The Senate has rejected a Democratic effort to extend the government's ability to borrow money through next year.
Before the vote, Republican senators said Majority Leader Harry Reid and Minority Leader Mitch McConnell have begun negotiations aimed at extending the country's borrowing limit and ending the 12-day-old government shutdown.
It was a near party-line vote — 53-45 — that derailed the Democratic measure. The 53 votes were seven short of the 60 required to overcome Republican objections to considering the measure.
Earlier in the day, House Speaker John Boehner told fellow Republicans that his talks with President Barack Obama have stalled.
The administration has warned it will deplete its borrowing authority by Oct. 17, risking a damaging federal default, unless Congress acts.