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Mr. MORAN. Madam President, yesterday a group of four Senators introduced legislation that I would like to highlight in this brief opportunity on the Senate floor. We introduced S. 3217. This legislation is called Startup 2.0 and was introduced by Senator Warner, Senator Coons, Senator Rubio, and me to begin the process of trying to create a better entrepreneurial environment in the United States, to create opportunities for entrepreneurials for innovation and to grow the economy and create jobs.
I want to personally thank those three Senators--two Republicans, two Democrats--who decided that this common phrase we hear around Washington, DC--we can't do anything this year because it is an election year--is nothing that we are willing to tolerate. We didn't get the marching orders and instructions to say we cannot work and accomplish good work for America because there is a November election.
I want to highlight to my colleagues and ask them to join us in this effort to grow the number of Senators who find this kind of legislation valuable and appealing and to commit myself to work with Senator Warner, Senator Rubio, and Senator Coons to see that we are successful in 2012.
I have talked about this legislation before. In fact, Senator Warner and I introduced the Startup Act months ago. We then joined with Senator Coons and Senator Rubio, who had introduced legislation called the AGREE Act. We took the best components of our two pieces of legislation and yesterday, as I said, introduced S. 3217, the Startup 2.0 Act.
This legislation has about five components. In broad terms, it is based upon the Kauffman Foundation Center for Entrepreneurship based in Kansas City, which is the most world-renowned organization that studies and promotes entrepreneurship. Their proposals were based upon their research and are included in many aspects of this legislation. Part of it is dealing with the regulatory environment that a startup company faces and to require that the benefits of that regulation exceed the costs. That kind of requirement has been in the law before but only for the departments, not for the independent agencies. So we know the independent agencies create lots of hurdles and handicaps in regard to the ability of particularly a young company, a beginning company, a startup company to succeed.
In fact, in my view, our legislation is based upon something I was told once by an engineer who said that for an airplane to fly, there are two forces at work: one is thrust and the other is drag. The thrust has to be sufficient to overcome the drag or you could reduce the drag so the thrust is not so necessary. What I like about this legislation is that it is so focused on reducing the drag--getting things out of the way. It is not a thrust program, meaning more government programs, more government spending, more government. This legislation provides aspects that are designed to get government out of the way and to reduce the drag so that the airplane can launch and can fly and can succeed.
One of those, of course, is the regulatory environment. Another is the tax environment. Startup companies face significant challenges in accessing enough capital to get off the ground. We were successful in passing the JOBS Act signed by the President a few weeks ago. This legislation picks up where that legislation left off.
Incidentally, I read this morning that crowdfunding is already beginning to develop a piece--a development that occurs as a result of the passage of the JOBS Act. So once Washington, DC--let me say that differently. Once Washington, DC, gets out of the way so that the private sector can pursue opportunities, those opportunities are pursued. We see that already happening with the passage of the JOBS Act in regard to crowd source funding in which we are gathering capital investments from people across the country to help new businesses commence.
This legislation, the Startup Act, makes permanent the 100-percent exemption on capital gains taxes for investments held at least 5 years in qualified small businesses so investors can provide financial stability at this critical point in their growth. The legislation also includes a limited, targeted research and development tax credit for startups less than 5 years old. So we alter R&D, we alter income taxes, and we alter capital gains in a way that is designed to create better opportunities for access to credit.
We attempt in this legislation to accelerate the commercialization of research. Billions of dollars are being spent--taxpayer dollars--at universities and colleges across the Nation. We want to incent that research to be devoted toward what can be commercialized, that brings new products, new businesses to market. So we take existing resources and utilize those dollars to reward those universities that take their research dollars and use them in ways that are more likely to be commercialized--in other words, create products, pursue dreams, and ultimately create jobs.
In addition, we create competition--at least knowledge of information, knowledge that allows somebody who is thinking about starting a business to decide which States are the most progrowth-oriented and make decisions about their location--where they should locate--based upon information. That then would also encourage States to be very entrepreneurial and progrowth, pro-innovation in their State policies.
