Small business credit bill clears Senate hurdle

WASHINGTON - In a win for President Barack Obama and his political allies, Senate Democrats Tuesday won a crucial vote to clear the way for a bill to create a $30-billion government fund to help open up lending for credit-starved small businesses.

Democrats cracked a GOP filibuster of the bill with the help of two Republicans: Sens. George Voinovich of Ohio and George LeMieux of Florida.

The 61-37 tally sets the stage for a final vote later this week to return the measure to the House, which is likely to approve it for Obama's signature.

The bill is probably the last piece of Democrats' ambitious jobs agenda that would become law before midterm elections, which will determine whether Democrats keep their majorities in the House and Senate. Democrats started the year with ambitious plans for a series of bills designed to boost the economy and job creation but have relatively little to show for it. The nationwide unemployment rate ticked up to 9.6 percent last month.

Obama welcomed the vote.

"This is a bill that would cut taxes and help provide loans to millions of small-business owners who create most of the new jobs in this country," he said in a statement. "Small businesses across the country have been waiting for Washington to act on this bill for far too long."

The new fund would be available to community banks with less than $10 billion in assets to encourage lending to small businesses. The bill would combine the fund with about $12 billion in tax breaks aimed at both large and small businesses over the coming decade.

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.

"This bill is about righting a wrong that was done to small business when Wall Street closed Main Street down and cut off access to capital," said Sen. Maria Cantwell (D-Wash.).

Some Republicans, however, have likened it to the unpopular bailout of the financial industry.