House GOP ramps up pressure on Senate to act on capital bill

By Peter Schroeder - 03/19/12 11:48 AM ET

House Republican leaders are ramping up pressure on the Senate to move on a capital formation bill, accusing Democrats of throwing obstacles in front of the measure to push a campaign narrative.

House Majority Leader Eric Cantor (R-Va.) said Democrats were identifying "phantom" problems about inadequate investor protections to derail the Jumpstart Our Business Startups (JOBS) Act.

"Senate Democrats need to stop playing politics and act quickly to make sure this bipartisan job creation measure becomes law," he said in a statement Monday.

And House Financial Services Committee Chairman Spencer Bachus (R-Ala.) said Democrats are using those concerns to slow the broadly popular House bill in order to depict a "do-nothing Congress."

"The concerns about investor protection that are suddenly now being raised are nothing but a fig leaf that Senate Democrats are hiding behind to continue their campaign theme," Bachus said.

The legislation contains a variety of provisions aimed at making it easier for small, growing companies to line up capital without having to meet certain regulatory requirements for public companies, or other restrictions.

The bill easily passed in the House by a vote of 390-23, and is supported by the White House. The Senate is set to take up the measure this week, as part of a deal struck between party leaders that included stalled judicial nominees. However, some Senate Democrats are airing concerns about whether the measure poses risks to investors, by potentially exposing them to risky or fraudulent investment opportunities.

Democrats are quick to cite a letter sent to the Senate Banking Committee by a top regulator running down a series of concerns with the bill as it stands. Securities and Exchange Commission Chairwoman Mary Schapiro told senators that while the measure includes some "promising approaches," it needs to be strengthened in several areas to protect investors. In particular, she said the bill would roll back key rules put in place following the dot-com boom and the Enron accounting scandals intended to protect investors.

“You have to have confidence from investors that they have adequate access to information,” said Sen. Jack Reed (D-R.I.) Thursday. “Without that, the markets are less markets than casinos. And we need markets.”

But Bachus maintained that the various pieces that make up the bill were vetted by his committee, and found by members of both parties to sufficiently protect investors. Therefore, opposition to the measure must be purely political, he argued.

"Since passage of a bipartisan jobs bill supported by virtually every Democrat and Republican in the House — and even President Obama — goes against their campaign plan, Senate Democrats are now working to kill the JOBS Act," he said. "They’re acting like Lucy snatching the football away at the last possible moment, and it is entrepreneurs and job creators who are made to play Charlie Brown."

—This post updated at 1:10 p.m.