Cybersecurity bill dead after second U.S. Senate rebuff

WASHINGTON (Reuters) - Senate Majority Leader Harry Reid declared a U.S. cybersecurity bill, opposed by business and privacy groups, dead on Wednesday after it failed a test vote for the second time.

The bill would have increased information-sharing between intelligence agencies and private companies. It also would have set voluntary standards for businesses that control electric grids or water treatment plants.

Business groups opposed the bill as overregulation and privacy groups worried it might open the door to Internet eavesdropping.

"Everyone should understand cybersecurity is dead for this Congress," said Reid, a Democrat, adding, "Whatever we do on this bill, it's not enough for the Chamber of Commerce."

Reid invited President Barack Obama to issue an executive order "to fully protect our nation from the cybersecurity threat."

The measure fell nine votes short of the 60 needed to limit debate on the bill and open the way to a final vote.

A trade group, the Software Alliance, said Congress should give top priority next year to bolstering security.

Backers had hoped to move the bill during the post-election session. Homeland Security Secretary Janet Napolitano said recently that attacks on U.S. financial institutions and stock exchanges showed the need for more cyber safeguards.

Defense Secretary Leon Panetta said last month that unnamed foreign elements had been targeting computer control systems that operate chemical, electricity and water plants and those that guide transportation.

Senator Susan Collins, the senior Republican on the Senate Homeland Security Committee, said the risk from a cyber attack was huge.

"In all my years on the Homeland Security Committee, I cannot think of another issue where the vulnerability is greater and we've done less," Collins said.

(Reporting By Charles Abbott; Editing by Peter Cooney)