Reporting from Washington — Attempts to pass a sweeping overhaul of financial regulations stalled in the Senate as a key procedural vote failed Wednesday because of near-unanimous Republican opposition and concerns from two Democrats that the legislation was not tough enough on Wall Street.
Senate Democratic leaders failed to get the 60 votes needed to end debate on the legislation and bring the sweeping financial reform legislation to a final vote.
The failure caused partisan tensions to flare. But another vote was scheduled for Thursday and key Democrats said they were hopeful they could overcome the procedural hurdle.
"We're going to keep this fight going. We've got to win this fight," said Sen. Richard J. Durbin (D-Ill.) "The American people are counting on us to make these changes, to guarantee we don't face another recession like this again."
Senate Democratic leaders needed only two votes to end debate, though the final tally was 57 to 42. In a standard maneuver, Majority Leader Harry Reid of Nevada changed his vote to "no" because only someone who votes "no" can easily ask for a revote without going through more extensive procedures.
Democrats noted it took three similar attempts last month to overcome strong Republican opposition and gain the 60 votes necessary to start work on the legislation. Most Republicans continue to oppose the legislation as an unnecessary expansion of government regulation.
But two Republicans from Maine, Sens. Susan Collins and Olympia J. Snowe, broke ranks Wednesday and joined with Democrats in voting to end debate.
The legislation is a top priority of the Obama administration and congressional Democratic leaders.
It would create an independent bureau in the Federal Reserve to protect consumers in the financial marketplace, grant the government power to seize and dismantle teetering firms whose failure would pose a danger to the economy, impanel a council of regulators to monitor the financial system for major risks and impose strict regulations on complex financial derivatives.
Democrats could be helped by the potential return to Washington of Sen. Arlen Specter (D-Penn.), who missed Wednesday's vote after losing his reelection primary. His office did not respond to calls about his whereabouts or whether he would be back Thursday.
More time also could help ease concerns from the two Democrats who opposed their party leadership on the vote — Sen. Maria Cantwell of Washington and Russell D. Feingold of Wisconsin.
Cantwell wants the full body to vote on two amendments — one to tighten new proposed regulations on complex financial derivatives and another to restore a prohibition against federally insured commercial banks that also do investment banking. Feingold also wants a vote on the banking prohibition.
"The test for this legislation is a simple one — whether it will prevent another financial crisis," Feingold said after the vote. "As the bill stands, it fails that test. Ending debate on the bill is finishing before the job is done."
Reid and other Democratic supporters of the legislation tried unsuccessfully on the Senate floor to persuade Cantwell to change her vote. But she sat stone-faced and refused their pleas.
Cantwell said she's most concerned about getting a vote on her amendment to ensure that derivatives do not elude new regulations requiring them to be traded on public exchanges and through central clearinghouses.
"Trading of dark market derivatives is what has brought this challenge to our U.S. economy," she said. "Let's bring some transparency into that market."
Democrats and Republicans have been trying to reach agreement on a few remaining sticking points, but disputes are lingering over several amendments that have not yet had votes. Among them is an attempt by auto dealers to be exempted from oversight by the new Consumer Financial Protection Bureau.
"There was opposition from Republicans and Democrats to shutting down debate because there are important amendments that should be considered but that could have been shut out by this procedural move," said Sen. Charles E. Grassley (R- Iowa).
The two Democratic defectors also made it tougher for some Republicans to vote to end debate, said Sen. Bob Corker (R-Tenn.)
Despite numerous changes made in the bill over the last three weeks, Senate Republican leaders remained strongly opposed, as are many business groups and financial firms.
"Now, everyone recognizes the need to rein in Wall Street to prevent another crisis. But the bill the majority wants to end debate on [Wednesday] does not do that," Senate Minority Leader Mitch McConnell (R-Ky.) said. "Instead, it uses this crisis as yet another opportunity to expand the cost and size and reach of government."