WASHINGTON — The Senate voted 60 to 37 late Thursday to stop debate on an amendment that would create a $30 billion small business lending fund.
The vote was a critical test for the measure, and means it will almost certainly be added back to a bill seeking to provide tax relief to small businesses and expand Small Business Administration guarantees. A final vote on the amendment and the overall bill is expected next week.
The vote was a rare nail-biter as lawmakers appeared unsure until the final moment if they had enough votes to invoke cloture on the amendment, a process that requires 60 votes. Once cloture is invoked, the amendment needs only a simple majority to pass, a much easier standard.
Republicans fought hard to stop the amendment from passing cloture, arguing the fund, which would allow community banks to access capital to boost lending to small businesses, was a second Troubled Asset Relief Program.
Democrats, meanwhile, spent the day furiously arguing against that characterization.
"I have to hear from Republicans that we just can't go there because it might look like and smell like Tarp," Senate Small Business Committee Chairman Mary Landrieu said. "Are they afraid of their own shadows? I don't care what it feels like. It's what it is. This is not Tarp."
Sen. Carl Levin, D-Mich., agreed.
"Some of our colleagues objected to this provision, ostensibly on the grounds that it was a reprise of the TARP program," Levin said. "But unlike Tarp, in which most of funds went to the largest institutions, this program targets the community banks that actually make the vast majority of small business loans. While many of the financial institutions receiving Tarp funds failed to use that support to make the business loans needed to boost our economic recovery, this program's whole purpose would be to increase small-business lending."
The amendment would add the program back to the small business bill after it was removed late Wednesday by Senate Majority Leader Harry Reid, who feared he did not have enough support to pass it.
Some Republicans sought to use the move against the amendment.
"The reason this provision was stripped out was not because Republicans alone objected," Sen. John Thune, R-S.D. "There were Democrat objections as well. It was taken out of the base bill. It is now being offered as an amendment for that reason. It certainly isn't Republicans who are trying to stop us from doing things to help small businesses."
Sen. Bob Corker, R- Tenn., called the program a "son of Tarp" that carries even greater risks.
The fund was originally the heart of the small-business bill, which also includes tax relief measures and a separate state lending program.
But not all Republicans opposed the program. Sen. George Voinovich, R-Ohio, dismissed fellow GOP lawmakers' characterizations of the fund. Sen. George LeMieux, R-Fla., cosponsored the amendment with Landrieu that added the fund back.
"This isn't Goldman Sachs, this isn't AIG, this is the banker down the street … It provides $30 billion for local banks to make loans to local businesses," LeMieux said.
The fund was first proposed by the president in January. The House passed it on June 16 by a vote of 241-182. The House measure did not include the small business tax credits or the SBA guarantee provisions.