WASHINGTON — Senate Republicans yesterday blocked a bill to increase lending to small businesses, dealing a setback to President Obama’s jobs agenda.
The bill would create a $30 billion government fund to help community banks increase such lending, combining it with about $12 billion in tax breaks for small businesses.
Democrats say banks should be able to use the fund to leverage up to $300 billion in loans to small businesses, helping to loosen tight credit markets. The fund would be available only to banks with less than $10 billion in assets. Some Republicans likened it to the unpopular bailout of the financial industry.
Senate leaders said they will continue to negotiate. But yesterday’s vote will make it difficult for Congress to pass a bill before lawmakers go on vacation.
Democrats started the year with ambitious plans to pass jobs bills. But if the lending bill fails, they will have little to show before midterm elections, which will determine if Democrats keep their congressional majority.
Obama lobbied for the small-business lending bill during a trip Wednesday to Edison, N.J. But Senate Democrats fell short yesterday of the 60 votes needed to end a Republican filibuster.
Much of the bill had bipartisan support, but GOP leader Mitch McConnell of Kentucky said Democrats were blocking GOP amendments. Senate majority leader Harry Reid said Republican demands kept changing.
GOP amendments included plans for tighter border security and a lower estate tax.