Dems defeat GOP effort to cut Obama's stimulus package

WASHINGTON - Senate Democrats yesterday easily turned back a Republican effort to cut money from President Barack Obama's stimulus package and other government spending to pay for an extension in unemployment benefits and aid to doctors.

Republicans were on the losing end of a 57-41 vote on the measure, which would have cut stimulus dollars and other spending to finance a six-month extension of unemployment checks for people who've been out of work for more than six months.

The vote came as Senate Democratic leaders tried to shore up support for a scaled-back version of their jobless aid bill, which would renew parts of last year's economic stimulus measure. The catchall bill combines jobless aid for the long-term unemployed, help to cash-strapped state governments and the renewal of dozens of popular tax breaks for businesses and individuals.

Governors have complained that without additional state aid, hundreds of thousands of public employees and teachers will be laid off. Nevertheless, the measure failed to muster even a majority in a test vote Wednesday, falling far short of the 60 votes necessary to break a Republican filibuster.

The new version of the bill would add $55 billion to the deficit over the next decade, according to a Congressional Budget Office estimate.

"It's moving in the right direction but it's not there yet," said Sen. Susan Collins of Maine, a key GOP vote sought by Democrats.

Meanwhile, the House passed a bill making a $30-billion government fund available to community banks to increase lending to small businesses.

House Democrats projected that banks would use the fund to leverage up to $300 billion in loans to small businesses, helping to loosen tight credit markets. Republicans called the bill another bank bailout that would do little to increase lending to small businesses.

The bill passed by a vote of 241-182 as congressional Democrats struggled to balance election-year concerns about high unemployment with voter complaints about the rising national debt. Only three Republicans voted for the bill.