July 29 (Bloomberg) -- Senate Republicans blocked a measure that would cut taxes and ease credit for small businesses, saying they objected that Democrats refused to consider their amendments to extend tax breaks and cap federal spending.
The Senate voted 58-42 today to end debate on the bill, falling short of the 60 votes required to consider the legislation for passage.
“Once again a common-sense bill that would help Americans is being held hostage by political calculation,” Senator Patty Murray, a Washington Democrat, said in debate before the vote.
Senate Majority Leader Harry Reid, a Nevada Democrat, said he would work with Republicans over the next few days to seek a compromise on which amendments would be offered. Reid said he hopes the legislation can be passed before the Senate breaks for its August recess.
The measure is aimed at easing terms for loans guaranteed by the Small Business Administration, providing $12 billion in tax breaks and issuing grants to states to provide business loans.
It would have provided $30 billion to banks with less than $10 billion in assets to encourage lending to small businesses. The cost of paying back those capital infusions would decline based on the level of small-business lending by the bank. The aid could spur $300 billion in lending.
Republicans said the legislation was debated in the Senate for three weeks, while they didn’t have the chance to offer the amendments they desired.
“This is the foremost issue in America, and we’re saying we don’t have time to address this issue?” Senator Olympia Snowe, a Maine Republican, said before the vote. “Why don’t we spend more time talking with each other to get the policy right?”
Auto suppliers, community banks and franchise owners banded together to push for the provision to boost lending, saying it is crucial to letting them expand and hire new employees.
“Businesses that have enjoyed years of profits and expansion have had loan requests rejected and credit limits restricted,” Chris Kersting, president of the Specialty Equipment Market Association, wrote to Congress. “The reduction in access to capital is prolonging a stagnant economy.”
The legislation was faulted by Republicans such as Senator Richard Shelby of Alabama for being a government rescue similar to the $700 billion bank bailout of 2008. The program might induce banks to make risky loans, lawmakers said.
“The lack of credit for small businesses is a problem that needs to be addressed,” Shelby said during Senate debate last week. “I do not, however, believe that we should try and solve this problem with another expensive and bureaucratic government program.”
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