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Public Statements

Access to Capital for Jobs Creators Act

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. McCARTHY of California. Mr. Speaker, I yield myself such time as I may consume.

I first want to start by thanking the gentlelady from California for her work on this legislation and her amendment making the bill better.

Mr. Speaker, as many know on this floor, I started, before I was in Congress, as a small business owner. At the age of 20, I took some savings I had, some luck within a lottery, and some investments in the market and I took a risk. I went out and opened a deli. I didn't put a lot of thought into the name, so I named it after myself.

But as I took that risk, as many people across this country do, you find the challenges of a small business. Fortunately, I was successful, able to hire people, able to work through; and at the end of 2 years, I now had enough money to pay my way through college.

But when I think back to those days of the risk I took, I wonder if in today's environments could I do the same. Unfortunately, the answer is, no, I could not. I cringe at the thought today of the regulations and the challenges a small business faced.

When I look at what small businesses do to this economy, they represent 99.7 percent of all employers. When you analyze the growth of America, if you just want to take from the beginning of the last recession, 2001, the end of it to the beginning of this one in 2007, and you look at that time in America when we had job growth, when you think about who created that growth, well, small businesses added 7 million jobs. Large corporations cut 1 million jobs during that same time.

Today, when we look at the market, we're at our all-time low in the last 16 years for new small businesses entering. And all statistics tells us we will not grow unless small businesses grow.

Unfortunately, the entrance to market has become too great. The regulations have been too tough, and the access to capital has been too hard to get.

So just with that story I tell you of starting my own small business when it became successful, before I sold it I actually looked to expand. I had dreams of putting five new delis throughout my town. I even started negotiating on a new lease.

But to raise that extra capital, when, one, a bank had turned me down, because of the regulations by the Federal Government, I could only talk to those people I already had a relationship with. Well, I came from a side of town that didn't have great wealth. I didn't know people with money.

So for me to be able to talk to them, I'd have to hire an attorney, file with the SEC all things that I did not have the time to do as a small business, even to talk to somebody about the idea. So I ended up selling.

Well, that law was based in 1933. This country has moved forward, and this Congress should move forward as well. That's why today that's exactly what this bill will do. It will allow the small business to unshackle the capital which it needs. It will allow the individual to talk to those who are accredited, and it has the protections to do that. But the idea could actually gain the capital. And you have to think, when you're in a small business, sometimes this capital is better than going to a bank. It's what you negotiate.

The cash flow is very important in a small business. A bank makes you pay monthly. The investment of an individual allows you to have growth. It also allows Americans to invest in America. It is a win-win all the way around. It is involving in a place that allows small business to grow.

I will tell you that the strength from the amendment from Maxine Waters, and the adoption in the committee, requires insurers to verify that purchasers are in fact SEC accredited. And I thank you for that amendment.

This was approved in the Financial Services Committee by a bipartisan vote. This is another example of an issue where we can find common ground, work on both sides of the aisle, work with this President, but more importantly, let America start working again.

Mr. Speaker, I urge all of my colleagues to support this commonsense legislation, and I reserve the balance of my time.

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Mr. McCARTHY of California. Mr. Speaker, I yield myself such time as I may consume.

The gentleman from North Carolina's amendment goes against the very purpose of this bill. This amendment would force private companies raising capital to actually face stiffer regulations than public companies regarding compensation. The Securities and Exchange Commission doesn't require public companies selling to retail investors to put this in their advertising, and even Dodd-Frank did not go this far.

With Ms. Waters' help, we made sure that this bill specifically targets only sophisticated Securities and Exchange accredited investors. The SEC has no authority to regulate the compensation of executives at private companies. At a time when the costs and benefits of regulations are so important, the Miller amendment would fail anyone's cost benefit analysis. I, therefore, urge my colleagues to reject this amendment.

I yield 1 minute to the gentlelady from New York, Nan Hayworth.

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