The Senate voted 51-46, along strict party-lines, on Friday to kill the House Republicans' "cut, cap and balance" legislation.
The measure would have cut spending by $111 billion in 2012, capped spending over the next decade and prohibited more borrowing until Congress had passed a balanced-budget amendment to the Constitution.
President Obama had threatened to veto the bill, which was dead on arrival in the Senate.
Senate Majority Leader Harry ReidHarry Mason ReidTo Build Back Better, we need a tax system where everyone pays their fair share Democrats say Biden must get more involved in budget fight Biden looks to climate to sell economic agenda MORE (D-Nev.) called the legislation "very, very bad" and said it was a waste of the upper chamber's time.
Moving the measure through the House and holding a vote in the Senate, however, was seen as a way of making progress toward an overall deal to raise the $14.3 trillion debt ceiling and approve a deficit-reduction package.
About a dozen freshman Republican House members stood on the Senate floor during much of the vote to observe the proceedings.
President Obama and Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio) are working on a package of reportedly $3 trillion in deficit cuts. Both sides denied they are close to a deal after Senate Democrats erupted in fury Thursday that Obama was close to signing off on a package that would put off significant tax cuts while imposing large spending cuts and entitlement reforms.
During the debate on "cut, cap and balance," Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellWe don't need platinum to solve the debt ceiling crisis The Hill's Morning Report - Presented by Alibaba - Democrats argue price before policy amid scramble House passes standalone bill to provide B for Israel's Iron Dome MORE (R-Ky.) argued the GOP plan would solve the nation's deficit crisis if Democrats would join Republicans in supporting it.
"This isn't rocket science," said McConnell. "We could solve this problem this morning if Democrats would … join us in backing this legislation that Republicans support."
The bill was passed in the House Tuesday evening in a 234-190 vote on party lines. Five House Democrats supported it, while nine House Republicans voted against it.
Friday morning, BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE urged the Senate to pass the legislation, writing on his Facebook page: "Media accounts are speculating about a 'deal' between Republicans and the White House that does not exist. What does exist is the Cut, Cap, & Balance Act, approved by the House with bipartisan support and the support of the American people. The Senate should do its job, listen to the people, and pass it today."
Reid said he wanted to get the legislation out of the Senate as swiftly as possible because it was impeding talks between the White House and Congress on more centrist compromise proposals.
Democrats feared that many Republicans would shy away from embracing any middle-of-the-road compromises while the House Republicans’ alternative was still perceived by the public as viable.