WASHINGTON — Senate Republicans have blocked a bill to increase small-business lending, dealing a setback to President Obama. The House passed a version June 18.
The legislation was designed to provide $30 billion to small banks to boost lending to small businesses. The bill also included other provisions intended to aid small businesses, such as $11.7 billion in tax breaks for investing in new equipment or the sale of small-business stock.
The Small Business Administration (SBA) provisions would have increased the limits on government-guaranteed loans to $5 million from $2 million, and extend the reduced fees and higher guarantees passed last year in the stimulus bill. The law would also have allowed self-employed workers to fully write off their health insurance costs in 2010.
Republicans opposed the measure on the grounds that it was comparable to the Troubled Asset Relief Program (TARP) and “injects capital into banks with no guarantees they will actually lend,” according to a policy statement.
Senate Small Business Committee Chair Mary Landrieu (D-La.) countered that argument, and said that the bill would provide strong protections for taxpayer money. Landrieu also expected the bill to raise $1.1 billion in dividend income over 10 years.
A small-business bill may still surface. Democrats and Republicans will continue to negotiate amendments to the bill. However, last Thursday’s vote will make it difficult for Congress to pass any bill before lawmakers go on their summer vacation.