Policymakers have a unique opportunity to strike a bipartisan deal in the mold of the 2012 JOBS Act that fosters a stronger, more resilient, and inclusive economic environment centered around broad-based capital formation for more small businesses. At a time when there are roughly half the number of American public companies that existed 20 years ago and when small businesses looking to grow quickly are increasingly dependent on venture capital funding located near coastal hubs, federal legislation could help level the playing field and better disperse funding (and jobs) across the country.
As the economy stagnated following the 2008 crash, a bipartisan coalition within Congress saw an opportunity. Congress could help stimulate the creation of jobs by simplifying rules for capital formation (how businesses get access to, and accumulate, funding) and encouraging the growth of small companies. The resulting legislation, the 2012 JOBS Act, serves today as a model for bipartisanship in which members of Congress from both sides of the aisle took near-unanimous action to create advantages for struggling American entrepreneurs. Nearly a decade later, Congress and the Biden administration now have a chance to tap into the JOBS Act’s legacy by acting together in a bipartisan manner to boost American entrepreneurship.
The coronavirus pandemic will continue to shape our world — and our economy — for years to come. We can see this manifesting in lost growth and higher unemployment. This month, we learned that the U.S. real unemployment rate has reached 10%, underscoring that we need job creators now more than ever. Fortunately, we also learned this month that the U.S. Census Bureau projects an almost 43% increase in business formation over the coming four quarters. While that statistic holds promise, the fate of many of those new businesses and the jobs they create will rely heavily on their ability to operate efficiently and raise needed capital. So, it is incumbent upon Congress and the Biden administration to create a regulatory environment that sets up these new businesses for success. Amid so much uncertainty, American entrepreneurs can’t be left wondering if Washington remembers them.
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