By Jay Heflin - 08/10/10 02:08 PM EDT
Rep. Gerry Connolly (D-Va.) told The Hill on Tuesday that the Senate is looking at temporarily extending all the tax cuts enacted by President George W. Bush.
"I think there is some chance that the Senate will provide for a temporary extension of all of the tax cuts," he said.
Connolly is not a part of the tax-writing Ways and Means Committee, but said there is talk of a one-year extension. He did not know if its cost would be offset.
Continuing the upper-brackets for 10 years would cost approximately $700 billion. But it is highly unlikely that lawmakers would pass a long-term extension. Some have said a one-year extension would cost roughly $40 billion, while others contend that figure is too low.
Senate Finance Committee Chairman Max Baucus (D-Mont.) will likely take the lead on whatever moves in the Senate.
"Sen. Baucus introduced a bill in March of 2009 to make the middle-class tax cuts permanent," a committee aide told The Hill. "He said when he introduced that bill that it should be a starting point in the conversation in Congress about how to handle the expiring rates."
The so-called Bush tax cuts are slated to expire at the end of the year. But the sluggish economic rebound has created some concern that allowing those breaks to expire could hinder any chance for a robust recovery.
"The problem is the recovery has slowed down, and you don't want to do anything that is going to have a deleterious effect on what growth we are experiencing," Connolly said.
House leaders recently have said that the Senate would take the lead on extending the Bush tax cuts. They have also repeatedly called for ending the breaks benefiting individuals earning more than $200,000 and couples making over $250,000 while extending relief for the middle class.
Connolly said the only way to continue the tax breaks for the wealthy is for the Senate to move first.
"I've been told by some in leadership that [extending tax cuts for the wealthy] is simply not going to happen on our side," he said. "We won't have that option."
Connolly supports a temporary extension of all the Bush tax cuts, but would like to see their cost offset.
"I never thought I'd say these words, but our hope is in the Senate," he said.