Small-Business Bill Advances; Campaign Finance Bill Stalls

WASHINGTON  Senate Democrats failed Thursday to advance campaign finance legislation that would force businesses, unions and others to disclose how they were spending money in political campaigns and where they were getting it.

The vote was a defeat for President Obama on one of his top legislative priorities. For months, Mr. Obama has urged Congress to undo the damage he said was caused last January by a Supreme Court decision on campaign finance, saying the failure to act would herald “the corporate takeover of our democracy.”

But Republicans would not budge, blocking the bill from even coming to a vote and accusing Democrats of ignoring bigger problems.

The president fared better on a separate matter, as the House approved and sent to Mr. Obama for his signature a Democratic plan to aid small businesses. By a vote of 237 to 187, the House passed legislation that would create a $30 billion loan fund for small businesses and provide other tax incentives to encourage hiring and stimulate growth. On the measure, 236 Democrats and one Republican voted yes while 174 Republicans and 13 Democrats opposed the bill.

Mr. Obama said in a statement that he would sign the small-business bill on Monday, calling it “a common-sense plan to put Americans back to work.”

But his hopes for signing legislation on campaign finance before the November elections quickly evaporated Thursday afternoon on the Senate floor. With no Republicans voting to cut off debate, the vote was 59 to 39  one short of what the measure’s supporters needed. The House had approved the measure on a party-line vote in June.

The measure would have forced companies, unions, special-interest groups and other organizations active in political campaigning to disclose in federal filings their donors of more than $1,000 and to require the head of an organization that paid for a political commercial to appear on camera to say, “I approved this message,” just as candidates themselves now do.

It would also prevent government contractors, businesses that received federal bailout money and foreign corporations from spending on campaigns.

Democrats maintained that with a recent surge in money from outside groups that do not have to disclose their donors, the bill was essential to maintaining some transparency in the political process and neutralizing the impact of big businesses.

But Republicans asserted that it went too far. Republicans had also succeeded in July in blocking a vote in the Senate, but Democrats held out some hope that they could sway one or two moderate Republicans by making concessions this week. Senator Charles E. Schumer, the New York Democrat who authored the bill, offered to pare down the measure and to ensure that it would not be enacted until after the November elections to appease Republicans who asserted that the measure could be used to help Democrats gain re-election.

Republicans, however, would not relent.

Senator Mitch McConnell of Kentucky, the Republican minority leader, said Democrats should be focusing on issues that Americans really care about  especially jobs and the economy  instead of wasting two days of debate on a measure that he asserted would mean “more government control” over political finance.

Liberals pushing for changes in campaign finance did take some solace, however, in a separate vote in a House committee to provide some public financing for Congressional candidates.

“It was a ‘you win some, you lose some’ day for campaign finance,” Lisa Gilbert, who tracks political finance issues for U.S. PIRG, a federation of public interest groups.

The House committee on administration voted to approve a bill that would provide matching federal money for Congressional candidates who attract enough small local donors. The financing  potentially hundreds of millions of dollars  would come from the sale of broadcast spectrum and would not require any additional taxpayer money, sponsors say.

Republicans quickly signaled that they would fight this bill as well. Mr. McConnell, in fact, linked the two measures in voicing his opposition and questioning the priorities of Democrats who support public financing.

“Have they no shame?” Mr. McConnell asked. “The last thing the American people want right now is what amounts to welfare for politicians.”