WASHINGTON (AP) - President Bush's immigration plan to legalize as many as 12 million unlawful immigrants while fortifying the border collapsed in the Senate on Thursday, crushing both parties' hopes of addressing the volatile issue before the 2008 elections.

The Senate vote to drive a stake through the delicate compromise was a stinging setback for Bush—who had made reshaping immigration laws a centerpiece of his domestic agenda—engineered by members of his own party.

It could carry heavy political consequences for Republicans and Democrats, many of whom were eager to show they could act on a complex issue of great interest to the public

From breitbart emphasis my own.

Maybe I am cynical but....
The common wisdom is that recent immigrants and ethnic minorities vote democratic. Certainly most of the pro immigration political figures are democratic (with the exception of Signore Bush). If I were a republican political strategist looking to sow dissension amongst the democratic base what better way to do it then to put forth a pro immigration bill which the democratic majorities in the house and senate would have to vote against.

Make no mistake this was a pro immigration bill. How do I know? There are numerous websites which dissect the bill and explain the z visa policy. But for me the simplest test is that the Mexican president, Felipe Calderon, was for it.

The impact this will have, in 2008, will be interesting. The democratic party is comprised of many fractions, there is the pro immigration group, the greens, the socialists, the anti war crowd. There is some overlap between the groups but this is not a unified party by a long stretch. Picking away at significant groups will do wonders come 2008, especially with an independent candidate with a large democratic following like Mike Bloomberg (assuming he runs) already pulling votes from the democrats.