Snowe cautions Democrats to tread carefully on extending Bush-era tax cuts

Without stating her preference on the issue, Sen. Olympia Snowe (R-Maine) cautioned Democratic lawmakers to carefully consider the economic repercussions of extending the middle-class tax cuts enacted by President George W. Bush and allow those benefiting wealthier taxpayers to expire. 

"I think it is important to really be very circumspect," she told reporters on Thursday. "Do we want these tax cuts to expire at the end of this year? So how do we draw that line — or whether we draw lines remains to be seen. We're in the process of doing that."

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Snowe is a senior member on the Finance Committee that is charged with shepherding an extension of the Bush tax cuts through her chamber. More importantly, Senate Majority Leader Harry Reid (D-Nev.) often seeks her support to pass legislation from the floor. 

Democratic leaders have pledged to extend by the end of the year the Bush tax cuts for the middle class. Tax writers from both chambers are looking for a way to extend them. 

Without including an extension for tax cuts on the wealthy, Republicans contend the Democratic plan will raise taxes on small businesses and hurt economic growth. 

Their argument appears to be gaining traction because Democrats have yet to introduce their proposal and the tax cuts are set to expire in less than six months. 

"They're in a tizzy," said Sen. Orrin Hatch (R-Utah). "They don't know what to do."

The deficit is also a major issue. Extending all of the Bush tax cuts will cost more than $1 trillion, which would be difficult, if not impossible, to pay for. 

However, voter outrage over adding to the deficit makes it difficult for Democrats to extend breaks for the wealthy without taking some political heat.

Snowe supported offsetting the cost of the Bush tax cuts enacted in 2003, but did not state her preference Thursday. 

"We have to look at everything," she said, adding, "I think it's too early and premature to be drawing any lines in the sand on the question."