The proposal that failed was the one passed by the House Thursday, which would have funded the government until Feb. 16, extended the low-income children's health insurance program, or CHIP, for six years and suspended some Obamacare taxes for two years.
Senate Democrats, demanding progress on the fate of those covered by the DACA program, huddled just off the Senate floor for more than hour prior the vote, after the prospect of an agreement between Democrats, Republicans and the White House had already fallen apart.
Democrats withheld their support for the bill, demanding more progress on Dreamers while some Republicans, frustrated with the spate of month-long spending bills, opposed any short-term solution.
Democrats placed the blame on Republicans and President Trump for walking away from negotiations.
Senate Minority Leader Chuck Schumer, D-New York, blamed Trump for being a slippery and unreliable negotiating partner. "What will it take to get Trump to say 'yes?'" Schumer asked.
Senate Majority Leader Mitch McConnell, R-Kentucky, gave a fiery floor speech, saying the shutdown was "100 percent preventable" and blaming the Democrats.
Meanwhile, as agencies began sending emails announcing their closure or limited capability, the White House released a statement just before midnight, saying "Senate Democrats own the Schumer Shutdown."
"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," White House Press Secretary Sarah Huckabee Sanders said in a statement.
Schumer presented a proposal to break the logjam to Trump in a mid-day meeting at the White House, according to multiple Democrats — a plan to fund the government over the next two years, including money for disaster aid, the low-income children's health insurance program, opioid funding, border security and relief for those Dreamers covered by DACA.
"I even put the border wall on the table," Schumer said.
But when Schumer left the meeting, the concept started to unravel when McConnell and Trump's chief-of-staff John Kelly opposed it, according to a person familiar with the situation.
Schumer also proposed a shorter stop-gap measure, lasting just a few days, to be used as a hard deadline on an agreement on government spending levels, DACA, border security, disaster aid and children's health care.
"We're inside the 10-yard line on five issues we need a process to close the deal. And we need the president to do it," Sen. Lindsey Graham, who helped to block the funding bill, said.
After the public blame game and with the government closed, McConnell stood at his podium and said he's "open" to a stop-gap spending measure to Feb. 8, which is a possible route to re-open the government.
A late flurry of activity on the Senate floor suggested a last-minute deal to avert a shutdown may have been close.
Sen. Jeff Flake, R-Ariz, claimed McConnell had committed to a vote on immigration by Feb. 8 regardless of White House support.
"That's the key tonight," said Flake, who was part of a bipartisan group of senators that reached a deal last week to provide a path to citizenship for many of those covered by DACA alongside border security that met the White House's previous request, only to see it rejected by the president in a foul-mouthed meeting.
"Before it was — I had the commitment to have a vote, but then it morphed into 'you'll have a vote on something the president supports, we want a commitment from the president,'" said Flake.
"Tonight that linkage is broken, gratefully, because let's face it, we can't get a straight answer from the White House."
The Senate will reconvene at noon on Saturday.
The day began with a high-stakes game of chicken and the president signaling that a shutdown was possible.
"Government Funding Bill past [sic] last night in the House of Representatives. Now Democrats are needed if it is to pass in the Senate - but they want illegal immigration and weak borders," Trump tweeted. "Shutdown coming? We need more Republican victories in 2018!"
The House, which passed a funding bill Thursday night but stayed in town, will come into session on Saturday, putting out a release that votes are expected.
"Tonight, on the eve of the first anniversary of his inauguration, President Trump earned an 'F' for failure in leadership," House Minority Leader Nancy Pelosi, D-California, said in a statement just after midnight.
It's the first shutdown since 2013 when a Democrat, Barack Obama, was the president and Republicans controlled Congress.
"I don't understand why amnesty for DACA residents is an emergency. Nobody is being deported," Sen. John Kennedy, R-La., said.
Sen. Jon Tester, D-Montana, called the Republican bill "irresponsible."
"I'm not going to vote for this. It's very irresponsible. It doesn't do what this country needs at all," Tester said.
With the finger-pointing over who would be responsible already underway, a new ABC News/Washington Post poll found that 48 percent of Americans would blame President Trump and Republicans for a shutdown while 28 percent said they would blame Democrats and 18 percent said both parties would be at fault.