The U.S. Senate approved legislation to cut taxes and ease credit for small businesses in a long-delayed victory for Democrats eager to show voters they are working to create jobs.
The legislation, passed 61-38, would create a $30 billion lending program and provide small businesses with $12 billion in tax breaks, including more generous write-offs for equipment purchases. Approval sends the bill to the House for a final vote before it goes to President Barack Obama for his signature.
The plan has been held up for months by Republicans who said it amounted to a miniature version of the much-criticized Troubled Asset Relief Program, with insufficient safeguards to ensure that taxpayers recoup the loans. Democrats broke a filibuster two days ago with the help of retiring Republicans George Voinovich of Ohio and George LeMieux of Florida.
“Reinvigorating our economy in the short run and rebuilding it over the long term is not a one-step process,” Obama said today. “But this is a critically important one and I am grateful to those senators on the Republican side of the aisle willing to take this vote on behalf of America's small- business owners.”
Lawmakers turned aside a Republican bid today to attach provisions to extend a tax credit for private research and development programs.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, called the Republican effort a “stunt,” saying lawmakers need more time to work on the proposal. He said senators will take the matter up later this year.
The lending bill is designed to help small business owners who have seen the value of real estate and other types of loan collateral sapped by the
recession, said Michigan Democrat Carl Levin.
‘Plenty of Customers'
“Businesses with plenty of customers, excellent credit histories, have been unable to get the financing they have relied on and need, endangering existing jobs and preventing the creation of new jobs,” Levin said.
The $30 billion lending program would be reserved for banks with less than $10 billion in assets. The bill would also raise limits and cut fees on loans offered through the government's Small Business Administration.
Bill Rys, tax counsel for the National Federation of Independent Business, said in an interview that small businesses have had “some problem” securing loans. Still, he said the group's surveys have found they are more concerned with poor sales, taxes, government regulations and the cost of health insurance.
Lawmakers rejected a proposal earlier this week that would have rescinded a requirement in this year's health-care overhaul that small businesses provide more extensive documentation of their purchases to the
Internal Revenue Service. Senators were unable to agree on how to make up revenue that would have been lost to the Treasury.
