Sept. 26 (Bloomberg) -- Senate Republicans blocked a $56 billion plan Democrats said would stimulate the economy by expanding unemployment assistance, food stamps, highway and other infrastructure spending and aid to state governments.

Democrats said that as lawmakers consider a $700 billion rescue plan for financial companies, they should also provide aid to ``Main Street'' Americans. The measure, which needed 60 votes to advance, was killed 52-42 on a procedural vote. The U.S. House approved today a similar plan 264-158.

``The economic crisis has spilled over into our communities,'' said Senator Patty Murray, a Washington Democrat. The measure would have created ``jobs at a time when millions of workers have been laid off,'' she said. Said West Virginia Democratic Senator Robert Byrd: ``If we're going to bail out Wall Street, we also need to help Main Street.''

Republicans in both chambers contended the plans were unaffordable and included initiatives that would do little to stimulate the economy. ``In the last few weeks, this Congress hasn't found a cause that doesn't need a handout or a bailout,'' said Representative Jerry Lewis, the top Republican on the House Appropriations Committee. ``Where does it end?''

Veto

The Bush administration threatened to veto either bill, saying both would ``simply increase government spending'' without providing an ``efficient vehicle for job creation.'' The highway projects would take too long to implement to create many jobs in the ``near'' future while unemployment benefits should be ``temporary in nature to encourage a return to work,'' the administration said.

The Senate bill would have extended unemployment benefits by as many as 13 weeks, provided state governments struggling with high Medicaid costs with an additional $20 billion and boosted spending on infrastructure projects by $11 billion.

Republicans objected the Senate plan included provisions reinstating a recently dropped ban on oil-shale development on federal lands. Other provisions in the bill would provide $925 million for the Coast Guard to buy polar icebreakers and $250 million for the National Aeronautics and Space Administration to help develop a replacement for the Space Shuttle.

The Senate bill is S. 3604. The House bill is H.R. 7110.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net.

Last Updated: September 26, 2008 18:47 EDT