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The Senate passed the $42 billion small business bill Thursday more than a month after bipartisan wrangling, followed by a poorly-timed summer vacation, stalled the legislation.

The bill passed in a 61-38 vote and will now go to the House for final approval before it is sent to President Obama for his signature. The House already passed a similar version of the legislation in June. The President, whose administration originally put forth the bill, has already indicated that he will sign it into law. On Wednesday, he publicly urged Congress to look beyond party lines in order to pass it.  

"At a time when small business owners are still struggling to make payroll and they're still holding off hiring, we put together a plan that would give them some tax relief and make it easier for them to take out loans," Obama said at a White House press conference on Wednesday.

The speech was given just one day after Senators George Voinovich (R- Ohio) and George LeMieux (R-Fla.) broke with their party to end the Republican filibuster and advance the bill to a final vote.

Once passed, the bill will establish a $30 billion government fund to help community banks increase lending to small businesses and it will also create about $12 billion in tax breaks designed to benefit small businesses.

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Additionally, the measure would allow owners to deduct the costs of health insurance for themselves and their families from self-employment taxes, but only for the 2010 tax year.

Initially, Republicans opposing the bill argued that the legislation was too expensive and likened it to more stimulus spending which would put the nation further into debt.

By the time the bill reached the Senate floor for the first time, both parties agreed on the bill’s major stipulations, but clashed when Republicans wanted to add unrelated amendments that would, among other things, increase border security, impose a government spending cap and lower the estate tax.

Funding for the bill would be derived by allowing taxpayers to convert 401(k) and government retirement accounts into Roth accounts, in which they pay taxes up front on the money they contribute, enabling them to withdraw it tax-free after they retire.

Interestingly, the legislation was formerly part of a larger $134 billion grab bag bill, called the American Jobs and Closing Tax Loopholes Act, which didn’t pass the Senate due to its large price tag. Congress has, however, passed much of this bill through smaller pieces of legislation, extending higher Medicare payments to physicians in June, a homebuyer tax credit one week later and benefits to the long-term jobless in late July.

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