Small business aid bill stalls in Senate

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He said the Democrats realized "they couldn't run on a record of job-killing taxes, burdensome new regulations, massive government intrusions, and record deficits and debt."

McConnell said there were ways the bill could have passed with bipartisan support but Democratic amendments prevented that.

"They've been adding either controversial or completely unrelated matters to this bill," McConnell said.

He said Democrats were attempting to add $10 billion for teachers and $16 billion for Medicaid to the bill, and that the bill has over a billion dollars earmarked for agriculture.

Landrieu jumped on that objection.

"Does the Minority Leader think that farmers are not small business people?" she said.

Sen. George LeMieux, R-FL, who worked with Landrieu on key provisions of the bill, also said he voted against the measure because it had appropriations that had nothing to do with small business or job creation.

But LeMieux did speak well of the bill in general.

"This bill is going to be good for America," LeMieux said. "it is going to be good for Florida. It will bring needed money to Main Street. It will allow small banks to make loans to the mechanics, the dentists, the hairstylists. It is a good bill and I'm hopeful the leaders on both sides can come together and reach an agreement, so that we can all vote for it."

"It's all politics, on both sides of the aisle, aimed at the elections," said Dean Baker of the Center for Economic and Policy Research. "The Democrats want to hand money out to small banks and win some support among traditionally Republican backers, while the Republicans don't want the Democrats to have any achievements to show when they campaign."

Daniel Mitchell of the Cato Institute, agreed that political considerations were uppermost.

"If this were normal political times, then this bill would have bipartisan support, with both sides agreeing to rape the taxpayer," Mitchell said. "But this is an election season and there is a lot of angst out there among voters -- the Tea Party, yes, but other voters, too -- and Republicans do not want to be part of making government bigger or handing out money."

Mitchell said that, in the George W. Bush years, these same Republicans were among the "biggest pork-barrelers and spenders in American history."

"But now, with the elections looming, the Republicans have gotten religion," he said. "They know that, in this environment, you are not going to lose votes by voting against bigger government."

The bill would, among other things, provide $30 billion in capital to small banks with incentives to increase small business lending; create the State Small Business Credit Initiative to strengthen state programs that support lending to small businesses and small manufacturers; eliminate capital gains taxes on certain small business investments; and increase the amounts of loans that the federal Small Business Administration could provide.

"If this bill becomes law, small businesses and start-ups will see the positive benefits right away," said President Obama, who helped to craft the measure.

Among the organizations supporting the bill are the Conference of State Bank Supervisors, the Independent Community Bankers of America, 29 state banking associations, the Motor & Equipment Manufacturers Association, the National Association for the Self-Employed, the National Bankers Association, the National Federation of Independent Business, the National Small Business Association and the U.S. Hispanic Chamber of Commerce.

Steve Verdier of the Independent Community Bankers of America said he was hopeful Democrats and Republicans could resolve their differences and pass the legislation.

"We support this legislation because it is a way to help banks lend money in markets where there is a demand for loans," Verdier said. "We need to get this economy going again, and this bill will help. The parties should work together to get this bill passed. I think they will find a way and the bill will pass. But probably not today."