While leaders of both parties insist they want to keep the federally backed rate at 3.4% for another year, they sharply disagree over how to pay the $6 billion tab necessary to do so. Senate Democrats want to eliminate certain tax benefits for small business owners, while Senate Republicans want to cut a preventive-care fund created in 2010 as part of President Barack Obama's health care reform law.
Senators rejected the Democratic plan in a 51-43 vote; they rejected the GOP proposal in a 34-62 vote. Sixty votes were necessary to win Senate approval.
While neither measure was expected to pass, leaders on both sides of the aisle wanted the opportunity to vote for their plan instead of merely voicing opposition to the other party's proposal.
Before the vote, Senate Democrats accused their Republican counterparts of unnecessarily pitting educational needs against health care priorities.
House Republicans recently passed an identical version of the bill pushed by their Senate GOP colleagues. Obama has vowed to veto the measure if it ever reaches his desk.
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