In a blow to President Barack Obama, the US Senate effectively killed a jobs bill at the heart of his efforts to turn the sour economy around in the run up to the November 2012 elections.
Lawmakers voted 50-49 to advance the $447 billion dollar plan, falling short of the 60 senators needed to do so, in the face of fierce opposition from Republicans eager to deny the president a second term.
"Tonight's vote is by no means the end of this fight," Obama said in a statement released before the vote was over but after its outcome was unmistakable, vowing to move his plan piecemeal "as soon as possible."
And he vowed to pile political pressure on Republicans in a series of votes aimed at forcing them to oppose funds aimed at helping middle class families and block tax hikes on the very richest Americans to pay for the plan.
"With so many Americans out of work and so many families struggling, we can't take 'no' for an answer. Ultimately, the American people won't take 'no' for an answer," said the embattled president.
The bare majority vote inflated Senate support for the measure, as some Democrats who backed ending debate on the legislation had said they would oppose its final passage, a point that led Republicans to crow that a bipartisan majority was rejecting the bill.
Two Democrats broke ranks to oppose the blueprint, while one Republican did not vote, while Democratic Senate Majority leader Harry Reid also voted against the measure in a parliamentary manoeuvre that allows him to bring up the measure again at any time.
Obama has spent weeks demanding that Congress pass a full version of a bill designed to boost growth, cut the unemployment rate of 9.1% and shield the fragile US recovery from the threat of European debt contagion.
But given staunch Republican opposition, it was never likely the entire package would emerge in one piece from a congressional showdown.
Instead, the stage was set for a new round of grandstanding and political brinkmanship, unlikely to improve the disconsolate public's contempt for Washington, but which holds heavy implications for Obama's reelection bid.
In an unusually partisan attack on Republicans, US treasury secretary Timothy Geithner warned that they risked helping to tip the country into recession by rejecting the White House's approach.