GOP puts block on fund for little guy

Associated Press

WASHINGTON

President Barack Obama’s election-year jobs agenda suffered a new setback Thursday when Senate Republicans blocked a bill creating a $30 billion government fund to help open up lending for credit-starved small businesses.

The fund would be available to community banks with less than $10 billion in assets to help them increase lending to small businesses. The bill would combine the fund with about $12 billion in tax breaks aimed at small businesses.

Democrats say banks should be able to use the lending fund to leverage up to $300 billion in loans, helping to loosen tight credit markets. Some Republicans, however, likened it to the unpopular bailout of the financial industry.

Democrats had wanted to pass the bill before Congress leaves town for summer vacation, but that won’t happen with the House scheduled to adjourn Friday. The Senate is in session for another week, but Senate Majority Leader Harry Reid said there would be no more votes until Monday.

Congressional Democrats started the year with ambitious plans to pass a series of bills designed to create jobs, but they have little to show for it just a few months before midterm elections that will determine whether Democrats keep their majorities in the House and Senate.

The vote was 58 to 42, with all 41 Republicans voting to continue the filibuster.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.