WASHINGTON — The Senate on Thursday approved a multi-billion dollar package of tax breaks and government-backed loans for small businesses, as Democrats sought to use the muscle of their majorities to pursue a Congressional agenda that would make their case for retaining control in the House and Senate this fall.

After surmounting months of Republican opposition to approve the small-business measure and send it to the House, Democrats — over sharp Republican objections — set up a floor showdown for next week over a Pentagon policy bill that also touches on the politically charged issues of immigration and gay men, lesbians and bisexuals in the military.

The Pentagon bill would not only allow the repeal of the "don't ask, don't tell" policy, but would also include legislation that would provide a path to citizenship for illegal immigrants who arrive in the United States before age 16, reside here for five years, earn a high school degree and complete two years of college or military service.

The immigration language is being added at the behest of the Senate majority leader, Harry Reid, who is eager to mobilize Hispanic voters for his re-election campaign in Nevada, and it reflects a broader Democratic effort to secure support from Hispanic Americans nationwide by promising a comprehensive immigration bill in the future.

To underscore that commitment, President Obama met in the Oval Office on Thursday with three prominent Hispanic Democrats: Senator Robert Menendez of New Jersey and Representatives Nydia M. Velázquez of New York and Luis V. Gutierrez of Illinois.

In the House, Democrats are pressing forward with legislation to promote American manufacturing, an issue of major resonance in some of the battleground states of the Rust Belt, including Pennsylvania, Ohio and Michigan.

The renewed effort by Democrats to use their power in Congress to promote their agenda comes as a New York Times/CBS News poll shows voters dissatisfied with Democrats but even more so with Republicans. That could give Democratic incumbents, who are trailing in many polls, an opening in a year when they seem certain to lose seats.

Most of the measures are not likely to be completed before lawmakers leave Washington to campaign in early October, but Democrats said the legislative push was a good way to show voters, particularly their party's base, that they were battling on numerous fronts.

"We live in an information age," said Senator Maria Cantwell, Democrat of Washington. "Every day that can define what you are for and what you're not for is helpful."

With the two parties also locked in a major fight over what to do about a set of expiring tax cuts, the legislative maneuvering was infuriating Senate Republicans, who said the Democrats were abusing the floor to try to score political points.

Senator John McCain of Arizona, the senior Republican on the Armed Services Committee, said the Democrats were turning a normally bipartisan military measure into a vehicle to advance social policy priorities like immigration and gay rights.

"The majority leader is turning legislation on our national defense into a political football," Mr. McCain said.

Mr. Reid seemed only to inflame Republican anger when he conceded in a floor speech that the Pentagon measure had virtually no chance of being adopted until after the election but nonetheless called on Republicans to allow debate to begin next week.

"This bill should be an easy one," said the Senate Republican leader, Mitch McConnell of Kentucky. "We should be a united body and give our troops a responsible defense policy bill they need, and then the defense appropriations bill they need. Without strings. Without games. And save the politics for the campaign trail."

Mr. Reid scheduled a procedural vote for Tuesday, and Democrats need the support of 60 senators to bring the bill to the floor. The Democrats now nominally control 59 seats.

Democrats said they also intended to offer an amendment to the military bill that would end the practice of "secret holds" in the Senate, by which lawmakers can block a bill under the cloak of anonymity.

With the prospect of potentially steep losses in November, Democrats, led by President Obama, are counting on the small-business measure to illustrate their efforts to revive the faltering economy, and to define Republicans as obstructionists.

The vote on the small-business measure was 61 to 38, with just two Republicans, George V. Voinovich of Ohio and George LeMieux of Florida, joining Democrats in favor of it.

Mr. Voinovich is retiring after this year, and Mr. LeMieux is leaving after serving as a temporary successor to Mel Martinez, who retired last year. Every other Republican voted no except Senator David Vitter of Louisiana, who was absent.

In addition to providing tax breaks and enhancing a number of existing aid programs within the Small Business Administration, the legislation will create a $30 billion lending program within the Treasury that will channel government-backed loans through community banks.

Asked if he was disappointed that more Republicans had not supported the measure, Mr. LeMieux said, "I'm just glad we were able to pass it." He noted that Florida has more than two million small businesses that stand to benefit from the legislation.

Senator Mary L. Landrieu, Democrat of Louisiana, the primary author of the bill, said she wished it had been approved eight months ago and blamed Republicans for delaying it. "Every week that we've waited to pass this bill has been another tough week for small businesses throughout this country," Ms. Landrieu said.

She said that local bankers were eager to begin making loans and that credit could begin flowing shortly.

House Democratic leaders said they hope to pass the bill quickly and send it to Mr. Obama, who is eager to sign it.

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http://www.nytimes.com/2010/09/17/us/17cong.html?_r=1&hp