Business Startups Bill Hits Snags In Senate

The Senate votes on changes to the House JOBS bill requested by consumer advocates and the chair of the Securities and Exchange Commission. As written, the bill would ease disclosure requirements on companies that have as much as $1 billion in annual sales when they go public.

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DAVID GREENE, HOST:

Back in this country now, and a piece of legislation on Capitol Hill that had been seen as a rare symbol of bi-partisanship in this election year. We're talking about a jobs bill that sailed through the House Representatives with backing from President Obama. But not so fast - the Senate has put the breaks on.

And NPR's Sonari Glinton will tell us why.

SONARI GLINTON, BYLINE: When the Jobs Act passed the House by a whopping by 390 votes to 23, it was hailed a shining example of bipartisanship. Well, that was the House of Representatives. The Senate is a whole other story.

SENATOR HARRY REID: Go ahead, my friends. You picked a fight where there's not a necessary fight, but you may be surprised how this one winds up.

GLINTON: That was Senate Majority Leader Harry Reid. Here's Minority Leader Mitch McConnell.

MITCH MCCONNELL: This jobs bill that passed overwhelming in the House with only 23 votes against it that is supported by the president of the United States is ready to go down to him for signature.

GLINTON: So what's the bickering about this week? The Senate is supposed to be the more deliberative body and a chorus of Democrats in the Senate are wanting to do just that.

Senator Mary Landrieu is from Louisiana. She says the Jobs Act is not being thought through.

MARY LANDRIEU: And now we're moving this bill through under the guise of creating jobs. It is a deregulation bill. It is a change in the financial oversight required to take companies public and to raise money on the Internet. It didn't even go through the Banking Committee.

GLINTON: The Jobs Act would make it much easier for companies to raise money on the Internet. It would also make requirements for initial public offerings, or IPOs, easier.

JAY RITTER: The law of unintended consequences has never been repealed.

GLINTON: Jay Ritter is a professor of finance at the University of Florida. He says the reason more small companies aren't going public is the economic climate, not current rules.

RITTER: And until small companies are able to make money, investors are going to continue to be less than enthusiastic about investing in them, and consequently I don't think there are going to be a lot of additional IPOs as a result of this law.

GLINTON: Ritter says he's worried that putting into law solutions to temporary problems could do harm elsewhere in the economy.

Another critic of the Jobs Act is Securities and Exchange Commission Chairman Mary Schapiro. In a six page letter to senators, Schapiro said the some of the language in the bill was so broad, quote, "it would eliminate important protections for investors even in very large companies." A change to the bill that would have addressed Schapiro's concerns failed to get the necessary votes.

Meanwhile, South Dakota Republican John Thune and others in his party oppose the change and say cumbersome regulations are hurting much needed job growth.

SENATOR JOHN THUNE: Tear down some of those barriers. Make it easier and less difficult and hopefully less expensive for small businesses to do that. We think that's good for job creation. And I don't think that these arguments that are being raised against any of these bills are anything more than, you know, political arguments. I don't think they're serious.

GLINTON: And when Texas Republican John Cornyn was asked why not wait to sort out potential problems in the bill...

SENATOR BILL CORNYN: 'Cause 8.3 unemployment, I think it's important for us to show bipartisan support for pro-jobs legislation.

GLINTON: That 8.3 unemployment rate will be on the minds of senators of both parties when they vote on the Jobs Act as early as this afternoon.

Sonari Glinton, NPR News, the Capitol.

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