Now, nearly a year after its enactment, major portions of the act are in limbo, and other parts have failed to measure up to the grandiose job-creation promises.
The act underscores how difficult it can be for Washington to spur job creation, even when there’s strong bipartisan consensus on a plan. President Obama hailed it in a Rose Garden ceremony as “exactly the kind of bipartisan action needed” to help the economy. Republicans claimed it as their own. The measure came together months before last year’s election, making it politically difficult to resist a proposal that promised to yield jobs.
“It was a short-lived, political fad,” said Simon Johnson, a professor of entrepreneurship at the Massachusetts Institute of Technology. “There was this combination of wanting to look busy and wanting to create jobs, and skeptics like me never thought it would do anything good.”
The measure is a grab bag of ideas cobbled together for greater impact. It allows private firms to raise money by advertising to the general public for the first time in decades, raise up to $1 million in capital from investors via the Internet, and temporarily skirt some of the federal disclosure and accounting rules as they go public.
The legislation was built on the premise that regulation constrains the growth of small businesses and their potential for explosive job growth — an assertion that has been hotly debated by economists for decades.
But with unemployment high and an election looming, lawmakers hastily introduced the Jobs Act in December 2011, and it got a thumbs-up from the president.
The measure passed the House with an overwhelming majority three months later. Many who were tracking the bill, including its supporters, expected more scrutiny in the Senate. But it whizzed through that chamber, too, in part because Democrats who were skeptical about the measure were reluctant to break ranks with Obama.
“Once the White House endorsed the measure, it was a speeding train coming through the Senate,” said a Senate staff member who is not authorized to speak publicly on the issue and whose boss supported the Jobs Act. “It gained momentum very quickly after that even though some of us felt there was room for improvement.”
Obama signed the bill April 5, four months after its introduction — record speed by Washington standards. The result, critics say, are laws fraught with risks to investors.
A group of investor advocates, shocked by the swift action, went to Capitol Hill to follow up, said Lynn Turner, a former chief accountant at the Securities and Exchange Commission who took part in the meetings. The group asked one senior Senate staff member how lawmakers would track the number of jobs created by the measure.