WASHINGTON (CNNMoney.com) -- Senate Democrats failed to muster enough votes Monday to take up Wall Street reform, with a key Democrat voting with Republicans against the push to get the debate started.
Sen. Ben Nelson, D-Neb., voted against a proposal to officially start debating the Wall Street reform legislation before other lawmakers on a Senate Banking panel negotiate a deal.
That move made it impossible for Democrats to get 60 votes to push the legislation forward.
The official vote was 57-41 in favor of moving forward. Senate Majority Leader Harry Reid, D-Nev., switched his vote from "yes" to "no," in a procedural move that allows him, under the Senate rules, to bring the bill up again for another vote.
Reid said Tuesday he would schedule another vote for later in the day, but there was not expected to be any change in the result.
Two GOP senators, Christopher Bond of Missouri and Robert Bennett of Utah, did not vote.
Nelson told CNN that he worried about the legislation's impact on Main Street and that he didn't want to push forward a bill that isn't finalized.
"This has an awful lot of unintended consequences," Nelson said. "I don't think everyone is aware of the unintended consequences."
His vote signals that Democrats have a ways to go in negotiating a deal with Republicans before a final bill can pass.
The White House issued a statement from President Obama expressing his disappointment in the vote and urging the Senate to "get back to work and put the interests of the country ahead of the party."
Democrats and Republicans still disagree about the way to go about preventing future bailouts, cracking down on risky bets and ensuring consumers have stronger protection.
Sen. Richard Shelby, R-Ala., the ranking member on the banking panel, met again Monday with Sen. Christopher Dodd, D-Conn., who runs the banking panel. But the two remain far apart on key details, and, according to Republican congressional staff aides, their staffs have not met since Thursday to hash out differences on paper.
"My goal and Sen. Dodd's goal is to get a bill first in principle, and then there's a lot of work to be done, working together," Shelby said.
Shelby added that he'd like to get a bill completed "this week or next," or "as soon as we can." But Shelby and Dodd have been talking over many of the same issues for months.
Here are the issues still in play:
Democrats want to create a council of regulators who keep an extra eye on firms whose failure would threatens the economy. They also want to empower the Federal Deposit Insurance Corp. to step in and take down big Wall Street banks, tapping a pot of money that banks pay into.
But Republicans say that the new unwinding powers and the resolution fund will create a new implicit guarantee of future government intervention.
Shelby said on Sunday that the bill leaves too much flexibility for the Federal Reserve and the FDIC.
"We need to tighten that up to make sure that it doesn't happen," Shelby said on NBC's "Meet the Press." "The message should be unambiguously that nothing is too big to fail and if you fail, we're going to put you to sleep."
Congress wants to make bets on complex financial contracts known as derivatives more transparent, pushing them onto clearinghouses and exchanges. They also want those making bets to post collateral, backing up the bets.
On Monday, key Democrats agreed to new rules to force banks to spin off their swaps desk, or the parts that deal in making such risky bets.
However, the financial services sector says too much regulation will hurt U.S. businesses, such as airlines and farmers, who benefit from making such bets to shed the risk of swings in prices and interest rates. And they say it will push the industry to make trades overseas.
Shelby said on Monday he had heard the terms of the deal, but declined to say whether he'd support it.
Democrats want to create a new independent consumer financial protection regulator. The Senate measure houses the regulator inside the Fed but gives it strong powers to make its own rules, such as capping credit card fees and fees for paying down mortgages early. New rules can get vetoed by a council of regulators. The House bill, which passed last December, goes further with a stand-alone agency.
But Republicans think the consumer regulators' power goes too far, regulates too many financial products and could cut so deeply into banks' balance sheets, that banks could become unstable and insolvent.
Regulators are set to vote Tuesday on the so-called Volcker rule, a piece of the 2010 Dodd-Frank financial reform law intended to stop banks from taking excessive risks with federally insured deposits. More
The American Dream is supposed to mean that through hard work and perseverance, even the poorest people can make it to middle class or above. But it's actually harder to move up in America than it is in most other advanced nations. More
You have to search the fine print on Tegu's toy block set to find any hint of the company's plan to make one of Central America's poorest cities a better place. More
As usual, Congress has left all the year's major fiscal decisions to the last minute. More