80 percent of current initial public offerings or IPOs. Their defeated amendment would have narrowed the qualified companies to those with less than $350 million in annual revenues.

The measure also removes SEC regulations preventing small businesses from using advertisements to solicit investors, raises from 500 to 2,000 the shareholders a company or community bank can have before it must register with the SEC and allows smaller companies to sell up to $50 million in shares, up from the current $5 million, without filing some SEC paperwork.

One of the more hotly-debated provisions removes SEC restrictions on "crowdfunding," a practice of using the Internet to raise capital from a large number of smaller investors. The measure limits individual contributions to $10,000 or 10 percent of the investor's annual income and requires the intermediary or issuer of the offering to provide the SEC with information about the transaction.

Within days of the House vote, questions arose about consumer protections. Mary Schapiro, chairman of the SEC, listed a number of concerns, including that the bill would remove the firewall between research analysts who are supposed to provide objective information about investments and investment bankers in the same firm whose main function is to encourage people to invest. AARP said the elderly are disproportionately the victims of investment fraud and said it agreed with Schapiro that, absent safeguards, the House bill "may well open the floodgates to a repeat of the kind of penny stock and other frauds that ensnared financially unsophisticated and other vulnerable investors in the past."

The White House, while maintaining support for the bill, issued a statement last week saying it supported Senate efforts to ensure there are sufficient safeguards to prevent abuse and protect investors.

"None of us wants this legislation to be a boon to boiler room operators and Ponzi schemers targeting our nation's retirees or anyone else," Sen. Jack Reed, D-R.I., said.

Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, stressed Monday that the House bill contains strong investor protections and that Senate Democratic objections were part of a "cynical campaign strategy of running against a so-called do-nothing Congress."

House Majority Leader Eric Cantor, R-Va., the chief backer of the House bill, on Monday criticized what he said where "11th hour claims about phantom investor protection issues or adding partisan amendments like the Ex-Im Bank reauthorization that threaten to derail the bill."

Cantor's office said he was working on a separate Ex-Im Bank overhaul bill that he hopes to bring to the House floor before the end of the month.

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Suddenly the libs want to protect the investors, just the way they have protected the tax payers with the Solyndra deal.

March 21 2012 at 11:40 PM Report abuse +2 rate up rate down Reply

Why can't these guys just vote on a bill by itself?

March 21 2012 at 11:39 PM Report abuse +2 rate up rate down Reply
1 reply to ZMAN's comment

No wonder there is so such turmoil in the congress and senate these days.
Every bill has to contain certain stipulations that either one party or the other has to concede to.
I agree with you!
One bill at a time attached to no other bill!
Maybe then they could get in and out of their chambers alot quicker if they only had one topic to vote on.

March 22 2012 at 6:29 AM Report abuse rate up rate down Reply

So why did Reid try to attach the Eximbank to this bill instead of introducing it separately? I think we know the reason. He knew he didn't have the votes for the Eximbank but thought if he attached it to something that was popular, it would sail through. He doesn't negotiate--he attacks.

March 21 2012 at 10:45 PM Report abuse rate up rate down Reply

Enough small investors have been hurt by these small business startups. There has to be some protection for the investors and the Republicans don't care if they're protected. No Regulation is what started this whole banking crisis. Now they want to make it worse? It's like putting to a fire by spraying it with gasoline.

March 21 2012 at 10:31 PM Report abuse rate up rate down Reply
2 replies to Sensible's comment

Democrats, Barney Frank, et al, cause the whole banking crisis forcing them to loan money tor homes to people who had no chance to pay it back. Small investors either take a risk or not but stand to make rewards for their risks. Try being a start up company. I am on my second one after being successful in the first with no investors but me. I have done it. Have you?

March 21 2012 at 11:04 PM Report abuse rate up rate down Reply

No, what started the banking crisis is politicians putting their two cents where it did not belong.

March 21 2012 at 11:42 PM Report abuse rate up rate down Reply

Face the truth, this isn't a split between dems and repubs about amendments, it is the usual way of Reid the man of NO!

The bill had bi-partisan support but Reid is bottling up any action that will help the economy and businesses. He is a hypocrite. Even Obama realizes the importance of job creation, apparently Reid does not.

March 21 2012 at 8:52 PM Report abuse +5 rate up rate down Reply

numskull mcconnell at it again. anything to help the tea-baggers

March 21 2012 at 6:52 PM Report abuse -2 rate up rate down Reply

Obama has done nothing for small business in 3 years except cause healthcare costs to increase as well as paperwork. Why should we be surprised now? No bailout for small business-even though we constitute 80% of all employment in the private sector. The bailouts are reserved for the noisest squeaking wheels-the banks and automotive. All we are asked to do is pay for everyone else. it's a great life.

March 21 2012 at 5:58 PM Report abuse +2 rate up rate down Reply
1 reply to shalebrook's comment

The squeaky will ALWAYS gets the grease!

March 22 2012 at 6:31 AM Report abuse rate up rate down Reply

Looks like Harry is singled handedly stalling the government again. He planned on fighting this as soon as the house passed it.
2 way Harry, his way or no way. He should just get out of the way.
3 years he hasn't come up with a budget. Constantly pointing fingers, playing the blame game.
Now much of a leader

March 21 2012 at 5:54 PM Report abuse +3 rate up rate down Reply
b.f.k. sr

McConnel says adding im-ex to bill will delay passage but he fights not to add it. yhe fight has delalayed passage but since it is his fight that is ok, and it is still the dems fault.

March 21 2012 at 5:18 PM Report abuse -2 rate up rate down Reply
1 reply to b.f.k. sr's comment

Well, the Dems are the ones who added the amendments to a bill that was going to pass easily by most accounts.

March 22 2012 at 3:15 AM Report abuse rate up rate down Reply

Stalled in the Senate. What a surprise.

March 21 2012 at 4:17 PM Report abuse +2 rate up rate down Reply

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