A $30 billion small business lending bill cleared Congress on Thursday, giving President Barack Obama's embattled Democrats a hard-won victory just weeks before the November elections.
The House of Representative gave the bill final congressional approval on a mostly party-line vote of 237 to 187. It now goes to Obama who will sign it on Monday.
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The bill sets up a lending fund for small businesses and is a significant legislative win for Obama and his fellow Democrats who are trying to show unhappy voters they are serious about boosting the sluggish economy to create jobs.
Republicans are poised to make big gains in both the House and the Senate in the November 2 congressional elections as voters fret about the slow economic recovery and a stubbornly high 9.6 percent unemployment rate. Polls show voters believe Obama has not done enough to help the United States recover from the worst recession since the 1930s Great Depression.
"The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners without adding a dime to our nation's deficit," Obama said in a statement.
Democrats say the bill is needed because small businesses have had a hard time obtaining loans since the financial crisis that began in December 2007. They estimate the incentives could provide up to $300 billion in new small business credit over the coming years and create 500,000 new jobs.
"This bill is critical to allowing small businesses to grow," said House Democratic Leader Steny Hoyer.
Republicans characterized the bill as a junior version of the unpopular Wall Street bank rescue effort and blocked it in the Senate for weeks. The Senate was able to pass it last week after two retiring Republicans broke ranks and voted to end a filibuster on the bill, which includes an additional $12 billion in tax breaks for small businesses.
Republicans blame government policies for creating uncertainty in the business community.
"I admit the credit problems are real," said Republican Representative Charles Boustany. "Small businesses are struggling with it, but why is that? It's because there is uncertainty in the economic climate."
He said some of the revenue raising provisions in the bill, including one that would expand tax reporting requirements for landlords, contribute to the uncertainty.
The bill, backed by industry groups, 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 accelerate tax write-offs for purchases of equipment and other property.