Senate Republicans Block Small Business Aid Bill

Democrats and Republicans have failed to agree on a small business package that could inject $300 billion into the economy. The reason? You guessed it: politics.

Amid intense partisan sniping, legislation to provide aid for small businesses appeared doomed Friday morning, after Senate Republicans blocked the measure from reaching a final vote.

Democrats say the bill is necessary to spur hiring and help the economy emerge from the recession, but Republicans objected to spending increases and said they were prevented from offering amendments. Democrats countered that some of the GOP-sponsored amendments, like a border security provision, have nothing to do with small business aid. And they refuse to allow a GOP amendment designed to make the Bush-era tax cuts permanent.

It's the latest example of Republicans using procedural tactics to stymie President Barack Obama's midterm-election-year agenda. As with the battle over unemployment benefits, Democrats are using the issue to portray Republicans as more concerned with Wall Street than Main Street. Republicans accuse Democrats of profligate spending and claim they are being shut out of the legislative process.

Lawmakers have been debating the measure for nearly a month, with nothing yet to show for it. "Once again a common-sense bill that would help Americans is being held hostage by political calculation," said Sen. Patty Murray (D-Wash.).

Key Part of Obama's Agenda

The small-business aid bill -- a central component of what Obama has called "Recovery Summer" -- would create a $30 billion fund designed to increase lending to small businesses, in addition to providing $12 billion in small-business tax breaks over the next decade. The government says small banks could use the fund as capital to provide $300 billion in small business loans.

On Wednesday, Obama visited a small sandwich shop in Edison, N.J., for a photo-op meant to prod lawmakers into passing the bill.

"Surely, Democrats and Republicans ought to be able to agree on this bill," Obama said. "This is as American as apple pie. Small businesses are the backbone of our economy. They are central to our identity as a nation. They are going to lead this recovery."

But Republicans refused to let the measure reach a final vote, saying that Democrats were playing politics and shutting them out from offering amendments, despite the fact that several GOP-authored provisions are already in the bill. Republicans also objected to $1.5 billion in aid to farmers. Democrats dropped that provision at the last minute, but Republicans were unswayed.

Partisan Sniping Continues

The procedural vote was 58-41, two shy of the 60-vote threshold needed to trigger a final vote. In a sign of how bitter the partisan bickering has become, Sen. Olympia Snowe (R-Maine), who has crossed party lines in the past, called Democrats' handling of the bill "a disgrace."

Senate Republican leader Mitch McConnell of Kentucky mocked Democrats' inability to pass the bill. "It takes a lot of effort to make a partisan issue out of a bill that should have broad bipartisan support," said McConnell. "But our friends on the other side have managed to pull it off. They've outdone themselves."

Democrats disputed that characterization. "They wanted to offer amendments. I've agreed to offer amendments," said Senate Majority Leader Harry Reid, (D-Nev.). "There's nothing snarled, there's only an effort to stop passage of this bill." Facing defeat, Reid switched his vote to no at the last minute, which will allow him to raise the bill again later.

Senate Democrats have one more week to pass the bill -- which they are keen to present to voters this fall -- before they adjourn for the summer recess.