Fifty-nine senators voted in favor of measure to bring back the program, just short of 60 needed to defeat a filibuster

Nearly two million out-of-work Americans saw their hope of having their benefits restored fall just one vote short on Thursday, as a last-ditch effort to extend an emergency program for the long-term unemployed narrowly failed to move forward in the Senate.

The federal program, which was introduced after the banking crash to help unemployed workers once their state benefits expired, itself ran out in December after Republicans insisted that new measures should be found to pay for it.

Payments were halted for 1.7m existing recipients in the New Year. Each week, there are over 60,000 more people who otherwise would have been eligible for the benefit, but now can not recieve it.

Thursday’s vote was a final attempt to fund a temporary three-month extension and retroactive payments by introducing technical tweaks to the budget, but it failed to clear a key procedural hurdle in the US Senate.

The so-called cloture motion on a funding amendment proposed by Rhode Island Democrat Jack Reed was supported by 59 of the 60 senators needed to end a filibuster and move to a simple majority vote. (Senate majority leader Harry Reid supported the measure, but changed his vote to “nay” in a tactical move that preserves his right to reintroduce legislation at a later stage.)

Four moderate Republicans – Kelly Ayotte of New Hampshire, Susan Collins of Maine, Lisa Murkowski of Alaska and Dean Heller of Nevada – joined Democrats in voting to pursue the amendment, which would allow passage of an extension bill that was originally co-sponsored by Heller.

“There is one Republican vote standing between 1.7m Americans and the lifeline they need to make ends meet,” said Reid, who insisted he would seek fresh negotiations with Heller to see if there is any other way of passing the measure.

The Senate setback is another blow for president Barack Obama’s commitment to making 2014 a year of action on poverty and inequality.

Since making the issue his No 1 policy priority during last week’s state of the union address, the president has already had to accept a farm bill from Congress that will cut $8bn from the federal food stamps program for low income families.

However, both parties are increasingly focused on forthcoming midterm elections and are deeply polarised on issues like unemployment insurance and immigration reform that briefly looked like possible areas of bipartisan compromise following a broader budget agreement in December.

The White House immediately criticised Republicans in Congress for blocking the extension of unemployment insurance, which was reauthorised eight times by bipartisan lawmakers during similar periods of high unemployment under presidents George Bush Sr and Ronald Reagan.

“It is disappointing that Republicans in the Senate chose to again deny emergency unemployment insurance for 1.7 million Americans who need this vital lifeline to support their families as they actively search each and every day for a job,” said spokesman Jay Carney in a statement.

“As the president said during the state of the union, we need to give these hardworking, responsible Americans a chance. We cannot allow one vote to stand in the way of supporting these Americans as they struggle to find work. Both sides of the aisle have worked together to prevent this kind of hardship in the past, and neglecting to do so now is unacceptable – especially given the high long-term unemployment rate.”

Some Republicans, such as Senator Rand Paul, have argued that unemployment benefits act as a deterrent for people to find work, and most Republicans believe a better solution is to promote job creation by cutting the deficit and reducing taxes.

Opponents on the right have also accused the Democrats of using an “accounting trick” in their proposal to fund the increase.

The “trick,” known as “pension smoothing,” allows companies to make smaller contributions to their pension funds by changing the way future liabilities are assessed and is meant to increase the government’s tax receipts by giving a boost to taxable income.

This measure was previously used to fund a budget gap in a transportation bill, but is very different from the entitlement cuts that Republicans would prefer, and could make pension funds more vulnerable to future shortfalls according to some economists.