Capital Formation Legislation - What will the Senate Do?

In rare burst of bipartisanship last week, the House of Representatives passed a capital formation bill – H.R. 3606, the “Jumpstart Our Business Startups Act” (JOBS Act) – by a vote of 390 to 23. Even the White House issued a Statement of Administration Policy in support of the bill, which would ease regulatory burdens on business start-ups. With the Senate expected to complete votes on the highway bill today, Senate Republicans are pressuring the majority to move next to the JOBS Act.

In a letter to Senate Banking Committee Chairman Johnson (D-SD), who is reported to be working with Majority Leader Harry Reid (D-NV) on developing a new, Senate version of the JOBS Act, Banking Committee Ranking Member Shelby (R-AL) raised objections with their drafting a new bill “without any input from Senate Republicans.” Shelby wrote that he “nevertheless” stands “ready to work with you to craft bipartisan legislation” and recommended that Johnson consider capital formation legislation introduced by Senators Scott Brown (S. 1791); Hutchison (S. 556); Thune (S. 1831); and Toomey (S. 1544, S. 1824, and S. 1933). All but two of the six bills Shelby listed have bipartisan sponsors.

Meanwhile, on the Senate floor this morning, Minority Leader Mitch McConnell (R-KY) emphatically urged the Majority Leader to “immediately take up the bipartisan jobs bill the House sent over last Thursday” once the Senate finishes the highway bill. McConnell went on to say, “The House-passed Jobs bill isn’t just important for what it does, but for what it represents. It’s a rare and welcome signal that lawmakers in Washington still value the risk-takers and the entrepreneurs who’ve always been so vital to our nation’s greatness...This is precisely the kind of thing we should be doing in Washington.”

At the end of his statement, McConnell asked for consent that the Senate take up the House JOBS bill and his Democratic colleagues objected. McConnell is expected to continue attempting to bring up the JOBS bill without much success, because Reid reportedly wants to scale back aspects of the House bill as well as add additional issues such as the reauthorization of the Export-Import Bank and an increase in the debt the Small Business Administration can guarantee for small business investment companies to $4 billion. Reid has said the Senate will next move to judicial nominations and has not offered a timeframe for the capital formation legislation.

Letter from Senator Shelby to Senate Banking Committee Chairman Johnson (PDF)

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