Bill to aid small-business advances in U.S. Senate

Democrats in the U.S. Senate advanced a measure to help small businesses on Tuesday, less than two months before they face voters who blame them for an economy still burdened with high unemployment.
The 61 to 37 vote enables Democrats to move toward a final vote on a long-stalled package of lending incentives and tax breaks for small businesses, possibly by the end of the week.
The bill, which President Barack Obama and his fellow Democrats say will spur hiring, represents one of the party's final chances before the November 2 elections to show voters they are working to improve the economy.
If the measure clears Congress, it would be a rare victory on the job-creation front for the Democrats, who have seen many of their other efforts blocked by Republicans this year.
The final weeks before the November elections are likely to be consumed by a clash over income tax rates, which will rise for all Americans at the end of the year if Congress does not act.
Obama and many Democrats want to keep the tax current rates in place for everybody except the wealthiest 3%, while Republicans want to keep the current rates in place for everybody.
Republican senators George Voinovich and George LeMieux broke with their party to support the Democrats' small-business bill that would create a $30 bln fund for the government to invest in independent community banks to encourage lending to small firms.
It would also exclude from taxes all capital gains on sales of small business stock and ease tax rules for expensing and depreciation of equipment. Tax breaks in the bill total $12 bln.
Anne Mathias, an analyst with the Concept Capital research group, said the bill's lending incentives probably would encourage banks to free up more capital to lend to small businesses, but the tax provisions would not have a "revolutionary" impact.
Democrats estimate the measure could create 500,000 new jobs. Some 8 mln jobs have been lost since the worst recession in 70 years began in late 2007.
With unemployment stuck at 9.6%, Republicans are poised to rack up big gains in the November elections, possibly winning control of the House and the Senate, due in part to public perceptions that Democrats have not done enough to create jobs.
The U.S. government's definition of what constitutes a "small business" varies by sector, but typically encompasses firms that employ fewer than 500 workers or take in less than $7 mln in annual revenues.