(AP Photo/Harry Hamburg)
In a tit-for-tat battle, the Senate used a near party-line vote of 59-36 to derail the measure passed earlier by the Republican-run House. That bill would fund federal agencies and provide $3.7 billion in disaster assistance, partly paying for that aid with cuts in two Energy Department loan programs that finance technological development.
With the support of 10 GOP senators, the Senate had voted last week to provide $6.9 billion in disaster aid and no cuts to help pay for it.
Senate Majority Leader Harry Reid, D-Nev., offered a compromise Friday that would accept the House's lower level of disaster spending but lacked the loan program cuts. Republicans refused to let the chamber approve it, but the Senate will consider it Monday, when Republicans seem likely to prevent Democrats from getting the 60 votes they would need to prevail.
The dispute pitted GOP objections that the disaster spending would worsen the government's budget problems unless savings were included against Democratic complaints that cutting the energy loan programs would stifle the economy and cost jobs.
The fresh round of brinksmanship came with lawmakers facing two deadlines. The Federal Emergency Management Agency's fund for disaster victims could run out of money early next week, even as claims from Hurricane Irene and other recent disasters continue to accumulate. And Congress has completed none of the 12 annual spending bills for the federal fiscal year that begins Oct. 1, meaning agencies would have to close their doors that day without fresh funding.
"We've agreed to their number on FEMA," Reid said. "I mean, do they want the government to shut down? Do they want FEMA to close?"
Senate Minority Leader Mitch McConnell, R-Ky., said Democrats want to continue the Washington custom of financing emergency spending by adding to colossal federal deficits.
"If there's any lesson we can draw from the debates we've been having here over the last six months, it's that the American people won't accept that excuse anymore," McConnell said. "The whole, 'that's the way we've always done it' argument is the reason we've got a $14 trillion dollar debt right now."
Besides its emergency aid, the measure the House passed early Friday would temporarily prevent a federal shutdown by financing government agencies from the Oct. 1 start of the new fiscal year through Nov. 18. It was approved by a near party-line 219-203 vote.
White House spokesman Jay Carney faulted House Republicans for the deadlock, saying they had passed legislation knowing it would die in the Senate, just as they had during last month's fight over extending the federal debt limit.
"The fever hasn't broken -- the behavior that we saw this summer that really repelled Americans continues," Carney said.
Republicans blamed Democrats, saying the House-passed bill had enough money for the Federal Emergency Management Agency and that Democratic opposition to it was all about politics.
"The American people are sick and tired of political games," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "Shutting down the government and cutting off essential programs that our people rely on is bad enough, but leaving disaster-stricken families and communities in the lurch in their hour of greatest need is simply reprehensible."
It was unclear how the standoff would be resolved. The House and Senate had both planned to take next week off, but neither seemed likely to risk accusations of ignoring the thousands of Americans victimized by natural calamities or of allowing the government to shut its doors.
House passage represented a reversal from an embarrassing setback the chamber dealt its Republican leaders on Wednesday. On that day, the House rejected a nearly identical measure, shot down by Democrats complaining its disaster aid was too stingy and conservative Republicans upset that its overall spending was too extravagant.
The bill the House approved Friday morning contained just one change -- an additional $100 million in savings from cutting a second Energy Department loan program, this one aimed at sparking new energy technologies.
That is the same program that financed a $528 million federal loan to Solyndra Inc., the California solar panel maker that won praise from President Barack Obama but has since gone bankrupt and laid off its 1,100 workers. The Obama administration had praised Solyndra as a model for green energy companies, but now Congress is investigating the circumstances under which the government approved the loan.
The gridlock over the spending bill was the third time this year the two parties have clashed over legislation whose passage both sides considered crucial.
In April with just hours to spare, the two sides reached agreement on a bill that averted a federal shutdown and provided money for government agencies through September. Then this summer, they battled for weeks before finally approving legislation extending the government's borrowing authority and narrowly preventing a historic federal default.
Against a backdrop of the 2012 presidential and congressional elections and angst over the country's dismal job market, this year's clashes have been intensified by the infusion of dozens of tea party Republicans who often show little inclination to compromise.
Wednesday's defeat of the spending bill was only the most recent time they have made life difficult for House Speaker John Boehner, R-Ohio. And it underscored the challenges ahead this fall as Congress tackles efforts to fix the economy, create jobs and try to control the $14 trillion national debt.
Associated Press writer Laurie Kellman contributed to this report.