House sends JOBS Act to Obama
WASHINGTON — The House overwhelmingly approved a measure Tuesday designed to make it easier for growing companies to attract investors and comply with securities laws.
The bipartisan measure, strongly backed by both parties and the White House, passed 380 to 41.
The Jumpstart Our Business Startups Act, or JOBS Act, first passed the House earlier this month with wide bipartisan margins and the Senate approved it last week after adding amendments that provide additional safeguards on “crowdfunding” to prevent credit scams. The House needed to approve the changes before sending it to the White House for President Barack Obama’s signature.
The legislation lifts Securities and Exchange Commission restrictions on running advertisements soliciting new investors and permits crowdfunding so that entrepreneurs can raise equity capital from larger pools of small investors. Small private companies also would be able to sell up to $50 million in shares as part of a public offering before having to register with the SEC, and could have as many as 1,000 shareholders, up from the current cap of 500.
House Majority Leader Eric Cantor, R-Va., said passage of the bill was “an increasingly rare legislative victory in Washington where both sides seized the opportunity to work together, improved the bill and passed it with strong bipartisan support.”
But critics say that the changes would allow firms to avoid disclosing crucial financial information and elude government oversight, opening the door to fraud and investor abuse.
Obama’s support for the bill has put him at odds with frequent allies, including labor unions and consumer and regulatory groups. And though the Senate approved the measure, half of the chamber’s Democrats voted against passage. Congressional aides said some Democratic senators felt boxed in by the Obama’s enthusiasm for the measure.
The White House has worked to reconcile with liberal groups, adopting tougher rhetoric toward Republicans and advancing a series of policy proposals embraced by allies. But when liberals revolted over this recent legislation, the White House responded with what critics complain was only a token acknowledgment of their concerns.
Lawmakers are expected to move next to competing proposals that would provide further tax cuts to growing companies — part of a GOP strategy and Democratic counteroffensive to introduce less ambitious, but politically popular economic-themed legislation.
Cantor and House Republicans plan to vote next month on a measure that would grant 20 percent tax cuts to growing companies; a Senate Democratic proposal introduced this week would provide $26 billion in tax credits to smaller companies that either hire new workers or increase the overall size of their payroll.