WASHINGTON - The Senate began debate Thursday on a bill that party leaders have pitched as much-needed relief for distressed homeowners but that spends much more to help the home-building industry.

That provision came under scrutiny as Republicans and business-friendly Democrats scuttled an amendment, offered by Sen. Richard Durbin, D-Ill., that would have let bankruptcy judges modify the terms of mortgages for primary residences. It was rejected 58-36.

The idea, opposed by banks and their GOP allies and a handful of Democrats, was to give borrowers duped into abusive mortgages leverage in getting their loan terms adjusted.

The defeat of the amendment highlighted a weakness that many people find with the bill -- that it showers tax breaks on money-losing businesses but does little to help people facing foreclosure.

Its most costly provision gives tax cuts worth $25 billion over the next few years to businesses such as home builders and banks. But it provides $3 billion in tax relief to homeowners over the same period, said an estimate by the Joint Tax Committee, which explores for lawmakers the effects of tax legislation on the Treasury.

The bill also would provide a temporary $7,000 tax credit awarded over two years to people buying foreclosed homes in the year after the bill is enacted.

The bill attracted several amendments to cut taxes further, including a plan by Sen. Ben Cardin, D-Md., to give a temporary $7,000 credit to first-time home buyers and a plan by Sen. Norm Coleman, R-Minn., to let homeowners who are late on their mortgage payments withdraw money penalty-free from their retirement accounts to avoid foreclosure.

LOS ANGELES TIMES, AP