WASHINGTON -- Times are still hard but Don Brostoski is ready to expand his Portland business if only he can find a bank willing to make a loan.
"If I could receive capital easier, yes, it would allow me to expand our business tremendously," said Brostoski, president and founder of
, which employs 25 people and bills itself as the country's oldest manufacture of billiard and game tables.
"I could expand like crazy and hire people," he said.
But the big banks are hoarding cash while most of the community banks that small businesses traditionally use are tapped out, restricted by federal rules from making loans until they boost their reserves.
Congress wants to help. But entrenched partisanship and a fast-approaching election has stalled progress in the Senate of legislation designed to help small business.
Democrats finally broke a Republican filibuster Thursday night after a long day of debate and back room negotiations involving an amendment by
, D-Ore., that would provide $30 billion in federal dollars to community banks to recycle as small business loans.
The vote was 60-37, with two Republicans joining Democrats to provide the 60 votes needed to end debate. The full bill is still pending -- with a vote possible next week -- but Democratic leaders expressed confidence Thursday night that they could push it past any remaining GOP objections. The House passed its version of the small business lending program in June.
The bill would let "community banks do what they do best, which is evaluate the best opportunities to invest," Merkley said Thursday in an interview. "These are not guaranteed loans. The banks pay a price if they make a bad loan. They have no incentive to make a loan unless they think it will be a good one."
The House has already passed a similar provision, but prospects in the Senate are unclear. Even if the $30 billion is approved, Democrats may not have the votes to pass the full legislation.
The lending proposal was immediately scorned by Republicans as a bailout similar to the unpopular Troubled Asset Relief Program or TARP that saved big banks, financial institutions and insurance companies from ruin by pouring hundreds of billions of tax dollars into their accounts.
Democrats spent the day search for one or more Republicans to support the program. In the end, two did -- George LeMieux of Florida and George Voinovich of Ohio. But their support was uncertain for final passage, meaning the ultimate fate of the bill -- and the $30 billion lending program -- remained in doubt.
The fight over the small business lending fund -- Democrat's best hope for moving job creating legislation before the six-week August break -- touched off a furious and angry debate, highlighting once again the unrelenting partisanship that defines the chamber.
Texas Republican Sen. John Cornyn called the lending provision a "slush fund," likening it to TARP.
"I think there's such a bad taste in people's mouths with stimulus and the expansion of the TARP beyond its original purpose, it just looks like another slush fund," Cornyn said in an interview when asked about Republican rejections.
Later in the day, Sen. John Thune, R-S.D., said from the Senate floor, "You can't get away from the fact that this is an extension of TARP, a $30 billion reincarnation of TARP."
Unlike institutions that took TARP dollars, banks accepting the small business money would have to be deemed "healthy" by federal regulators and would be penalized if they don't use the money to make loans to small businesses.
The nonpartisan Congressional Budget Office calculated that the provision would make $1 billion in profits over 10 years from interest on the loans. That money would be returned to the Treasury.
"The strange thing is, this is the type of amendment I would have expected 80, 90 to 100 senators voting for. It spends no money. It makes money. It addresses significant liquidity issues facing small business in America, which is Main Street," Merkley said.
Forty-five percent of businesses seeking credit found that their borrowing needs were not satisfied, according to a survey earlier this year by the National Federation of Independent Business. By comparison, only about 11 percent of borrowers did not get most or all of the credit they wanted in a similar survey conducted in 2006.
The drought is significant because small businesses have created 64 percent of all new jobs over the last 15 years, according to the Small Businesses Administration.
Beyond the lending provision, the bill is largely noncontroversial. It carries about $12 billion in tax breaks for small businesses that allow, among other things, reduced taxes on capital gains from the sale of some stock related to a small business held for more than five years, as well as the opportunity to claim faster depreciation on big-ticket expenditures related to the business.
The bill also enlarges a collection of loan programs run by the Small Business Administration.
, The Associated Press