In a blow to President Barack Obama and his fellow Democrats, Republicans blocked a bill on Tuesday to require an unprecedented level of public disclosure of who pays for political campaign advertising.
On a Senate vote of 57-41, Democrats fell short of the needed 60 to clear a procedural hurdle Republicans set up against The Disclose Act, likely killing the measure for the year.
"This bill represents another attempt by my colleagues to rush through legislation that restricts freedom and creates more federal regulation," said Senator John Cornyn, who heads Republican efforts to pickup seats in the Democratic-led chamber in the November election.
Rejection of the measure comes a week after a potentially fatal setback to Obama's push to curb greenhouse gas emissions. Short on votes, Senate Democrats indefinitely postponed their bid to pass broad legislation to combat climate change.
With Obama's support, Democrats crafted the campaign finance bill in response to a Supreme Court decision in January that overturned federal and state limits on independent expenditures by corporations to support or oppose candidates.
The Democratic-backed bill would require corporate as well as union and advocacy group leaders to disclose their names in campaign ads rather than allow so-called front groups to take responsibility for the political advertising.
Assistant Senate Democratic Leader Dick Durbin pointedly noted that many Republicans had earlier favored more disclosure.
But this year, Durbin said, "They're betting that most of these ads are going to be on behalf of their candidates and against Democrats. That's what it comes down to."
Senate Republican Leader Mitch McConnell said: "The DISCLOSE Act seeks to protect unpopular Democrat politicians by silencing their critics."
President Barack Obama and others warned that the court's 5-4 ruling would unleash a flood of money from the traditionally pro-Republican business community either for or against candidates in November's congressional election and in the 2012 presidential contest.
Republicans are expected to gain seats in the Senate and perhaps takeover the House of Representatives in November.
"Voters will be left clueless as to who is funding the 'independent' TV ads promoting and attacking candidates and how much these secretive funders are paying for these ads," Public Citizen's Craig Holman said. The non-partisan advocacy group urged the Senate to reconsider the bill after the August recess.
The measure would also ban election spending by companies with more than 20 percent foreign ownership and recipients of U.S. bank bailouts.
The House of Representatives narrowly approved such a measure in June. Senate Democrats made minor changes in a failed bid to hit the needed 60 votes.
House Democrats provided a limited exemption to a handful of groups, including the 4 million-member National Rifle Association, one of the most influential lobbying organizations on Capitol Hill.
The exemption drew criticism from conservatives and liberals. But many campaign finance reform organizations said it was acceptable move to obtain needed change.
Polls show broad public support for the aim of the bill to provide greater disclosure of donors to campaigns. But Republicans dismiss such surveys, saying they were conducted before Democrats drafted their bill behind closed doors.