Senate Republicans--and one Democrat--again have blocked a package of extensions of tax incentives, including some that construction industry groups support. Democrats' failure to win a procedural vote on June 24 sends the drafters of the bill back to the drawing board.

The 57-41 vote to cut off debate on the tax "extenders" bill was three votes short of the 60 that Democrats needed. Democrat Ben Nelson of Nebraska joined 40 Republicans who voted "no."

It is the third time that an extenders package has been sidetracked on the Senate floor in recent weeks. The latest vote left the fate of the measure up in the air.

In response to GOP-led criticism that the measure was too costly, Senate Finance Committee Chairman Max Baucus (D-Mont.), the tax bill's main architect, said on the chamber floor that he had reduced the price tag repeatedly, from $200 billion about two months ago, to less than $110 billion.

Baucus also said that the latest version of the bill was "more than two-thirds paid for," through a collection of tax increases that Democrats termed "loophole-closers." Democrats said the only provision that wasn't offset was an extension of unemployment benefits.

Construction interests backed several of the bill's provisions, including:

  • a two-year extension of the Build America Bonds program, which helps finance public-works;

  • $521 million in additional federal-aid highway funds

  • a one-year extension of accelerated depreciation for upgrades to restaurants and buildings that developers lease to tenants;

  • a one-year extension of a tax credit for contractors who build energy-efficient homes;

But construction industry groups also opposed some of the package's revenue-raising offsets. A particular target was a provision aimed at small firms organized as "S Corporations." The proposal would require more "S Corps" to pay Social Security and Medicare payroll taxes, and raise an estimated $9 billion over 10 years.

Design and construction groups joined the U.S. Chamber of Commerce and other business organizations to oppose the provision. Instead, they endorsed a proposal from Sen. Olympia Snowe (D-Maine)--a key possible swing vote for the overall bill--to strip the S Corp. language from the package.

Baucus modified the language, to reduce its impact to $9 billion, from $11 billion in an earlier version, but that wasn't enough to win Snowe's vote for the measure.

Even before the "cloture" tally, Majority Leader Harry Reid (D-Nev.) said that if his side lost the vote, he would move on to a different bill, a small-business jobs measure.