Update at 1:10 p.m.:
The Democrats' student loan bill, as predicted, has failed to move forward in the Senate.
Cloture on the "motion to proceed" to the bill was not invoked which means the bill will not be formally taken up.
The vote was a party-line vote - 52 to 45 with one Senator, Sen. Olympia Snowe, R-ME., voting present. Not voting were Sen. Lugar and Sen. Kirk.
Majority Leader Reid changed his vote to "no" in order to enter a motion to reconsider, perhaps indicating that there is a way forward being negotiated. Both parties are currently huddling for their weekly strategy sessions.
The Senate is going nowhere fast in attempting to prevent student loan rates from doubling July 1.
It is scheduled to vote today to take up the Stop Student Loan Interest Rate Hike Act. But the vote, just to move forward to a debate on the bill, is in jeopardy, indicating the heated election-year politics affecting every move the Senate makes.
Both Republicans and Democrats believe the subsidized Stafford loan rates should not be doubled from the 3.4 percent to 7.6 percent and agree the lower rate should be extended for at least another year.
But both sides cannot agree on how to pay for the $6 billion bill, setting up a nasty battle that will plague Congress in the weeks and months ahead.
Democrats propose paying for the bill by raising the Medicare and Social Security payroll taxes on high-earning stock holders of some privately owned companies. Republicans oppose the measure.
"We just disagree that we should pay for a fix by diverting $6 billion from Medicare and raising taxes on the very businesses we're counting on to hire these young people," Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor this morning. "Solving the problem isn't what this is about for Senate Democrats and the White House that they're coordinating with."
Republicans propose to pay for the bill by getting rid of a preventative health fund that was created in the health care bill. Democrats oppose this and the proposal has no chance of getting through a Democratic-controlled Senate.
"We have already cut that plan to the bare bones," Senate Majority Leader Harry Reid, D-Nev., said this morning on the Senate floor. "Fluff that was in that program is gone. Some say we've cut far too much out of it."
Republicans are likely to "filibuster" the Democratic proposal by preventing the bill from proceeding without the 60 votes needed.
Senate Democrats say they are happy to offer Republicans a vote on their alternative pay-for, but first the bill has to be moved forward in the Senate without a Republican filibuster. Meaning the "motion to proceed" today is an important step Senators must take if they are serious about moving this bill forward in the Senate. Senate Republicans say they are working with Reid to try to lock in a vote on their own bill.
Both sides in the Senate are already in overdrive, casting the other side as being contrarian and political. Senate Democrats today trotted out college students who are already deep in student loan debt who would bear feel the painful effects of a doubling of their rates this summer.
"They are sending a message that they'd rather protect wealthy tax dodgers; that's what they are," Reid said of Republicans.
McConnell countered, "The real enemy of recent college graduates is this president's economic policies. The real losers will be the young people we should be working together on a bipartisan basis to help."