Senate Breaks Bank Bill Filibuster

The Senate has moved a step closer to providing $30 billion to small banks for small-business lending.

Image: File

Fresh from their victory in the all-out battle over extending unemployment benefits, Democrats in the Senate can chalk up at least another partial win in the wars over President Barack Obama’s economic agenda.

The Senate voted 60-37 Thursday night to end debate on a measure Obama proposed in his State of the Union address earlier this year, the funneling of $30 billion to regional and community banks to juice lending to small businesses, seen as key to getting the job-creation engine started.

As with extending unemployment benefits to more than 2 million unemployed Americans, Democrats needed some Republican help to end debate on the multibillion-dollar measure. Republicans George Voinovich of Ohio and George LeMieux of Florida voted for the measure.

"This bill primes the engine for investment," LeMieux said.

But by far the majority of their party in the Senate remains staunchly opposed to the measure. And Democrats will need the support of at least a couple of Republicans to give final passage to the measure.

Obama and the Democratic majority in Congress have portrayed the $30 billion fund as a measure designed to juice lending to small business. Difficulty getting credit is one of the top reasons small businesses have been hesitant to expand, even as the economy has recovered, and without small-business expansion, the unemployment rate is likely to remain high.

Small businesses account for more than 70 percent of private-sector jobs in the U.S.

But the GOP has portrayed the bill as another bailout for banks, trying to tie it in an election year to the hugely unpopular Troubled Asset Relief Program (TARP) they helped pass at the end of President George W. Bush’s administration to rescue a collapsing Wall Street.

"I believe that American taxpayers have lost their appetite for bank bailouts," Senator Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, said.

Senator Mary Landrieu, the Louisiana Democrat who chairs that committee, shot back that this was no bailout, the Associated Press reported.

"Contrary to what some are saying about this lending fund, this program is not to bail out the big banks, it is for the small businesses across this country," Landrieu said. "We are simply using the healthy community banks as a conduit to get money flowing to these businesses."

The Congressional Budget Office expects the fund to generate a $1 billion profit for the government in the form of dividends paid by banks that take advantage of the fund.

The end of the jobs filibuster marks a week in which the Obama administration and its Congressional allies have gone on the offensive against what they call Republican obstructionism on key bills designed to juice growth in the slow economy.

Thursday, the U.S. House of Representatives passed and President Obama signed a measure geared to extend unemployment benefits to the more than two million Americans for whom those benefits had expired. It took four tries for Senate Democrats to end a Republican filibuster of that bill in the Senate.

Obama got the ball rolling during his weekend address last week, lashing out at the minority party and calling on Congress to pass the unemployment and bank bills.

“Too many of our small-business owners and those who aspire to start their own small businesses continue to struggle, in part because they can’t get the credit they need to start up, grow, and hire. And too many Americans whose livelihoods have fallen prey to the worst recession in our lifetimes—a recession that cost our economy eight million jobs—still wonder how they’ll make ends meet,” Obama said. “That’s why we need to take new, commonsense steps to help small businesses, grow our economy, and create jobs—and we need to take them now. For months, that’s what we’ve been trying to do. But too often the Republican leadership in the United States Senate chooses to filibuster our recovery and obstruct our progress.”