Defiant Democrats insisted today that they would be able to push through the most sweeping new controls on financial institutions since the Great Depression, following a Senate setback.
The Senate, in a 57-41 vote last night, failed to get the 60 supporters needed for the regulatory overhaul. One Democrat, Senator Ben Nelson, joined with the Republicans.
But the vote was just part of a legislative ballet keeping cross-party talks alive and at the end, Senate majority leader Harry Reid switched his vote to "No" too - but that was just a manoeuvre that will enable him to call for a new tally as early as today.
Democrats believe that public pressure and the scent of a Wall Street scandal have given them the upper hand. Republicans themselves have taken up the Democrats' Wall Street-bashing rhetoric and have voiced hope that a bill will ultimately pass.
In that light, the path to final approval seems clearer than it ever did during the contentious debate over health care.
The financial overhaul bill is a priority of President Barack Obama and, after health care, its passage would build on his legislative successes - an important political consideration in an election year. The House of Representatives has already passed its version of new bank regulations.
Less than an hour before the scheduled vote, the White House issued its official endorsement of the bill, saying Mr Obama would oppose adding any loopholes.
Following the vote, the president said he was "deeply disappointed" and urged senators to put the interests of the country ahead of party.
"Some of these senators may believe that this obstruction is a good political strategy, and others may see delay as an opportunity to take this debate behind closed doors, where financial industry lobbyists can water down reform or kill it altogether," Mr Obama said.
"But the American people can't afford that."
Both the House and Senate bills, aimed at heading off any recurrence of the near collapse of the financial system in 2008, would create a mechanism for liquidating large firms that get into trouble, set up a council to detect systemwide financial threats and establish a consumer protection agency to police lending.
The legislation would also require investment derivatives, blamed for helping precipitate the near-meltdown, to be traded in open exchanges.
Senate Republicans have been solidly opposed to the legislation so far, but Democrats are determined to force them to block the bill time and again until their unity cracks.
"I don't think it's a tenable political position for the Republicans to be in," White House spokesman Robert Gibbs said.
And a mocking Mr Reid said: "As far as I can tell, the only thing Republicans stand for is standing together."
Richard Shelby, the top Republican on the Banking Committee, said before the vote, "Most Republicans want a bill, but they want a substantive bill."Reuse content