Senate deals blow to jobless measure

June 17, 2010 at 12:00a.m.

Staff/wire report

WASHINGTON

Republicans and a dozen Democratic defectors in the Senate dealt a defeat to President Barack Obama on Wednesday, just days after he pressed Congress to renew pieces of last year’s economic-stimulus bill.

A catchall measure combining jobless aid for the long-term unemployed, aid to cash-strapped state governments and the renewal of dozens of popular tax breaks for businesses and individuals failed to muster even a majority in a test vote, much less the 60 votes that would be required to defeat a GOP filibuster.

Now, Obama’s Democratic allies have been forced back to the drawing board in their efforts to pass the measure, which also would protect doctors from a looming cut in Medicare payments and raise taxes on investment-fund managers.

The defeat of the Senate bill Wednesday was unexpectedly lopsided as Democratic moderates joined with every Republican against the pending version on a 45-52 tally.

“They’ve laid the straw that broke the camel’s back, as far as I’m concerned,” said U.S. Sen. George Voinovich, who provided a critical vote to advance an earlier version of the measure in March. “We’re talking $50 billion in new taxes, $80 billion in new borrowing. ... I’ve gotten to the point where I’ve had it.”

The likely cuts mean that people on unemployment insurance could see benefits reduced by $25 a week.

U.S. Sen. Sherrod Brown voiced his support for the bill, in particular provisions that would close loopholes that give tax breaks to foreign companies and extend the primary Small Business Administration loan program, increasing government guarantees from 75 percent to 90 percent.

“We know that small-business lending is critical to our economic recovery,” Brown said. “We need to extend critical tax incentives that help small business expand and hire new workers. Our economy will not fully recover until every Ohioan looking for work can find a job.”

U.S. Rep. Tim Ryan of Niles, D-17th, gave his support to two House bills that would expand lending and offer tax incentives to small businesses. The bills would leverage up to $300 billion in loans for small businesses through a $30 billion lending fund for small and medium-sized community banks.

“As I travel the 17th District and talk with business people, their most- consistent request is to help loosen up credit,” Ryan said. “This legislation is a major step to increase lending to small businesses and allow them to create jobs in our community.”