WASHINGTON ... Senate Republicans united Monday to block debate on legislation that would

make the most far-reaching changes in regulation of the financial industry since the Great

Depression ... slowing but probably not stopping a bill that has been propelled by angry voters

who want to crack down on Wall Street.

The 57-41 vote marked the first Senate showdown over the issue. No Republicans voted for

the motion to begin debate on the bill; 60 votes were needed to end GOP delaying tactics and

move the issue to the Senate floor. Sen. Ben Nelson of Nebraska, a Democrat, joined in the

opposition.

But the impasse may be short-lived because behind-the-scenes negotiations among Democrats

and Republicans are aiming to craft a compromise that could win back Nelson and win some GOP

converts ... perhaps by the end of the week.

Monday's vote was largely political theater. Democrats believe that the GOP will end up

looking like obstructionist friends of Wall Street. Republicans welcomed the chance to present

themselves as preventing hasty action and holding out for better protection of taxpayers

against the excesses of high-flying financiers.

"A party that stands with Wall Street is a party that stands against families and fairness," said Senate Majority Leader Harry Reid, D-Nev., who switched his vote to "no" at the last minute in a parliamentary maneuver to enable Democrats to bring the issue up again ... perhaps as early as todaytue in an effort to keep pressure on

Republicans.

Senate Minority Leader Mitch McConnell, R-Ky., said the GOP was opposing the motion to

begin debate because it believed that the Democrats' plan did not do enough to ensure that the

government would not again foot the bill for bailing out institutions deemed "too big to

fail."

A vote to block the bill from coming to the floor is "a vote for bipartisanship, for

working out an ironclad solution to the problem of too big to fail," McConnell said.

President Obama issued a statement saying he was "deeply disappointed" that Republicans

blocked the bill. "Some of these senators may believe that this obstruction is a good

political strategy, and others may see delay as an opportunity to take this debate behind

closed doors, where financial industry lobbyists can water down reform or kill it altogether,"

he said. "But the American people can't afford that."

The push for overhauling the financial regulatory system ... like the health care battle

before it ... represents a landmark domestic policy initiative by the president and his

Democratic allies in Congress. And it may be their last chance for a major victory before this

fall's contentious midterm elections.

Sweeping proposals on immigration, energy and climate change policy are waiting in the

wings, and Democrats are looking for ways to press those issues ... if only to inspire their

grass-roots supporters for the midterm campaign. But Democratic leaders acknowledge that they

will be hard-pressed to push those initiatives all the way through Congress.

Part of the problem is a limitation on the Senate's time: Confirming a Supreme Court

nominee and dealing with the budget may occupy most of the months remaining after financial

regulation is finished.

What is more, energy and immigration policies tend to divide Democrats and for some seem

politically risky propositions.

In taking on Wall Street, Democrats are emboldened by recent polls showing that fully

two-thirds of Americans favor their legislation ... a populist fire fanned by recent fraud lawsuit that the Securities and Exchange Commission filed against Goldman Sachs.

Those charges will come under klieg lights Tuesday when a Senate subcommittee hearing on

the financial crisis will call Goldman executives to the witness stand.

The financial regulation bill, a version of which has been approved by the House, would

place new restrictions on financial institutions and on transactions that have been largely

unregulated, establish a new consumer-protection agency within the Federal Reserve and give

the government new power to oversee the dissolution of large failing institutions without

taxpayer bailouts.

Republicans, wary of defending an unpopular industry, say they are trying to improve the

legislation, not stop it.

Their principal aims, they say, are to close loopholes they believe will allow government

bailouts of failing firms, add restrictions on the mortgage giants Fannie Mae and Freddie Mac,

limit the power of the consumer agency, and ease proposed regulations on derivatives ... complex

financial instruments that contributed to the 2008 financial collapse.

Despite the prospect of a bipartisan agreement, Reid pushed for Monday's showdown vote to

step up pressure on the GOP and make it easier to portray them in a politically unfavorable

light. Jim Manley, Reid's spokesman, said he also took a lesson from the bruising health care

debate that a GOP clamor for bipartisan agreement may end up being just a delaying tactic.

But with the first showdown behind them, Democrats are divided over just how hard a bargain

to drive in negotiations with the GOP.

Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., and other Banking Committee

Democrats who have been working for months to write a compromise say they are eager to

actually enact a bill, not just score political points.

"I don't think it serves us well to be screaming at each other about who cares about this

issue the most," Dodd said during Monday's debate.

Dodd and Obama administration officials have said they would drop or revise a provision

setting up a $50 billion fund, financed by bank fees, for the government to oversee the

orderly dissolution of troubled financial firms. Republicans argue that the fund and other

provisions of the bill leave the door open to future bailouts.

But other Democrats are less willing to make major concessions to the GOP, and complain

instead that the bill is already too watered down.

Sen. Bernie Sanders, I-Vt., and other liberals wants to offer amendments that would impose

stricter limits on how big banks could get.

Sen. Russell D. Feingold, D-Wis., said he would oppose any bipartisan deal that "puts the

fix in for some negotiated final product."

"Congress' recent history on regulating the financial sector," he said, "is not a proud

one."