Estate and Bush tax cuts could move together

"I think Senator Baucus is interested in doing more than the [Bush] tax cuts," he said.

Senate Finance Chairman Max Baucus (D-Mont.) has taken the lead in crafting an extension of the Bush tax cuts. But with gridlock in the Senate and 2010 whittling down to just a few months, Baucus could use the Bush tax bill as a vehicle to move other tax priorities.  

"We don't have multiple bites at the apple," the spokesman said, adding, "[Baucus] could include other stuff [with the Bush tax cuts], including the estate tax,"

Absent congressional action before next year, the estate tax reverts to pre-2001 levels that slapped a tax as high as 55 percent on inheritances worth more than $1 million. 

Baucus last week said he would like the estate tax to return to 2009 levels, which levied a 45 percent tax on estates worth more than $3.5 million, but he didn't rule out going lower on the rate.  

He said a 35 percent estate-tax rate was in the ballpark, but not near home plate. 

"That's in the outfield," he said. "It's still in the park, but it's getting close to the exit. But it is in the ballpark." 

It is unclear if the package will extend the Making Work Pay tax cut that also expires in December. The credit boosted paychecks this year by roughly $400 for single filers and up to $800 for joint filers. 

It is also uncertain if the so-called tax extenders will be a part of the package.

Still, moving the legislation forward depends on Senate leaders agreeing on which of the Bush tax cuts should be extended. 

Democratic leaders want to renew those benefiting the middle-class, while Republicans and many rank-in-file Democrats argue that the weak economic recovery should prompt the extension of all the tax cuts. No decision has been made on this issue.

"We have a number of meetings," Reid told reporters. "We have nothing worked out yet." 

Another outstanding issue is Reid and Senate Minority Leader Mitch McConnell (R-Ky.) agreeing to how the bill will be debated on the floor. 

Once an accord is reached on all fronts, the bill will likely be stand alone measure since it will not be added the Continuing Resolution that continues funding of the government. 

"I don't see that happening," Reid's spokesman said.

Several sources expect Baucus to introduce his tax bill by Thursday.