Senate Republicans filibustered an $85 billion tax cut package after Democrats refused to allow votes on their amendments.
Cloture on the tax cut measure failed 53 to 40. It needed 60 votes to advance. Illinois Senator Mark Kirk was the only Republican to vote yes.
The grab bag of more than 50 tax breaks , which expired at the end of 2013, includes breaks for research and development, mortgage forgiveness and the deductibility of state and local sales taxes.
Republicans have increasingly complained that Senate Majority Leader Harry Reid, D-Nev., has been using his authority in a dictatorial way. Senate Minority Leader Mitch McConnell, R-Ky., said Democrats had turned the Senate "literally on its head" by refusing to allow amendments, and proposed voting on all tax-related amendments to the bill.
"What are they afraid of?" McConnell asked.
Reid refused, ripping McConnell as the "guardian of gridlock."
The pair also sparred over Reid's support for a constitutional amendment restricting spending on campaigns.
"Now they want to change the Bill of Rights," McConnell said. "Apparently after a couple hundred years they've decided that Madison's work is not sufficient."
Just prior to the vote, Sen. Charles E. Grassley, R-Iowa, predicted that cloture would not be invoked on the tax extenders bill at this point because there have not been sufficient discussions about amendments.
"I don't think it'll be far enough along," Grassley said. "Cloture won't happen."
At a news conference before the vote, Reid appealed to interests who would benefit from more than 50 tax breaks in the package.
“I would hope that … the business community, who stand to benefit greatly from this extenders package, I would hope they say something to the Republican senators," he said.
Reid earlier dismissed GOP critics, saying Republicans too often seek to offer unrelated amendments.
“I’ve already said we will be allowed to have amendments but [they] have to be related to the bill … but they want to offer them on everything,” Reid said. “I think it’s just outrageous that they are going to try to kill thing on this phony issue."
The measure also has drawn criticism from the White House.
Steven T. Dennis contributed to this report.