Updated at: 10/26/2009 5:05 PM

Senators Wrestle With First-Time Homebuyer Extension

WASHINGTON (AP) - Top Senate Democrats are proposing an extension of a popular tax credit for first-time homebuyers.

The $8,000 tax credit expires at the end of November, but Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus's plan would extend it through the end of March.

It would then be phased out in the following months, with its value dropping by $2,000 each quarter through the end of 2010.

There's also a more generous, bipartisan plan being floated on Capitol Hill that would extend the $8,000 credit through June 30, 2010. It would also boost the income cap for eligibility and open the credit to all buyers, rather than first-timers.

Supporters say the tax credit has helped revive the housing market and warn if it ends, home sales could drop. The plan could face a vote this week.