Democrats in the Senate were successful in blocking legislation that combined a minimum wage increase with estate tax breaks.
Republicans fell four votes short of getting the 60 votes they needed to end debate on the measure.
Democrats support raising the minimum wage but oppose the estate tax breaks to which the increase was attached.
Under the legislation, the minimum wage would increase in three steps. The minimum wage would increase to $5.85 per hour in January 2007, $6.55 per hour in June 2008, and $7.25 per hour in June 2009.
Last week, the U.S. House of Representatives voted 230 to 180 to approve the legislation.
The last increase in the federal minimum wage came in 1997, when it rose to $5.15 per hour. Many states have passed legislation that boosts their minimum wage above the federal level.