Senate Passes $30 Billion Small Business Measure

The Senate adopted the long delayed legislation Thursday designed to open up credit to small businesses and give them other incentives to expand and hire new employees.
Tim Graham | Image Bank | Getty ImagesThe measure, which is designed to open a $ 30 billion credit facility, passing a vote of 61-38.
The Democrats won a 61-38 vote to pass the legislation, joined by two Republicans. The measure would establish a $ 30 billion federal fund to help open up lending to credit-starved small businesses, cut their taxes and increase the Small Business Administration loan programs.
The match gives Barack Obama and his beleaguered Democratic allies in Congress a much sought after, but relatively modest-political victory with less than seven weeks to go before election day.
"At a time when small business owners struggling to make payroll and they are still holding out hiring, we put together a plan that would give them some tax relief and make it easier for them to borrow money," Obama said Wednesday .
The new loan fund will be available for community banks to encourage lending to small businesses. Supporters say banks should be able to use the fund to leverage up to $ 300 billion in loans.
The loan fund is opposed by most Republicans who compare it to the 2008 bailout of the financial system. They warn it would encourage banks to lend to borrowers who are not good credit risks.
Democrats say the measure is needed to help small businesses cope with a credit squeeze, which worsened dramatically after the financial crisis two years ago.
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This legislation will also support lending by lowering the Small Business Administration loan program fees and increasing loan guarantees and loan limits.
"This small company jobs bill would give small businesses $ 12 billion in tax cuts. It will increase loans to small businesses. It would help small business owners to obtain private capital to finance expansion and hiring new employees," says Senate Finance Chairman Max Baucus , D-Mont. "And all these things would help small businesses create as many as half a million jobs."
The measure had been delayed for several months and was successfully filibustered by Republicans in July. But on Tuesday, cracked the Democrats filibuster, with the help of two Republicans,'s George Voinovich of Ohio and George Lemieux in Florida. It sets the stage for Thursday's vote.