An emergency effort to send billions of dollars in aid to the ailing American carmakers fizzled on Wednesday, as Senate Democrats failed to strike a compromise with Republicans and the White House.

Republicans blocked efforts by Senate Majority Leader Harry Reid (D-Nev.) to call up a Democratic proposal, with several Senate GOP leaders saying they would prefer letting the Big Three go bankrupt.

Democrats had tried to carve out $25 billion from the $700 billion Wall Street bailout for Chrysler, General Motors and Ford, while President Bush and a handful of GOP senators wanted the money to come from elsewhere.

Hours after the White House pointed his way, Reid blamed Bush.

“As we have said all along, the Treasury already has the authority and resources to protect thousands of Americans who work in our nation’s struggling auto industry,” Reid said in statement released Wednesday evening. “If the Bush administration has any interest in saving Detroit, it has the power to do so.”

Several Republican senators said they do not see a last-minute compromise on the horizon.

“I don’t think anything’s going to happen,” said John Ensign, the incoming GOP Policy Committee chairman, who is among those who feels the automakers would be better off filing Chapter 11.

The impending decision to give up came hours after the chief executive for General Motors told a House panel that a bankruptcy would translate into “liquidating the company, very simply.”

Wall Street responded in kind. The Dow Jones Industrial Average plunged nearly 430 points to close below the 8,000 mark, its lowest point in five years.

Sen. John Thune (R-S.D.), the incoming GOP vice chairman of the conference, said most in the party believe that without bankruptcy, the industry won’t make necessary changes and Congress will be forced to respond again with more money. Bankruptcy, on the other hand, could actually strengthen the industry for the long term.

“Chapter 11 forces these companies to make changes, which we’re concerned they wouldn’t make if you just throw government money at them and they could keep doing what they’re doing. It just delays the inevitable,” Thune said.

Such opposition put Sen. Mitch McConnell (R-Ky.) in a bind. The minority leader, who survived a bruising reelection battle this month, represents a state that depends on auto manufacturing.

A compromise backed by the White House and pushed by Republicans Kit Bond of Missouri and George Voinovich of Ohio proposes to lift restrictions on $25 billion in loans approved by Congress specifically to help automakers retool plants to make more fuel-efficient cars.

In morning floor comments, McConnell noted the millions of jobs tied to the auto industry across the country and in his state.

“Should this compromise approach be approved by the Congress, it is the only proposal now being considered that has a chance of actually becoming law,” McConnell said.

Earlier in the day, White House press secretary Dana Perino had told reporters that the administration was “extremely concerned” that Reid would be unlikely to allow a vote on the Bond-Voinovich proposal, and said if lawmakers leave without helping the industry, Democrats would clearly be responsible.

Democrats are equally divided on the issue, with Sen. Carl Levin (Mich.), who is leading negotiations and represents the state where the automakers are based, urging his colleagues to consider accepting a deal.