Perhaps the most significant portion of this legislation creates two new visas. The first is an entrepreneur's visa to help foreign-born entrepreneurs currently legally in the United States to register their business and to employ Americans. In many instances, foreign-born entrepreneurs, here legally, have an idea and want to begin a company that will employ Americans but are told their visa does not allow them to remain in the United States.
The second visa that is created in this legislation is related to STEM--and this is a topic of conversation I think is so important--to retain foreign students who are studying in the United States, who have a Ph.D. or a master's degree in science, technology, engineering or mathematics. It is silly, it is wrongheaded for us to educate these individuals and tell them we no longer want them in the United States once they receive their degree. So the Startup Act 2.0 makes two important modifications to that current system of visas.
In addition, we include a provision from the legislation introduced by Senators Rubio and Coons, a provision that eliminates the per-country numerical limit for employment-based immigrant visas, which is another handicap in our system that prevents those who have the greatest skills and talents and intellect from being eligible for a legal visa to remain in the United States.
I heard a story from an entrepreneur in California who was ready to hire foreign-born immigrants who were U.S.-educated individuals with Ph.D.s in computer education--computer science, for example--and yet the H 1B visa program failed them. There were no slots available. So, yes, the company hired these 68 Ph.D.s--technicians, highly skilled and educated individuals--but they hired them in Canada, not in the United States. So not only is that a loss of 68 jobs, but many of those people who are now working in Canada will be the next set of entrepreneurs, and they will start their businesses, their startup companies, and grow their companies in Canada, not in the United States. So we lose in both employment today and in opportunity for American jobs in the future because we have a visa system that handicaps our ability to get the highly educated, trained, and technically skilled individuals in the United States.
Today in the local paper I read some statistics that I think are important for us to remember and to know. Research by the Partnership for a New American Economy and
Partnership for New York City shows a widening gap between the supply and demand of American graduates educated in the so-called STEM fields of science, technology, engineering, and mathematics. The number of job openings requiring such degrees is increasing three times the rate of the rest of the job market. However, college students majoring in non-STEM fields still outnumber math and science-minded counterparts five to one, according to the National Science Foundation. So five people are majoring in something other than science or mathematics for every one who majors in math or science in the United States.
If this trend continues, American businesses will be looking for an estimated 800,000 workers with advanced STEM degrees in 2018--just 6 years away--but will only find 550,000 American graduates with that type of training. Not only do we need to fill that gap with those who are available to us today, but we also need to encourage education in the United States and educate American students in the STEM field as well. Without easing these restrictions, we will continue to have 60 percent of foreign graduate students in the United States enrolled in science and engineering today. So 60 percent of foreign students are majoring in science and mathematics--not true of American students--and we need to reverse that course.
A study earlier this year showed that half of the Nation's top venture-backed companies have at least one immigrant founder. Three out of four claim at least one foreign-born executive.
The point is that we want the economy to grow, we want to create jobs, and we want to do the commonsense things that get government out of the way to allow the private sector to be entrepreneurial, to be innovative, and to create great opportunities for Americans today and, equally important, for Americans tomorrow. We want our kids and grandkids to have the opportunity to live and work in a growing, exciting economy. That requires the Congress to take actions today to create that environment for the private sector to succeed in creating entrepreneurship in the United States.
When we look at the last few years, we see that the net jobs filled in the United States have been filled by entrepreneurs, by new startup companies, not by existing companies. In fact, the trend is that big companies are often laying off workers while startup companies are the ones obviously hiring individuals.
I ask my colleagues to take a look at the legislation that my colleagues, Senators Warner, Rubio, Coons, and I introduced. I look forward to working with the leadership of the Senate to see that it receives appropriate consideration. We ought to do all we can do. We ought not ever use the excuse that we can't do everything; therefore, we can do nothing. These are all commonsense ideas that, in my view, will be supported by at least 80 percent of my colleagues here in the Senate. We ought not use the idea that it is an election year so we can't accomplish anything. The country cannot afford to wait. It needs our action now.
Thank you, Madam President.
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