The temporary spending bill fell 45-55, well short of the 60 votes needed to advance in the chamber yesterday.
The fiscal year ends on September 30. Should Congress fail to pass a bill approving federal spending - or in this case, extending existing spending levels until December 9 - by midnight Friday, some government offices and operations could shutter.
The budget debate revolves around disputes over how to fund the ongoing water crisis in Flint, Michigan, where thousands of residents are grappling with lead-contaminated water.
Senate Majority Leader Mitch McConnell, a Republican, hinted that leaders could refile the bill with the Louisiana aid stripped out reportedly as early as late Tuesday.
"We keep hearing that their position is no Flint/no floods," he told reporters. "And that's certainly an option worth discussing."
Flint funding has already passed the Senate in another piece of legislation. But the House version of that bill contains no money for the beleaguered Michigan city, raising concerns among Democrats that aid for Flint could be further delayed.
With Republicans in control of both the Senate and House of Representatives, a government shutdown could dent the party's image just as Americans prepare to choose between Democrat Hillary Clinton and Republican Donald Trump in the November 8 presidential election.
"Basically, they want to show that we can't make this place work," Republican Senator John Cornyn said of Democrats.
The bill also contains USD 1.1 billion in emergency funding to combat the Zika virus, a provision Congress has now shot down four times.
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