The House failed Tuesday afternoon to pass an unemployment benefits extension under suspension of the rules. 

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Democrats are looking to use unused money from the $700 billion financial bailout to pay for a Wall Street overhaul package.

The new move, confirmed by a Democratic aide, comes after Republicans objected to $19 billion in new fees originally used to pay for the bill.

House and Senate lawmakers agreed to the fees as part of the conference agreement last week on the 2,000-page bill.

Sen. Scott Brown (R-Mass.), a key vote to help pass the bill, said Tuesday he would oppose the bill with the fees falling on large banks, hedge funds and other firms. Maine Republican Sens. Susan Collins and Olympia Snowe voiced similar concerns about the fees.

The objections led Senate Democrats scrambling for a way to pass the bill.

The conference is expected to reconvene at 5 p.m. Democrats plan to propose the bailout package be shut down and any unused money be used to offset the overhaul bill, according to the aide.

"Taxpayers will never again be on the hook for paying for the costs of any future bank failures," the aide said.

The Senate on Tuesday voted 66-33 to advance the debate on legislation providing tax relief and loan assistance to small businesses. 

The bill considered was a measure that recently passed the House, but it will be replaced by legislation produced by Senate Finance Chairman Max Baucus (D-Mont.) and Senate Small Business Chairwoman Mary Landrieu (D-La.). 

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Like the House bill, the Senate proposal exempts smaller C corporations from paying capital gains taxes on stock. It also extends loan opportunities from the Small Business Administration. Specifics on the bill have yet to be released. 

Senate Democratic leaders originally hoped to complete the bill before adjourning for the July 4th recess. But funeral activities for Sen. Robert Byrd (D-W.Va.) will probably postpone final action on the legislation until lawmakers return from the break. 

"With Senator Byrd's passing, I'm not sure that [passage before July 4] is going to happen," Landrieu told The Hill. 

Consumer confidence declined sharply in June after three straight months of improvement as worries heightened over the slowly recovering economy and sluggish job market.

The index fell to 52.9 this month from a revised 62.7 in May, a drop that was greater than expected by analysts, according to the Conference Board’s index. 

Despite signs of an expanding economy, consumer confidence isn't likely to improve until job growth picks up. The June employment report is due out Friday, and is likely to show a decrease in job growth as the federal government winds down temporary hiring for the Census.

Private sector hiring needs to show improvement to begin making a dent in the more than 8 million jobs lost during the protracted recession. 

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Senate Small Business Chairwoman Mary Landrieu (D-La.) on Tuesday told The Hill she supports temporarily moving off her small-business bill to extend unemployment insurance. 

"Table is a strong word, but pausing to get that other work done — we've got to do a lot of different things at one time around here," she said. 

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Landrieu also blasted Republican opposition to the extension. 

Not a single Republican senator so far has supported the three proposals offered by Senate Majority Leader Harry Reid (D-Nev.) to extend unemployment benefits that expired earlier this month. 

"How that party can stand year after year supporting unpaid wars in Iraq and Afghanistan, but they won't support emergencies here at home is really beyond my comprehension," she said, adding, "It [extending unemployment] is an emergency. If 15 million people out of work is not an emergency, I don't know what is." 

The House is slated to vote later Tuesday on another extension to unemployment. The vote will allow the benefits to continue through November. However, the package excludes the $25 pay bump created by the stimulus bill and it is not offset. 

House leaders hope the stand-alone bill will find sufficient support in the Senate and pass from that chamber before the July 4 recess.  

The last three attempts have failed to pass the Senate largely because Republicans there have refused an extension that is not paid for, and therefore adds to the deficit.

Sen. Olympia Snowe (R-Maine) last week signaled that she would support an extension that is not paid for. But Senate Democratic leaders will still need at least two additional Republicans to vote for the measure if Sen. Ben Nelson (D-Neb.) continues to oppose the bill because its cost is not offset. 

A Republican staffers thinks Reid will have a hard time winning over two Republicans beyond Snowe to support the bill. 

House Democratic leaders plan to call votes this week on a spending bill that has about $33 billion for the Afghanistan and Iraq wars and $10 billion to help states and local governments avoid teacher layoffs.

House Majority Steny Hoyer (D-Md.) said votes on the war money and domestic spending would be separate and would happen by Friday. Democrats are hoping Republicans would back the war money, which has been greeted with heavy doses of skepticism from liberal Democrats.

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The House will vote again on Tuesday to extend unemployment benefits.

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The Securities and Exchange Commission has agreed to pay $755,000 to former SEC attorney Gary Aguirre to settle a wrongful termination claim.

The SEC would not confirm the settlement, but Aguirre corroborated the settlement figure. 

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Two House lawmakers are pushing forward this week to pass a standalone extension of unemployment insurance as more than 1.2 million stand to lose their benefits within a couple of days.

House Ways and Means Committee Chairman Sandy Levin (D-Mich.) and Rep. Jim McDermott (D-Wash.), chairman of the Ways and Means Subcommittee on Income Security and Family Support, have teamed up to introduce a measure they aim to pass before the July 4 recess.

House Majority Leader Steny Hoyer (D-Md.) said the bill could hit the floor Tuesday or Wednesday. He didn't provide any bill details although they are expected soon. 

A tax extenders bill that included a six-month extension of unemployment benefits has stalled out in the Senate because of Republican concerns over adding to the debt and issues over tax provisions in the bill.

At least two senators — Olympia Snowe (R-Maine) and Debbie Stabenow (D-Mich.) — have introduced standalone versions of the measure as benefits gradually begin running out for millions of Americans. It's unknown whether the Senate would consider the measures or take up the House bill, which could allow enough time to complete the work before the weekend.

Under the extension, unemployed workers can receive up to 99 weeks of benefits based on the state's unemployment rate. Every state is affected if Congress can't resolve the issue before recess begins. If a measure isn't passed, lawmakers wouldn't take it up again until at least July 12, when they return from the weeklong break.

This story was updated at 11:45 a.m.