WASHINGTON — Defying expectations once again, a bill that would create a small business lending fund failed to pass a critical vote that would have limited debate and allowed it to move toward final passage.
The legislation had been expected to pass late Wednesday or early Thursday, but Senate Democrats were unable to find the necessary 60 votes to avoid a filibuster threat. A cloture vote failed 58 to 42, with GOP lawmakers all voting against the measure. Republicans argued they did not have enough opportunity to offer amendments to the legislation.
"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."
Democrats countered that they had already included plenty of Republican ideas in the final bill.
"It's very clear who is trying to move forward and who is trying to stop this bill," Senate Small Business and Entrepreneurship Committee Chairman Mary Landrieu said following the vote.
Senate Majority Leader Harry Reid agreed to allow votes on three Republican amendments but that did not satisfy GOP leaders. Reid acknowledged his "frustration is pretty high."
"How can we have anything more bipartisan?" Reid said. "This is about as fair as could be. 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."
Minority Leader Mitch McConnell said Democrats hadn't done enough to accommodate Republicans.
"Three amendments is not enough and he knows that," he said. "We are not expecting to have an unlimited supply of amendments but three amendments is not enough."
Sen. Orrin Hatch, R-Utah, agreed.
"We can't have a reasonable shot of putting up amendments," he said. "That's not the way to do things."
The bill has been plagued with fits and starts from the outset. The legislation would create a $30 billion fund to provide capital to community banks and give them incentives to make loans. A bank's dividend on the capital could decrease to as little as 1% as it increases such lending.
The capital would be free of Tarp-like restrictions such as warrants and executive compensation. The bill also includes small-business tax incentives and extensions of Small Business Administration guarantees.
The House passed the bill on June 17 by a vote of 241 to 182. Since then, however, its fate has been up and down. Early on, many analysts predicted the fund had no traction because of GOP complaints it was another Troubled Asset Relief Program. But Republicans unexpectedly supported the bill, giving it momentum only to see it subject to delays and a move by Democrats to strip the fund out of the bill (it was later added back with the help of a few Republicans). By Wednesday, the bill appeared certain to pass only to see Republican leaders grow frustrated with the process.