Legislation sponsored by Finance Committee Chairman Max Baucus (D-Mont.) came up short because of Republican support for a competing bill offered by Finance Committee ranking member Chuck Grassley (R-Iowa) and by key absences from the Democratic caucus. The cloture motion to proceed with debate failed 54-39.

The $20 billion, five-year Baucus bill would have prevented the cut, set to take effect July 1 without congressional intervention, and replace it with a modest increase. Physician groups say the cut would cripple their business and threaten Medicare beneficiaries’ access to medical services.

“In sum, time is running short. We need to complete a bill by June 30,” Baucus said prior to the vote. “The options before us are few, and fraught with pitfalls. By far, the best option for getting a Medicare bill done this year is the bill on which we will vote today,” he said.

Democratic leaders accused Republicans of “obstructionism” for opposing cloture on the Medicare bill, which they likened to a filibuster.

However, Democrats held the vote despite a looming veto threat and little chance of winning over enough Republicans to succeed, prompting criticism from Republicans who described the debate as mere political theater.

“Unfortunately, instead of choosing a bipartisan path, Democrats have once again chosen to play partisan politics by objecting to moving forward with Sen. Grassley’s alternative, insisting instead on voting on a bill which will never become law,” Minority Leader Mitch McConnell (R-Ky.) said.

“Now that this political exercise is complete, we should return to the negotiating table,” he said.

Baucus’s desire to cut funding for private health plans participating in the Medicare Advantage program is the primary source of disagreement and the main reason for the Bush administration’s veto threat. The Democratic bill would offset most of the cost of the legislation by cutting Medicare Advantage spending by $14 billion over five years.

“We all know what this vote was about, and it wasn’t about what’s best for American seniors,” Baucus said after the vote. “The White House doesn’t want overpaid private plans in Medicare to lose a single dime.”

Grassley’s alternative bill would use the same mechanism to address physician payments. Grassley’s bill, he says, does not face a veto threat as Baucus’s does and takes far less money from Medicare Advantage.

Every Democrat present voted for cloture, except for Majority Leader Harry Reid (Nev.), who voted against it for procedural reasons. Eight Republicans joined the majority. Five Democrats were absent, including presidential candidate Sen. Barack Obama (Ill.), former presidential hopeful Sen. Hillary Rodham Clinton (N.Y.) and ailing Sen. Edward Kennedy (Mass.). Republican presidential candidate Sen. John McCain (Ariz.) also did not vote.