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The DREAM Act allows young people to become legal U.S. residents after spending two years in college or the military. It applies to those who were under 16 when they arrived in the U.S., have been in the country at least five years and have a diploma from a U.S. high school or the equivalent.
Several young people who would have benefited from the legislation watched the vote from the gallery, some wearing graduation caps and gowns. Many sat stone-faced when the vote tally was read. A young woman dressed in a gold cap and gown wiped away tears.
Most of the young immigrants knew victory was unlikely, but in the hours before the vote they walked the hallways of a Senate office building trying to drum up support.
``I was kind of speechless. It's something that hurt, but we are not stopping. They only gave us a chance and more time to get even bigger,'' said Diana Banderas, who graduated from high school in May and plans to go to community college after earning the money she needs to attend.
Republicans accused Democrats of playing politics with the defense bill and the DREAM Act. South Carolina Republican Sen. Lindsey Graham, who has supported legislation legalizing illegal immigrants in the past, said Democrats were trying to galvanize Hispanics and energize their voters by trying to tack the DREAM Act onto the defense bill.
The bill also included a measure to repeal the military's ``don't ask, don't tell'' policy on gays.
``I don't think anyone in the country will hold it against us for voting against their way of doing business,'' Graham said.
Reid said Republicans were ``putting partisan politics ahead of the best interests of the men and women who courageously defend our nation'' by blocking the bill, which would have authorized $726 billion in defense spending, including a pay raise for troops.
Sen. Dick Durbin, the majority whip, said repealing the ``don't ask, don't tell'' policy and passing the DREAM Act were a matter of justice and fairness.
``We do not in this country hold the crimes and misdeeds of parents against their children,'' Durbin said in reference to the DREAM Act. He has been trying to pass the legislation for about a decade.
Earlier Tuesday, Education Secretary Arne Duncan said he sent a letter to Reid and Senate Republican leader Mitch McConnell backing the DREAM Act.
``America is the only country they know ... they deserve every opportunity to go further in life. Our country needs the benefits of their skills, their talent and their passion,'' Duncan said.
Congress has failed to take up a comprehensive immigration bill the past two years. President Barack Obama has been under fire in the Latino community for failing to keep his promise to tackle immigration reform in the first year of his presidency. Some have feared Latino voters will stay home in November because of the inaction.
Graham had been working with Sen. Charles Schumer to draft an immigration reform bill but dropped out of the process as he took criticism in his state. Democrats were unable to persuade any other Republicans to take his place.
In April, Obama said Congress lacked the ``appetite'' to take on immigration, essentially removing it from the legislative agenda.
As the prospects for a sweeping immigration bill looked bleak, young activists began lobbying Democrats to separate the DREAM Act from the immigration reform package and try to pass it on its own.
The students, risking deportation, protested at lawmakers' offices and tangled with immigration reform advocates who did not want the comprehensive immigration bill divided.
The Obama administration has deferred the deportation of some of the young people while the politics of the bill played out, drawing heavy criticism from some Republicans.
Graham said laws should be followed in regard to deportation of the students.
``What am I going to tell people in South Carolina when I legalize 2 million people here, when we haven't secured the border?'' he said.
This summer, Obama signed a bill providing $600 million to pay for the deployment of 1,200 National Guard troops to the border and to beef up other border and immigration enforcement.
Associated Press Writer Darlene Superville contributed to this report.
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