By James Rowley and Cheyenne Hopkins 

A U.S. Senate Republican move to block two presidential nominees has revived calls by Democrats for new rules that would make it almost impossible to thwart upcoming picks.

A three-month bipartisan truce over nominees broke down yesterday when Republicans opposed two of President Barack Obama’s candidates, Representative Mel Watt to head the Federal Housing Finance Agency and Patricia Millett for a spot on a federal court in Washington, D.C.

“This is a war on the other two branches of government and their ability to do the jobs the American people need them to do,” Oregon Senator Jeff Merkley, a Democrat, said in statement after the nominees were blocked. “The Senate rules must change.”

Watt’s nomination was in doubt after it failed to advance yesterday, as Republicans questioned his qualifications for the job as the chief regulator of government-chartered mortgage companies Fannie Mae (FNMA:US) and Freddie Mac.

Two Republicans offered a compromise that would put Millett on the bench and cap the size of the U.S. Court of Appeals for the District of Columbia. Under the plan, Obama’s two other nominees for the court wouldn’t be approved.

Senate Majority Leader Harry Reid has in the past vowed to change rules that require 60 votes to move to a nomination, and instead wants to require a simple majority of 51 votes to proceed.

He stopped short of calling for a rules change now, saying, “Something has to change and I hope we can make the changes necessary through cooperation.”

‘Unprecedented Obstructionism’

The Nevada Democrat said in a statement yesterday that Republicans should end their “continued run of unprecedented obstructionism.”

Reid’s move would change longstanding Senate practice and led Republican leaders to accuse him of trying to strong-arm Obama’s nominees through the chamber. The majority leader told reporters he wouldn’t decide on whether to seek the rule change until after trying to advance the other two appellate judge nominees.

Speaking of Millett, Minority Leader Mitch McConnell yesterday said Obama is pushing to add judges to the appeals court because he and congressional Democrats “don’t want any meaningful check on the president.”

The Republican-led U.S. House provides such a check, said the Kentucky Republican, “but the administration can circumvent that with aggressive agency rule-making” if the D.C. Circuit “allows it to do so,” McConnell said.

Meanwhile, Federal Reserve Vice Chairman Janet Yellen’s nomination to lead the central bank isn’t seen as getting tangled up in the dispute over other presidential appointments, said Jaret Seiberg, a senior policy analyst with Guggenheim Securities LLC’s Washington Research Group.

‘Different’ Fight

“The chairman of the central bank is an entirely different political fight,” Seiberg said in a telephone interview. “If it got truly ugly, there could be a risk but it would have to be so dire that the Senate stops doing business.”

Kentucky Senator Rand Paul, a Republican who vowed to hold up Yellen’s nomination to get a vote on legislation that would require a public audit of the Fed, said yesterday he expects that Yellen will be confirmed.

Asked during an interview for Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend if Reid had the votes for Yellen’s confirmation, Paul said, “in all likelihood, yes.”

Too Soon

New York Senator Charles Schumer, the Senate’s No. 3 Democrat, said it was too soon to say whether the Republicans’ blocking of Watt and Millett would propel the Senate toward another confrontation over nominees.

“Let’s see what happens with the remaining judges,” Schumer said of two other nominees to a Washington appeals court.

Before the votes, Dick Durbin, the No. 2 Senate Democrat, told reporters that “there comes a tipping point” if Republicans push too hard.

A July deal cleared the way for a series of confirmations, including those of Gina McCarthy as Environmental Protection Agency administrator and Thomas E. Perez as U.S. Labor Secretary.

The nomination of Watt, a North Carolina Democrat, failed to advance on a 56-42 vote, four shy of the 60 needed to move to a debate and floor vote. According to the Senate Library, the last time the Senate didn’t confirm a sitting member of Congress for a major executive-branch post was in 1843.

Republicans have criticized Watt’s past support for Fannie Mae and Freddie Mac and his qualifications for the job. Watt, a lawyer, has served in Congress since 1992.

Appeals Court

Less than an hour after blocking Watt, the Senate failed to advance the nomination of Washington lawyer Millett, the first of Obama’s three nominations to vacancies on the U.S. Court of Appeals for the D.C. Circuit. Her nomination fell five votes shy of the 60 needed.

Vice President Joe Biden, who presided over the Senate during the Watt vote, said a rules change is “worth considering” because “it’s time for some common sense on confirmations.”

Republicans said they opposed Millett because there wasn’t enough work for more judges on the court. They didn’t dispute her professional qualifications that include arguing 32 U.S. Supreme Court cases.

Instead, they contended that her nomination was part of Obama’s plan to “pack” the court with judges more likely to uphold rules proposed by the Environmental Protection Agency and other regulatory agencies.

Bipartisan Agreement

The bipartisan deal on nominations worked out in July also allowed for Senate votes to confirm Richard Cordray to head the Consumer Financial Protection Bureau and cleared the way for Obama to fill vacancies that had crippled the operation of the National Labor Relations Board.

Arizona Republican John McCain, who helped broker the July deal, yesterday voted against advancing both nominations.

Democrats rejected the Republican argument about the court’s workload, saying it was concocted for partisan reasons to prevent Obama from putting more judges on the court.

Only one judge nominated by Obama sits on the court, Sri Srinivasan. He was confirmed unanimously in May. Several weeks later, Obama nominated Millett, Georgetown University law professor Nina Pillard and Robert Wilkins, a federal trial-court judge in Washington.

Millett was nominated to fill a seat held by John Roberts, who became the Supreme Court’s chief justice in 2005, two years after he was confirmed to the appellate court. The seat has been vacant since then.

During the presidency of George W. Bush, Senate Republicans confirmed four of his nominations — including that of Roberts – – to the D.C. Circuit.

‘Treated Differently’

“President Obama is being treated differently than President Bush was,” Senator Patrick Leahy, a Vermont Democrat, said in a floor speech.

The latest Republican move to block nominations “reopens the conversation about changing the Senate rules,” said Doug Kendall, president of the Constitutional Accountability Center, an advocacy group that supports Millett’s confirmation.

Two Republicans who voted to consider Millett’s nomination, Susan Collins of Maine and Lisa Murkowski of Alaska, suggested a possible compromise on the three appeals-court nominations. Collins said she had “raised the issue” with Obama of a scenario where the Senate would confirm Millett and pass a revised version of a measure from Iowa Republican Charles Grassley to eliminate the two other vacancies.

Grassley’s bill would cap the number of judges on the D.C. Circuit at the current eight, eliminating all three vacancies.

Earlier this week the Senate confirmed five Obama nominees, some of whom had waited as long as long as six months. They included Treasury Secretary Jacob Lew’s nomination to the International Monetary Fund’s board of governors and Thomas Wheeler as Federal Communications Commission chairman. Wheeler was confirmed unanimously after Texas Republican Ted Cruz lifted a hold on the nomination.