The Senate on Thursday rejected a Democratic proposal that would have rewritten bankruptcy law to help struggling mortgage borrowers, while moving ahead with debate on a housing market rescue bill that includes a $6 billion tax break for home builders.

WASHINGTON (Reuters) - The U.S. Senate edged closer to consensus on Wednesday on a bipartisan bill to help homeowners hit by the mortgage crisis, with agreement seen on a tax break for home builders and other measures.

The plan includes a tax break and letting FHA insure more loans. President Bush today plans to outline a number of proposals to stem the tide of mortgage defaults and help people hold on to their homes, a senior administration official said Thursday.