U.S. Senate Democrats rejected a bill on Thursday to make a business research tax credit permanent after Republicans tried to attach it to a long-stalled small-business bill.
Democrats rejected the research and development tax credit on the grounds that it would delay passage of a larger small-business bill, which President Barack Obama is pushing for as part of his efforts to jump-start the economy.
Democrats later on Thursday passed their small-business bill, which Republicans had delayed since late July, to show voters they are working to improve the economy ahead of the Nov. 2 elections.
Democrats argued that attaching the R&D measure would cause further delays by forcing it back to the committee level.
"These motions are the way that folks score points, these motions are the way that folks try to embarrass," Democrat Senate Finance Chairman Max Baucus said.
Making permanent the research and development tax credit is one of Obama's signature proposals to jump-start the economy, and enjoys bipartisan support. The federal tax credit is now expired but is typically renewed annually.
"If Senate Democrats really want to do something for private sector jobs in this country, they should support Senator's Hatch's bipartisan R & D tax credit," Republican Senate Leader Mitch McConnell said.
Most Republicans oppose the small business measure, calling it a bailout because it includes a $30 billion lending fund.
Republicans have blocked most of the Democrats' job creation bills this year and Democrats are eager to pass the measure before facing voters in November