WASHINGTON — Defying expectations yet again, a bill to create a $30 billion small-business lending fund hit another wall Thursday, failing on a key procedural vote in the Senate that would have let it move toward final passage.
The move left it unclear if the bill would move forward before the Senate recess next week, although lawmakers said late in the day they were close to a deal that would allow it to proceed soon.
The bill had been expected to pass late Wednesday or early Thursday, but Senate Democrats were unable to find the 60 votes needed to thwart a filibuster threat. A cloture vote failed, 58 to 42, with GOP lawmakers all voting against the measure.
Republicans and Democrats traded barbs over who was to blame for the impasse. The GOP complained at being allowed to add only three amendments.
"Three amendments is not enough, and he knows that," said Senate Minority Leader Mitch McConnell, referring to Majority Leader Harry Reid.
"We are not expecting to have an unlimited supply of amendments," McConnell said, "but three amendments is not enough."
Democrats, in turn, accused the GOP of stalling tactics.
"It is astounding to me that we could not get even one Republican to join us today, but I do have hope. It's very clear who's trying to move forward and who's trying to stop this bill," Senate Small Business and Entrepreneurship Committee Chairman Mary Landrieu said after the vote.
The failed cloture vote left the fate of the bill unclear.
James Ballentine, the director of grassroots and community outreach at the American Bankers Association, said it was "extremely disappointing to many bankers that could have used this program to help small businesses."
"All is not lost, but next steps are very uncertain," he said.
Paul Merski, a senior vice president and the chief economist at the Independent Community Bankers of America, remained hopeful the bill could pass after the August recess.
"It's on life support. … The window is still open, but I think it may slip until September," he said. "It's definitely not dead. The latest objection was on procedure on how many amendments Republicans could add to the bill. The objections weren't on the underlying provisions in the bill."
Reid denied that Democrats have shut out Republicans from the process and acknowledged that his "frustration is pretty high."
"How can we have anything more bipartisan?" Reid said.
"This is about as fair as could be," he said. "My friends on the other side of the aisle indicated they wanted to offer some other amendments. We said go ahead and do that. They can't take 'yes' for an answer."
The bill has moved by fits and starts from the outset. The legislation would create a $30 billion fund to supply capital to community banks and give them incentives to make loans. A bank's dividend on the capital could shrink to as little as 1% as it increases such lending.
The capital would be free of Troubled Asset Relief Program-like restrictions such as warrants and restrictions on executive compensation. The bill also includes small-business tax incentives and extensions of Small Business Administration guarantees.
President Obama first proposed the plan in his State of the Union speech in January and escalated his campaign for it in a speech Wednesday in New Jersey.
"We've seen a fair amount of obstruction that's had more to do with gaining political advantage than helping the country," Obama said Wednesday. "But surely, Democrats and Republicans ought to be able to agree on this bill."
The lending fund has been the most controversial piece of the bill. Republicans have repeatedly characterized it as a "son of Tarp." Last week, Reid removed the lending fund from the overall bill, but senators added it back with an amendment.
This week, Republicans have complained that they were not allowed enough input on the bill.
"We could have been finished with this bill if we'd given members the opportunity to offer some amendments. … It's not about legislating anymore," said Sen. Olympia Snowe, R-Maine. "It's all political theater. … It's a disgrace for this institution, and I'm speaking for one who has worked mightily across the aisle."