WASHINGTON, D.C. – U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) today introduced bipartisan legislation aimed at jumpstarting the economy through the creation and growth of new businesses. The Startup Act outlines a five-prong approach to job creation based on the proven track record of entrepreneurs.

"The private sector has been the engine of job creation in our country throughout history, and to get America’s economic engine roaring once again, entrepreneurs must be free to pursue their ideas, form companies, and hire employees," Sen. Moran said. "Congress must put into place policies that remove barriers and help entrepreneurs succeed, so new businesses can grow and put Americans back to work."

“Encouraging early-stage investment and growth in these fast-growing, entrepreneurial start-up businesses is one of the best ways to create new jobs,” Sen. Warner said. “This legislation includes new tools that will renew the focus on tech startups and help unleash the next wave of American entrepreneurs."

The legislation focuses on five pro-growth principles: 1) reducing regulatory burdens; 2) attracting business investment; 3) accelerating the commercialization of university research; 4) attracting and retaining entrepreneurial talent; and 5) encouraging pro-growth state and local policies.

According to analysis conducted by the Ewing Marion Kauffman Foundation, companies less than 5 years old accounted for nearly all net job creation in the United States between 1980 and 2005. In fact, new firms create on average approximately 3 million jobs each year. The principles included in the Startup Act are based on the extensive research and analysis conducted by the Kauffman Foundation, and many of the Startup Act’s provisions build on the recommendations of President Obama’s Council on Jobs and Competitiveness.

“Senators Warner and Moran recognize the important role entrepreneurs play in job creation and I commend them for working across party lines to improve the environment for entrepreneurs to start and grow their firms,” said Steve Case, CEO of Revolution LLC and a member of the President’s Council on Jobs and Competitiveness. “By increasing access to capital, lowering the tax and regulatory burden on young businesses, and attracting the world’s best and brightest entrepreneurs to the United States, the Startup Act will play an important role in helping to create the next generation of iconic American companies."

“Kauffman research makes clear that there is a need for a major legislative jumpstart of our nation’s entrepreneurial engine,” said Carl Schramm, Kauffman Foundation president and CEO. “With virtually all net job creation coming from companies less than five years old, entrepreneurs are a critical force for U.S. economic growth."

If enacted, the Startup Act would do the following:

• Require a cost-benefit analysis of proposed regulations with an economic impact of $100 million or more to determine the efficacy of the rule and its potential effects on the formation and growth of new businesses;
• Make permanent the capital gains tax exemption for investments held for five years in Qualified Small Businesses (QSB), giving investors an incentive to partner with entrepreneurs and helping provide financial stability for the first few years of a new business’ life;
• Provide a corporate tax credit of up to $5 million for QSBs in the first taxable year of profit, followed by a 50 percent corporate income tax exclusion in the two succeeding taxable years, to help startups finance growth;
• Open the door for reforms to the Sarbanes-Oxley Act of 2002;
• Use existing federal research and development funding to support innovative projects at American universities in order to accelerate and improve the commercialization of cutting-edge technologies developed through faculty research;
• Create a STEM Visa for up to 50,000 immigrants per year who graduate with a Masters of Ph.D. in science, technology, engineering or mathematics, giving them the opportunity to stay in the United States and put their skills to work;
• Create an Entrepreneur’s Visa for up to 75,000 immigrant entrepreneurs who register a business and employ at least two non-family member employees, and invest in their business within one year of obtaining the visa. Current H-1B Visa holders or those who have completed graduate level work in a STEM field would qualify; and
• Encourage successful pro-growth state and local policies by studying state laws that affect new business formation and economic growth.

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WASHINGTON, DC – U.S. Senator Jerry Moran (R-Kan.) today invited Boeing's CEO to Wichita to work with state and local officials and employees on fulfilling Boeing’s commitment to Kansans.

Earlier this year, Boeing was awarded the contract in the U.S. Air Force tanker competition. During the competition for the contract, Boeing pledged that a win would bring approximately 7,500 jobs to Kansas, including hundreds of Boeing jobs associated with the finishing work on the new tankers. Boeing recently announced the company is studying the future of its Wichita facility, and among the options being reviewed is the potential closure of the Wichita site.

“I join many Kansans who are surprised and disappointed by the revelation that Boeing is studying the potential closure of its Wichita defense facility,” Sen. Moran said in an open letter to Boeing CEO James McNerney. “While I understand the pressures facing U.S. businesses during the past several years, I am deeply troubled by the notion that a promise made is not a promise kept. As Boeing reviews the Wichita facility, I ask that Boeing CEO McNerney come to Wichita to work with state and local officials and employees on fulfilling Boeing’s commitment to Kansans. A company so much a part of the Wichita community for 80 years should live up to their pledge to the community.”

