Update: The Senate has passed wiretapping bill in its entirety just before 6pm ET, 68-29. More here.

With just a few days until a stop-gap surveillance measure expires, the Senate finally seemed ready to acquiesce to President Bush's demand that telecommunications companies that helped him spy on Americans be let off the hook.

After failing to strip immunity from the Senate bill, Sen. Chris Dodd announced he would abandon his effort to block the bill with a filibuster, arguing that the House, which has passed an immunity-free bill, would be a better place to try to strip immunity from Congress's final piece of legislation.

"We lost every single battle we had on this bill," Dodd said on a conference call Tuesday with reporters and bloggers. "And the question is now, Can we do better with the House carrying the ball on this bill?"

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The bill to update the Foreign Intelligence Surveillance Act, including a provision granting retroactive immunity to telecommunications companies that facilitated government spying, passed the Senate on a 68-29 vote Tuesday evening.

In an effort to move along the legislative process prior to a Friday deadline on the temporary measure, Dodd said he wanted the Senate to pass something so that both chambers can begin a conference committee. If the two chambers produce a bill containing immunity, Dodd said he would filibuster that conference report.

There seemed some hope for blocking immunity in the House, as its Judiciary Committee Chairman John Conyers, who has seen secret White House justifications for its warrantless wiretapping, said the documents do not support giving immunity to the telecommunications companies.

"Indeed, review and consideration of the documents and briefings provided so far leads me to conclude that there is no basis for the broad telecommunications company amnesty provisions advocated by the Administration and contained in the Foreign Intelligence Surveillance Act (FISA) bill being considered today in the Senate," Conyers wrote in a letter to White House counsel Fred Fielding (.pdf). and that these materials raise more questions than they answer on the issue of amnesty for telecommunications providers."

On Tuesday, the Senate struck down several proposals to strip retroactive immunity from an update to the Foreign Intelligence Surveillance act and seemed ready to pass a final bill. However, the FISA update still needs to be squared with the House, which passed an immunity-free version several months ago and remains opposed to the proposal.

The Senate actions would shield from lawsuits telecommunications companies that helped the government eavesdrop on their customers without court permission after the Sept. 11 terrorist attacks.

After nearly two months of stops and starts, the Senate rejected by a vote of 31 to 67 an amendment sponsored by Sens. Chris Dodd (D-CT) and Russ Feingold (D-WI) that would have stripped a grant of retroactive immunity to the companies.

Also voted down were amendments that would have shielded the companies from most aspects of the lawsuits while still maintaining some judicial oversight of Bush's program, which critics say violated privacy and telecommunications law. On a 30-68 vote, the Senate rejected a proposal from Sens. Arlen Specter (R-PA) and Sheldon Whitehouse (D-RI) that would have made the government stand in as defendant in those suits. The Senate then rejected an amendment to allow the FISA court to determine whether the companies did, in fact, respond in "good faith" to government requests; that proposal from Sens. Dianne Feinstein (D-CA), Bill Nelson (D-FL) and Ben Cardin (D-MD) failed on a 41-57 vote.

Sens. Barack Obama (D-IL) and John McCain (R-AZ) took some time from campaigning for Tuesday's slate of "Potomac Primaries" in Maryland, Virginia and Washington to swing by the Capitol and vote on the amendments. Obama voted for the amendments to strip immunity from the bill, while McCain opposed the amendments and voted in favor of keeping immunity.

Hillary Clinton did not vote on the immunity issue at all, although she was in Washington at least part of the day Tuesday, competing in the same primaries as Obama and McCain.

It is unclear whether Clinton will pay a political price for her absence, especially in light of her campaign's decision last fall to highlight Obama's "present" votes when he was an Illinois State Senator. "A president can't pick and choose which challenges he or she will face," she said in October.

National Journal correspondent Shane Harris suggests Clinton's present votes could be a bit of a boon for Obama, but likely won't hurt Clinton too much because the most vocal immunity proponents probably already weren't going to vote for her anyway.

"She was never considered fully onboard with the anti-immunity crowd, represented most vocally in the Senate by Christopher Dodd (D-Conn.). Presumably, this hands Obama an arrow to fire at his rival, who has criticized the former Illinois state senator for his record of "present" votes," he writes.

"But I’m not sure how sharp this arrow is. Obviously, the liberal wing of the Democrat party will have some problems with her non-position position. But I don't see how this costs her anything in the primaries, or in the long run. But let’s see how she votes on the full bill, or if she does."

A Clinton spokesman did not immediately respond to a request for comment on the New York senator's absence from Tuesday's votes, but Marc Ambinder reports she had already left Washington to campaign in Texas.

"Senator Clinton was unable to vote earlier, but she has made her strong opposition to this legislation crystal clear," her Senate spokesman Philippe Reines tells Ambinder in an e-mail.

President Bush has promised to veto any new surveillance bill that does not protect the companies that helped the government in its warrantless wiretapping program.

About 40 lawsuits have been filed against telecom companies by people alleging violations of wiretapping and privacy laws.

Telecom immunity must still be approved by the House; its version of the surveillance bill does not provide immunity.

Roll Call reports that House Democrats may not be ready to give in to the president's immunity demands and are girding themselves for a fight if Republican senators obstruct, or President Bush vetoes, an immunity-free bill. The Captiol Hill newspaper's Emily Pierce reports:

The government's post-9/11 Terrorist Surveillance Program circumvented a secret court created 30 years ago to oversee such activities. The court was part of the 1978 Foreign Intelligence Surveillance Act, a law written in response to government abuse of its surveillance authority against Americans.

Glenn Greenwald, a lawyer and blogger for Salon who has sharply criticized the warrantless wiretapping program, offers a brief history lesson Tuesday on the catalyst for FISA reform and its disappointing endgame:

The surveillance law has been updated repeatedly since then, most recently last summer. Congress hastily adopted a FISA modification in August in the face of dire warnings from the White House that changes in telecommunications technology and FISA court rulings were dangerously constraining the government's ability to intercept terrorist communications.

Shortly after its passage, privacy and civil liberties groups said the new law gave the government unprecedented authority to spy on Americans, particularly those who communicate with foreigners.

That law expires Feb. 15, the deadline against which the Senate is now racing to pass a new bill. Senate Majority Leader Harry Reid reportedly has prepared 15-day, 30-day and 18-months extensions of the temporary Protect America Act he would seek to pass if the push for a long-term update stalls again.

In a separate voice vote Tuesday, the Senate expanded the power of the court to oversee government eavesdropping of Americans. The amendment would give the Foreign Intelligence Surveillance Court the authority to monitor whether the government is complying with procedures designed to protect the privacy of innocent Americans whose telephone or computer communications are captured during surveillance of a foreign target.

The House approved its own update last fall, and differences between the two remain to be worked out, approved by both houses, and delivered to the president for his signature.