Washington (CNN) - An emerging tax cut compromise could be to temporarily extend Bush-era tax cuts for all income levels, congressional sources in both parties told CNN Thursday.
Republican and Democratic sources say in this scenario - a short term extension across the board - both sides would be giving ground.
Democrats would compromise on their pledge to let tax cuts for the wealthy expire, and Republicans would give on their promise to make all tax cuts, including those for the wealthiest Americans, permanent.
On its face, the idea appears nonsensical, since Democrats and Republicans agree on permanently extending middle class tax cuts - for those making $250,000 or less.
But GOP sources in particular say keeping tax cuts for the middle class and the wealthier Americans linked may be in their best interest.
They say an idea that had been floating - to "decouple" - is untenable. Under that scenario, middle class tax cuts would be made permanent and tax cuts for wealthy Americans would be extended temporarily.
These GOP sources say that would put them at a political disadvantage in that it would make the discussion all about tax cuts for the wealthy. The sources also say tax cuts for the wealthy would be harder to extend in the future without being linked to middle class tax cuts.
These sources in both parties emphasize that talks have not yet begun in earnest, but the idea would be to extend all tax cuts at least for two years, through the next presidential election, and, they hope, until the economy gets better.
Meanwhile, if the two sides remain deadlocked, some Republican sources say it could be to their advantage to let the cuts expire at the end of the year - for what could be a few weeks - and then take the issue up when the new Congress convenes in January, when GOP lawmakers have more power.
It does seem clear that Democrats know they have a lot more leverage now, and it behooves them to try to cut a deal before the end of the year.
However, the question both Republican and Democratic sources are asking is whether liberal and moderate Democrats who were already divided on the tax cut issue can come together and agree among themselves now, never mind in negotiations with Republicans.