The small business lending bill supported by President Barack Obama finally passed the U.S. Senate on Thursday, by a vote of 61-38, according to Bloomberg.
The legislation, which has been roundly criticized and filibustered by Republicans, would create a lending program for small businesses and give the companies tax breaks and opportunities for additional write-offs. The bill will now advance to the House of Representatives, where members of congress will perform a final vote before it moves on to Obama’s desk for approval.
Helping Small Businesses
There is little doubt this measure, if passed, would help small businesses. Small companies, even those with solid financial footing, have struggled to acquire credit from many banks as financial institutions have become more leery of handing out loans in the wake of the financial crisis and recession. The lending program, which would cost $30 billion, would give banks with less than $10 billion additional ability to extend loans to businesses. The bill would also include up to $12 billion in tax cuts for businesses that purchase new equipment or remodel their stores.
The idea behind the plan is that if businesses had better access to loans and extra funds, they would be more apt to hire, thus dropping the unemployment rate and improving the U.S. economy. With an unemployment rate of about 10% that is showing no sign of improvement, the nation is sorely in need of a stimulus that would create jobs. The small business lending bill would be part of a massive stimulus plan that includes road and railway improvements across the nation.
Obama spoke about his bill earlier this week:
Republicans Resist Bill
The nation’s Republican senators successfully blocked the small business lending bill in July, but could not attain a filibuster this time around. Two Republican senators broke the filibuster earlier this week, setting up the Democrats for legislative success on Thursday. Many Republicans contend the bill is a smaller version of the TARP bailouts that saved the nation’s big banks from failure during the financial crisis, because the small business lending bill would use government money to help businesses stay afloat.