The U.S. Senate could vote on Tuesday to extend a popular tax break for home buyers that has helped lift the housing market out of its worst slump since the Great Depression.

Housing has become such a hot button issue that investors sold off U.S. stocks and pushed the dollar sharply higher on Monday after a misleading media headline said research firm, ISI Group, had written the tax credit probably would not be extended when it expires November 30.

Under Reid's plan, the $8,000 tax credit would be phased out over time, dropping to $6,000 in April, $4,000 in July, and $2,000 in October, before expiring at the end of 2010.

The tax credit was approved in February 2008 and about 1.5 million tax returns filed with the Internal Revenue Service have claimed the credit at a cost to the government of $10 billion, according to officials.

Isakson, a former real estate agent, would also raise the income limit of eligible home buyers to $300,000 per family from the current $150,000 limit.

The U.S. real estate and homebuilding industry is lobbying Congress to extend the tax credit although critics say it gives cash to many buyers who would have purchased a home without the benefit.

The White House has also raised concerns about the cost of expanding the credit.