UPDATING AT 6:40PM

A senior Democratic official tells Fox that Sen. Joe Lieberman, D-CT, as chairman of the Homeland Security Committee, "recognized the implications and alerted the White House."

The aide pointed to language of the Collins amendment, that it applies to officials “without express statutory authorization and which is responsible for the interagency development or coordination of any rule, regulation, or policy….”

The aide continued:  "Neither the (White House) chief of staff nor the National Security advisor are authorized statutorily. Nor are dozens of other White House officials who coordinate policy. "

The aide contends, the amendment would have gone too far, encircling close advisers to the President.

Under pressure from the White House, arguing separation of powers, Senate Democrats on Thursday employed a procedural tactic to kill an amendment that would have imposed congressional oversight on some 18 czars appointed by the Obama Administration, though not confirmed by the U.S. Senate.

The amendment to a spending bill that funds the Interior Department was sponsored by moderate Maine Sen. Susan Collins, top Republican on the Homeland Security and Governmental Affairs Committee,who took to the floor to decry the move, saying she was "deeply disappointed" that her colleagues would do this.

The measure would have withheld federal funds for the creation of any new, unconfirmed czar positions until the Administration agreed to allow the individuals to testify before Congress, if a "reasonable request" was made, and every czar to produce a detailed "public, written report" biannually of their actions and involvement in the creation of policy, rules, and regulations.

"My amendment has been carefully tailored to cover officials that the President has unilaterally designated for significant policy matters. It would not have covered the President's chief of staff, for example, and it would not cover less senior White House officials, despite some misinformation to the contrary," Collins said, noting that her staff had worked with White House officials Wednesday night without agreement.

Senate Democratic Whip Dick Durbin, D-IL, a close ally of the White House, was not convinced, sensing a more politically-motivated attack, by "czar watchers," invoking "the political wiseman" Fox News' Glenn Beck, as well as Sen. Kay Bailey Hutchison, R-TX, who Durbin said had found a larger number of czars than Collins, who detailed 18 unconfirmed czars for the record. Durbin noted that both Beck, who he jokingly called a "political adviser," and Hutchison had come up with the same number of czars, 32, which included positions that are confirmed by the Senate.

"Who's going to define who is covered by your amendment?" Durbin implored. He also noted that the workload the Collins amendment would have imposed on the czars would be onerous.

But Democrats earlier in the week appeared to be on the cusp of accepting the amendment without objection.

Sen. Dianne Feinstein, D-CA, manager of the Interior spending bill, had told Collins that Democrats were prepared to include her amendment, though one objection had popped up. At the time, Collins told Fox that it appeared to be a simple misunderstanding. Soon after, it became clear the White House had objections. Feinstein told Fox Thursday that the White House had told her to back off, with the California Democrat saying, "It's a huge separation of powers issue. I had no idea."

Durbin listed czars used by President George W. Bush, as well, which he said numbered 47, though Collins appeared to disagree, saying "there wasn't this kind of proliferation" under Bush. Collins said her effort would be the same no matter who occupied the White House.

"Regardless of whether it's a Democratic president or a Republican president, a Democratic Congress or a Republican Congress, I think this is an institutional issue. And I think all of us as members of Congress should be very concerned about organizational structures that make it impossible for us to conduct productive, conventional oversight," Collins said.

Durbin would not bend, and instead offered, "The good news is this. Our trusted friend Joe Lieberman (chairman of the committee on which Collins serves)...has promised a hearing on this issue."

And with that, Durbin used a Senate rule that prohibits legislating on a spending bill, something that is often done by both parties despite the rule, to kill the measure.