Senate Republicans blocked a key vote today that would have sent the financial reform bill to the full Senate for debate.
The most extensive new Wall Street regulation since the Great Depression is aimed at preventing another financial crisis, but failed an initial procedural vote, 57-41, three short of the 60 needed to bring the bill to the floor.
Democrats accused Republicans of siding with Wall Street banks.
Senate Majority Leader Harry Reid compared the vote with deciding "whether party unity is more important than economic security."
President Obama said he was "deeply disappointed' in the vote.
Republicans were joined in their filibuster by Sen. Ben Nelson, D-Neb, sending negotiations on a Wall Street reform bill back behind closed doors as Democrats and Republicans try to find accord.
Chairman of the Committee on Banking, Housing, and Urban Affairs Sen. Chris Dodd, D-Conn., and ranking member Sen. Richard Shelby, R-Ala., met earlier today and may meet later tonight as they try to bridge their differences over the 1,000 plus page bill that passed through Banking Committee on party lines in March.
After the vote, Sen. Olympia Snowe, R-Maine, who had been viewed as a potential Republican switcher, issued a statement calling the vote "premature."
"If the Majority were truly interested in crafting the best policy by incorporating bipartisan ideas into the financial reform bill, they would not have proceeded to this premature and politically motivated vote. As progress continues to be made, we should be taking the additional time to work out the differences on the few issues where disagreements remain, so that we revise the current bill to protect Main Street and not Wall Street," she said.
Senate Democrats had hoped for a last-minute bipartisan deal before calling a vote to move the measure to the floor for debate. But Republicans say they're not ready to leave the negotiating table.
"All of us want to deliver a reform that will tighten the screws on Wall Street. But we're not going to be rushed on another massive bill," Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor.
Both parties largely agree on the necessity of tough new regulations on banks, new protections for consumers and assurances that the government will never again need to bail out massive financial institutions, but they differ on the fine print.
We are "conceptually very close together," Shelby told ABC News earlier today. But "there's flexibility in what the FDIC and the Fed can do now and we want to tighten that language up."
Many Republicans fear the legislation has too many loopholes that could allow for future bailout of Wall Street firms. Others say some rules are too broad and could infringe on small banks and businesses that have played by the rules.
Still, Democrats insist there should be no more delay in implementing the measures.
"Here we are 17 months after someone broke into our house, in effect, and robbed us, and we still haven't even changed the locks on the doors and we need to get it done," Dodd said Sunday on NBC's "Meet the Press."