Bernie Sanders has vowed to make opposing Donald Trump's proposed budget his next fight, following the collapse of the President's plan to repeal Obamacare.
The former Democratic presidential nominee celebrated the withdrawal of President Trump's draft American Health Care Act (AHCA).
Republican House Speaker Paul Ryan said he had agreed with the President to withdraw the vote, after it became apparent it would not get the minimum of 215 Republican votes needed.
Mr Sanders said the bill's defeat showed "Americans won't accept huge tax breaks for billionaires while 24 million people are kicked off health insurance."
After the setback, Mr Trump blamed Democrats for failing to work with his party—despite the Republicans' control of Congress, as well as the Senate.
It was the second big defeat of presidency, after judges ruled against his revised executive order barring travel from six predominantly Muslim countries. The first order was also thrown out by the courts.
Mr Trump said his party will now go "very, very strongly for big tax cuts and tax reform", something Mr Sanders vowed to fight.
"We now must take on a horrific Republican budget and efforts at 'tax reform' which means huge tax breaks to billionaires and corporations," said the veteran Vermont Senator.
Mr Trump's initial 2018 budget proposal allocates an extra $54 billion (£43 billion) for the US armed forces and his promise to construct a wall along the border with Mexico is also provided for in the "pared-down first draft" revealed earlier this month.
However, the Environmental Protection Agency, the State Department and the Agriculture Department would take big hits to their budgets under Mr Trump's plan, which would also eliminate funding for 19 government agencies.
They include the African Development Foundation, the Corporation for Public Broadcasting, the Institute of Museum and Library Services and the National Endowment for the Arts.
The President has said he wants to cut the rate of corporation tax, currently the highest among advanced economies, from 35 to 15 per cent.
For individuals, Mr Trump has said he wants to simplify the US' tax bands, reducing the number from seven to three, with thresholds at 12, 25 and 33 per cent.
It would mean scrapping the current 10 per cent rate for those earning less than $19,625 (£15,737) as well as lowering the amount people can earn before tax kicks in, regardless of how many children live in a household.