The Senate fell three votes short of the 60-vote threshold
57-42 to move ahead on the amendment sponsored by freshman Republican Sen. Tom Cotton of Arkansas.
Cotton's proposed provision would have barred the United States from using taxpayer dollars to buy any more Iranian "heavy water." The proposal had triggered a war of words with the White House.
Heavy water is not radioactive but has research and medical applications and can also be used to produce weapons-grade plutonium. Under the nuclear deal, Iran is allowed to use heavy water in its modified Arak nuclear reactor, but must sell any excess supply of both heavy water and enriched uranium on the international market.
There are no current plans for further U.S. Purchases, but Cotton has been a vocal opponent of the nuclear agreement and said he wanted to hold the administration to its promise. Democrats called Cotton's amendment a "poison pill" that would have drawn a certain veto from President Barack Obama.
The dispute had delayed passage of the energy and water bill, the first of the 12 spending bills in the Senate.
Cotton last year antagonized the White House by leading a letter signed by many Senate Republicans that told Iranian leaders the nuclear deal approved by Obama could be undone by his successor.
Cotton responded on Twitter: "You're right, I don't know much about sparkling water. It isn't served in Army, unlike in your ritzy West Wing."
Cotton served on active duty in Iraq and Afghanistan before being elected to Congress.
Sen. Lamar Alexander, R-Tenn., chairman of the Senate Appropriations energy and water development subcommittee, defended Cotton's right to offer the amendment, but expressed concerns that Iran might sell its heavy water to a country hostile to the United States, such as North Korea, which could use it to develop nuclear weapons.
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