Senate rejects the House stop-gap spending bill. Is a government shutdown avoidable?

[This story has been updated at 1:50 p.m. to accurately reflect late breaking developments.]

The Senate has voted to reject the temporary spending bill passed by the House late last night.

With near permanent brinksmanship the new normal, Congress headed into votes Friday to try to avert a government shutdown that is slated to occur on Oct. 1 if a continuing resolution bill is not passed.

In a surprise late night victory Thursday, House Republican leaders narrowly passed a stop-gap spending bill to fund government through Nov. 18.

As threatened, the Senate rejected the House bill on a bipartisan vote, 59 to 36. Senate leaders agreed to a vote on a Senate version of the bill on Monday – but only after a “cooling off period.”

“[Leaders] should just cool off a little bit and work through this,” said Senate majority leader Harry Reid (D) of Nevada, speaking on the floor after Friday’s midday vote.

“There is a compromise before us,” he added. “The government is not going to shut down.”

None of this was expected to be controversial. Congress last month voted on a funding level for the new fiscal year as part of a deal to raise the national debt limit. The continuing resolution (CR) that GOP leaders brought to the floor on Wednesday set a rate of spending for fiscal year 2012 consistent with that agreement.

But House Republicans opposed to the debt-ceiling deal saw the CR vote as a fresh opportunity to make a stand. Conservatives said that the $1.043 trillion spending level for fiscal year 2012 – as mandated in the debt-limit deal – was too high.

At the same time, House Democratic leaders, who had expressed support for the bill earlier this week, reversed course and called on Democrats to vote it down. Democrats opposed GOP calls for $1 billion in disaster funding for the balance of fiscal 2011 be offset by a $1.5 billion cut to a loan guarantee program for the production of fuel-efficient vehicles.

Democratic leader Nancy Pelosi dubbed the proposed cut “a job destroyer.”

After Wednesday’s defeat, Boehner warned GOP naysayers that if they didn’t support the stop-gap funding measure, he would have to reach out to Democrats – a deal sure to involve even more spending.

Then over night Thursday, the Republican's stop-gap spending bill finally passed, about 30 hours after rejecting a nearly identical version of the legislation. It passed 219 to 203.

As a sweetener to conservatives, GOP leaders added a $100 million cut to an alternative energy loan fund to the CR package. Funding for alternative energy is a signature priority of the Obama administration. It also reinforces an emerging theme in the 2012 House GOP campaign to defend its majority: White House “crony capitalism” and the waste of stimulus funding dollars.

A House Energy and Commerce subcommittee has been investigating the Energy Department and White House Office of Management and Budget over a $535 million loan guarantee to Solyndra, a solar company with close ties to the White House that went bankrupt two years after accepting the loan. Solyndra was the first loan guarantee issued by the Obama administration and often cited as a success story for the stimulus plan and green energy job creation.

"Congress and the American taxpayers have a right to know whether this loan guarantee was rushed out the door before it was ready for prime time, whether the Administration doubled down on a bad bet after knowing of the company’s dubious commercial prospects or, even worse, whether $535 million taxpayer dollars were wasted on false or incomplete information,” said Rep. Cliff Stearns (R) of Florida, who chairs the panel, in an opening statement at Friday’s oversight hearing.

At the same time, the National Republican Congressional Committee, the campaign arm of the House Republican caucus, released a statement charging that the Obama administration’s “green” regulations and billions spent on “green” programs have “destroyed jobs and wasted money.”

The Senate version of a stop-gap spending measure for fiscal year 2012 includes $6.9 billion for disaster funding, with no offsets. A similar measure passed the Senate last week with the support of 10 Republicans.