The full text of the open letter to Mr. McNerney is included below or can be accessed here. 

December 7, 2011

Dear Mr. McNerney:

I join many Kansans who are surprised and disappointed by the revelation that Boeing is studying the potential closure of its Wichita defense facility. 

For most of the past century, the Boeing name has been synonymous with our world’s Air Capital, Wichita.  This mutually beneficial partnership between Boeing and Kansas was evident during the last decade as the tanker battle was waged in the halls of Congress and the Pentagon.  Standing by Boeing as one of their greatest allies in this fight were the people of Kansas.  A win for Boeing, we were told by Boeing throughout the process, would bring thousands of jobs to the state, including hundreds of Boeing jobs associated with the finishing work on the new tankers.

To quote a Boeing press release from last year, “Kansas will benefit from approximately 7,500 jobs and an estimated $388 million in annual economic impact if the Boeing NewGen Tanker is selected as the U.S. Air Force's next aerial refueling aircraft.  Boeing employees working at the Wichita, Kan., site will play an important role in modifying commercial 767 airplanes into NewGen military tankers if the company is selected for the contract.  This is highly skilled work that Boeing workers in Kansas know well, having performed similar modifications in recent years on eight 767 tankers for Japan and Italy.”

When the Air Force reached a decision this year to award the tanker contract to Boeing, Kansans who worked so hard during the competition celebrated the news – from workers, to suppliers, to officials past and present at the city, county, state, and federal levels, including the current Congressional delegation, as well as Governor Sam Brownback and former Congressman Todd Tiahrt.

Today, that joy has turned to dismay as Kansans question whether Boeing will honor their commitment to jobs.  While I understand the pressures facing U.S. businesses during the past several years, I am deeply troubled by the notion that a promise made is not a promise kept.  A company so much a part of the Wichita community for 80 years should live up to their pledge to the community.  As Boeing reviews the Wichita facility, I ask that you come to Wichita to work with state and local officials and employees on fulfilling Boeing’s commitment to Kansans.

I hope you will agree that the relationship between Boeing and Wichita’s talented workforce, unbeatable suppliers, and supportive community is worth preserving. 

Very Truly Yours,

Jerry Moran

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Just a few moments ago, we cast several votes in regard to the so-called payroll tax holiday. I opposed both the Republican and the Democrat amendments. There are significant differences between these two versions, mainly in the way the provisions are paid for. And while I supported the pay-fors in the Republican plan, I objected to what the pay-fors were paying for.

I support freezing Members of Congress’ pay, eliminating certain benefits for millionaires, and reducing the federal workforce. But wouldn’t it be better to use these savings to reduce the debt and deficit rather than make a short-term change that reduces the revenues going to the Social Security Trust Fund? When are we going to admit that we are broke?

I’m reminded of a plan approved by Congress several years ago where we borrowed money to give citizens a $600 rebate, all in the name of a stimulus. We wanted to stimulate the economy, and in my view we stimulated little and increased the debt a lot.

Many of us have expressed support for the concepts contained in the Bowles-Simpson deficit reduction plan. Their recommendations are very important, and we’ve paid a lot of attention to them and expressed our desire to proceed in that way many times. But the legislation that we just voted on uses many of their suggested reductions in spending, not for deficit reduction but for another stimulus plan. The Bowles-Simpson plan has been hijacked once again in the name of stimulating the economy.

These proposals also undermine the foundation of Social Security by reducing the payments into the Trust Fund. We should leave the Trust Fund alone and cut spending and use those savings to pay down our annual deficits and live within our means. Once again we are putting off difficult decisions and leaving it up to our children and grandchildren to pay for our irresponsibility.

Finally, let me once again make the case for certainty in our tax code. Congress is tinkering tonight with the tax code, creating greater uncertainty. In almost every conversation I have with a business owner they ask for certainty in the tax code and certainty in the regulatory environment. But instead tonight we are attempting to change the tax code once more for a short period of time, claiming some benefit for doing so. Instead, we should focus on long-term tax policy and develop a tax code that is simpler and certain. Certainty is something that will create jobs.

I expect there to be some criticism of the votes I just cast, and I can hear the campaign sound bites, but we have got to get beyond the next election and get to the next generation.