This is the first modern government shutdown with Congress and the White House controlled by the same party, and it comes on the one-year anniversary of President Donald Trump's inauguration.
Trump's White House however immediately blamed Democrats for the shutdown.
"Tonight, they put politics above our national security, military families, vulnerable children, and our country's ability to serve all Americans," White House press secretary Sarah Sanders said in a statement moments before midnight. "We will not negotiate the status of unlawful immigrants while Democrats hold our lawful citizens hostage over their reckless demands. This is the behavior of obstructionist losers, not legislators."
Trump and his representatives had been labeling the event the "Schumer shutdown" after Senate Minority Leader Chuck Schumer, but the New York Democrat was quick to call it "the Trump shutdown."
"It's almost as if you were rooting for a shutdown," Schumer said from the Senate floor. "And now we will have one. And the blame should crash entirely on President Trump's shoulders. This will be called the Trump shutdown. This will be called the Trump shutdown because there is no one, no one, who deserves the blame for the position we find ourselves in than President Trump."
Sixty votes were needed to advance the bill to keep the government open for four weeks. Republicans only control 51 seats, so GOP leaders needed Democratic votes to cross that threshold. It failed 50-49.
Key issue is setting a date
One of the key issues Friday has been just how long to extend funding. The House passed a measure Thursday night to continue
funding the government through February 16, and that measure is the one that failed in the Senate early Saturday morning. Democrats have pushed for a shorter-term continuing resolution of a couple days. Sen. Lindsey Graham, a South Carolina Republican who said he would not vote for the House proposal, pushed a plan to keep the government open until February 8.
After the vote, McConnell said he will offer a new continuing resolution to fund the government through February 8. McConnell said he wanted to introduce it during this early morning session, but he wasn't able to for procedural reasons and it wasn't clear if that measure would have enough Democrats it to advance.
"I'll be offering an amendment to change the date to February the eighth," McConnell said around 12:30 a.m. ET. "Unfortunately we'll not be able to get that vote tonight ... And that's the date the senator from South Carolina, the senior senator from South Carolina that I've been talking about, Democratic leader and I have been talking about, which begins to move a little bit close to our friends on the other side said they wanted to be. but a reasonable period of time."
Two GOP sources say that Graham's three-week compromise idea wasn't by accident -- it is the off-ramp on the table, if Democrats are willing to take it.
"It's a live option," one of the sources said -- one Democrats have been told is an acceptable change for Republicans. The big question, the sources said, is whether it goes nearly far enough for Democrats who've listed a litany if reasons for their opposition.
Two sources say Democrats have pitched a new continuing resolution that would expire on January 29, the day before Trump's State of the Union address. Republicans are not willing to consider that, one source said.
Trump showed his support for the House plan of a four week extension just hours before that vote was scheduled.
"Excellent preliminary meeting in Oval with @SenSchumer - working on solutions for Security and our great Military together with @SenateMajLdr McConnell and @SpeakerRyan. Making progress - four week extension would be best!" Trump tweeted Friday evening
White House Budget Director Mick Mulvaney told CNN's "The Situation Room with Wolf Blitzer" that as efforts continue to reach an agreement, "we're in a weekend so we have a little more flexibility here."
House Democrats prepare for shutdown
Rep. John Yarmuth, a Kentucky Democrat, told reporters that the House Democratic leadership team concluded at their meeting Friday night there would be a government shutdown and the group expected it to last through early next week.
"I think it is almost 100% likely that the government will shut down for some period of time -- now my guess is it won't go past the first of the week -- in which the disruption won't be particularly severe," said Yarmuth, the top Democrat on the House Budget Committee.
Pelosi gave a very brief overview to the leadership team of what Schumer told her about his meeting with the President. According to Yarmuth, Schumer laid out what his priorities are and the President said he wanted the Senate to pass the House bill. Asked why the meeting lasted so long, he quipped, "Well, Trump repeats himself, that's what I understand."
Yarmuth expected the House, which was scheduled to be out of session next week, would likely come back just for a day to approve some type of stopgap bill.
"There are all sorts of things being discussed apparently, from one day to three days, to five days, to three weeks to four weeks. Four weeks being the president's position." He said Democrats would be fine with backing some type of short term continuing resolution.
Some Democratic aides for progressive members have been worried that Schumer would cut a deal and give away leverage on some of their priorities, but Yarmuth insisted that the House and Senate Democrats are "in 100% agreement on this and totally working hand in hand."
House members had been scheduled to be on recess next week, but many said they weren't going home until they knew there was resolution.
"I'm not going home if the government shuts down," said Idaho Republican Rep. Mike Simpson.
Rep. Austin Scott, a Republican from Georgia, told CNN that he was also prepared to stay, although he added "Mitch McConnell needs to stand and fight."
Details of the Schumer meeting
Earlier Friday, Trump called Schumer and invited the New York Democrat personally, a person familiar with the plans told CNN.
Trump's chief of staff John Kelly was the only White House official present at the meeting, a person familiar told CNN.
McConnell was not at the meeting, a source said, adding that he and Trump have been in touch during the day by telephone. Neither was Ryan, who was addressing the "March for Life" rally
around the same time. McConnell and Ryan were aware that the White House was going to invite Schumer to the White House, one Republican source said.
"We had a long and detailed meeting," Schumer told reporters in brief remarks he made upon returning the Capitol, but he did not include any specifics from their discussion. "We made good progress and will continue."
Schumer then met with House Minority Leader Nancy Pelosi and Senate Democratic Whip Dick Durbin in his office.
"I think the leader made a statement that progress had been made but much more needs to be done," Pelosi told CNN upon leaving Schumer's office.
"It's in the hands of the leader," Durbin told CNN.
White House aides made clear to GOP staff this morning there was no daylight between the President and Hill Republicans this morning, especially on immigration, according to two sources.
Still, some congressional leaders eyed the Schumer meeting warily.
When asked by CNN if he was worried about Trump meeting with only Schumer, Sen. John Cornyn responded, "The thought did cross my mind."
This story has been updated and will continue to update with additional developments.