Democrats in the U.S. Senate advanced a measure to help small businesses on Tuesday,less than two months before they face voters who blame them for an economy still burdened with high unemployment.
The 61 to 37 vote enables Democrats to move toward a final vote on a long-stalled package of lending incentives and tax breaks for small businesses, possibly by the end of the week.The House of Representatives has already passed a similar version of the bill.
The bill, which President Barack Obama and his fellow Democrats say will spur hiring, represents one of the party's final chances before the Nov. 2 elections to show voters they are working to improve the economy.
If the measure clears Congress, it would be a rare victory on the job-creation front for the Democrats, who have seen many of their other efforts blocked by Republicans this year.
The final weeks before the November elections are likely to be consumed by a clash over income tax rates, which will rise for all Americans at the end of the year if Congress does no tact.
Obama and many Democrats want to keep the tax current rates in place for everybody except the wealthiest 3 percent, while Republicans want to keep the current rates in place for everybody.
Republican senators George Voinovich and George LeMieux broke with their party to support the Democrats' small-business bill.
The bill would create a $30 billion fund that the government would invest in independent community banks to encourage lending to small firms.
It would also exclude from taxes all capital gains on sales of small business stock and ease tax rules for expensing and depreciation of equipment. Tax breaks in the bill total $12billion.
Industry groups back the bill.
Anne Mathias, an analyst with the Concept Capital research group, said the bill's lending incentives probably would encourage banks to free up more capital to lend to small businesses, but the tax provisions would not have a"revolutionary" impact.
Democrats estimate the measure could create 500,000 new jobs. Some 8 million jobs have been lost since the worst recession in 70 years began in late 2007.
Republicans have called the proposal a junior version of the government's controversial bailout of Wall Street.
With the unemployment rate stuck at 9.6 percent,Republicans are poised to rack up big gains in the November elections, possibly winning control of the House and the Senate, due in part to public perceptions that Democrats have not done enough to create jobs.
The sputtering U.S. economy is far and away the top concern of voters in Nevada, a Reuters/Ipsos poll said on Tuesday. Senate Democratic leader Harry Reid, who is fighting for his political life in the November elections, on Tuesday called small businesses "the engine that drive the economy," as he pushed for the bill.
Smaller firms have complained that they have had trouble getting loans to expand following the 2007-2009 financial crisis, when many banks pulled back their lending activity.
"This is not about the November election. This is about righting a wrong that was done to small business when Wall Street took Main Street down and cut off access to capital,"Democratic Senator Maria Cantwell said at a news conference.
The U.S. government's definition of what constitutes a"small business" varies by sector, but typically encompasses firms that employ fewer than 500 workers or take in less than $7 million in annual revenues. Those limits can be substantially higher for firms in certain business sectors,such as transportation.
Republicans sought to modify the bill to ease tax-reporting requirements included in the landmark healthcare-reform bill passed earlier this year but Democrats defeated that proposal.
"You can't grow your small business if you spend all your time filling out forms and haggling with auditors," said Republican Senator Mike Johanns.