Updated: 6:24 p.m.

Senate Democrats failed Monday night to clear a key procedural hurdle to begin debate on a sweeping financial reform bill, falling two votes shy of the 60 they needed to bring the measure to the floor.

The near party-line vote seemed predetermined before the bells rang at 5 p.m., and despite the defeat, Members from both sides reiterated their hope to reach an agreement on how best to regulate the financial industry soon.

“Obviously, we’re not all there,” Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) said just before the vote.

No Republicans voted for the motion to move to the bill, which failed, 57-41. Sen. Ben Nelson (D-Neb.) broke with his party and voted “no.” Senate Majority Leader Harry Reid (D-Nev.) voted against it only for procedural reasons; it will allow him to move to reconsider the vote later.

But Dodd, who has worked on the issue for months, made the case for moving to the bill on the floor to maintain pressure for the bipartisan deal that has so far eluded him.

“You can never get there in one of these debates before you actually have the opportunity to do exactly that: where Members get to be heard, to raise their ideas,” Dodd said.

Republicans also held out optimism.

“I still think there’s a very good chance for a bipartisan agreement,” Sen.
Bob Corker (R-Tenn.) said just before the vote.

Corker said he was concerned with a provision in the measure on how to regulate derivatives, the complex financial instrument that has become a major sticking point in negotiations. The provision, which Corker noted was not welcomed with fanfare by White House officials, would require commercial banks to spin off their derivatives-trading desks. Corker said he was scheduled to discuss the issue with White House economic adviser Austan Goolsbee on Monday evening.

“There’s still agreements that have to be reached on both sides,” Corker said of the continued talks, noting the ongoing buzz to announce a deal. “There’s pretty much swirl right now.”

A statement of administrative policy released just before the vote upheld both Dodd’s bill and the controversial derivatives language authored by Agriculture, Nutrition and Forestry Chairman Blanche Lincoln (D-Ark.).

Passing the bill “will move the Nation another important step towards necessary, comprehensive Wall Street reform that will create clear rules of the road and can be consistently and systematically enforced, thus creating a more stable financial system with better protection for consumers and investors,” the statement read.

Dodd was set to meet again with Banking ranking member Richard Shelby (R-Ala.) following Monday night’s vote to continue hammering a possible agreement that could be taken up by the full Senate later this week. Meanwhile, Democrats are likely to continue highlighting the issue with repeated floor statements and press conferences this week as they hope to build enough momentum behind the issue to pick off a handful of Republican votes.