Rep Cmte Financial Services
Chairman Hensarling Speaks in Support of Bipartisan Jobs Bill
Washington, Dec 4 -
House Financial Services Committee Chairman Jeb Hensarling (R-TX) today delivered the following remarks on the House floor in support of H.R. 1105, the Small Business Capital Access & Job Preservation Act:
Mr. Speaker, since Congress was not in session last week perhaps some of my colleagues missed the front page headline in the Washington Post: “Among American workers, poll finds unprecedented anxiety about jobs and economy.”
According to the report: “American workers are living with unprecedented economic anxiety.” More than six in 10 worry they will lose their jobs. Nearly one in three say they worry “a lot” about losing their jobs.
The article goes on to mention an American named John Stewart, who wakes up every morning at 1:30 a.m. for a two-hour commute to catch two different buses in Philadelphia so he can get to work on time. In the newspaper he said “I can’t save money to buy the things I need to live as a human being.”
But Mr. Speaker we don’t have to read the Washington Post, all we have to do is listen to our own constituents. Since even today millions, millions of our fellow countrymen unemployed and underemployed.
I hear these stories every week myself. Recently I heard from Ida in Wills Point, Texas in the Fifth Congressional District that I represent. She and her 79 year old husband own a small trucking company. But, she wrote me that “because of increasing regulations and taxes in the past four years we’ve lost all but two of our trucks.” She goes on to write me “My husband is the only driver right now because I can no longer drive. He drives full-time, 3,500 miles per week most weeks. Because we can’t live on his Social Security,” she says, “we are really stuck in a hole.”Millions, Mr. Speaker are stuck in a hole.
Today we have an opportunity Mr. Speaker to do something to help raise many of our fellow countrymen out of that hole of economic anxiety and economic hardship. Today we have the opportunity to pass HR 1105, the Small Business Capital Access and Jobs Preservation Act. I want to commend the bipartisan group of members – two Republicans and two Democrats – who introduced this bill: Mr. Hurt of Virginia, Mr. Himes of Connecticut, Mr. Garrett of New Jersey and Mr. Cooper of Tennessee. As Chairman of the Financial Services Committee Mr. Speaker, I thank the members of the committee who also came together across party lines to approve this bill. Mr. Speaker, nearly one-third of the Democrats who sit on our committee joined with 30 Republicans in supporting H.R. 1105. In short Mr. Speaker, this is indeed a bipartisan jobs bill.
We know that small business face an incredible red tape burden. In fact, a recent survey by the National Federation of Independent Businesses said “government regulations and red tape” are the single most important challenge that small businesses face in creating and preserving jobs.
Mr. Speaker, I heard from another small business person in Grand Saline, Texas in my district. He said because of over-regulation “Our business has devolved from one that provides a service for a customer into one that provides that same service as an afterthought while our real efforts go into paperwork.”
Now Mr. Speaker, we can debate the relative merits or demerits of of the Dodd-Frank Act, but even the primary author himself, former Chairman Frank admitted that perhaps that not every aspect of Dodd-Frank achieved perfection. And many of us would argue on a bipartisan basis that part of the act that requires small business investors who are private equity advisors to register with the SEC is perhaps one of those previsions that is in need of reform. This is a provision Mr. Speaker that many of us believe was aimed at Wall Street but it ends up hurting Main Street.
Because of this provision, embedded in Dodd-Frank smaller firms that invest in entrepreneurs and in small businesses face yet one more significant regulatory cost, regulatory burden; more red tape.
As one of these small business investors testified before our committee, it will cost his company $200,000 every year to comply with the regulation. Mr. Speaker he went onto say “While for some larger firms this is an insignificant cost, for a medium sized firm such as ours that offers capital to small businesses, it is a significant expense.” And pay attention to this Mr. Speaker– he said “this money comes directly out of our funds intended for investment into Main Street.”
In today’s economy, to help pull these people out of this hole of economic anxiety we need more private sector, more private equity investment into Main Street. Private equity equal small business jobs. In fact Mr. Speaker, between 1995 and 2010, 23,000 different companies across our nation benefited from private equity investment, employing 3 million different people. And the investments that are made by private equity historically have grown jobs at three times the rate of other companies.
And so what does this look like? I’ve got to tell you Mr. Speaker it looks like an outfit called New Mountain Capital that invested in a company named Inmar, a national coupon and reverse logistics processing company. By helping them update their IT with a $100 million investment, they now sport 4,200 different employees. The face of private equity looks like Capital South Partners that invested in a North Carolina firm, Avida Non-Wovens, and now they have 95 employees in High Point, North Carolina. And I should add parenthetically another 55 employees in my native Texas. This is the face of private equity. These are some of the small business jobs that are getting created.
Now we may hear from some that this is needed to somehow battle Wall Street, but let me tell you what private equity is not. Private equity is not Wall Street. It is not complex derivative trading. It’s not currency swaps, Mr. Speaker. It is not about systemic risk; that is not what this is about.
And so again this was a provision aimed at Wall Street that unfortunately is hitting Main Street. It is time to make sure that Americans like John in Philadelphia can live like a human being. It’s time to make sure that constituents like mine, Ida and her husband, don’t have to drive 3,500 miles a week just so that they can put food on the table.
Mr. Speaker, it’s time again for this institution to put jobs first- not regulators first, but jobs first. I urge all of my colleagues to adopt HR 1105.