INDIANAPOLIS -- Indiana Senate leaders said Tuesday that the state should delay unemployment tax increases on businesses from 2010 to 2011 in an effort to help companies retain workers and possibly wait long enough for a federal bailout.

Republicans who control the Senate said Indiana's economy hasn't recovered as much as lawmakers had hoped, and delaying the tax increases on businesses would save jobs.

The unemployment tax increases approved this year were designed to help Indiana dig out from the $1.3 billion debt it owes to the federal government to cover unemployment benefits.

Gov. Mitch Daniels said he supports the plan.

"Given that the national economy is not yet recovering, and that no other state in the nation acted on their own UI shortfalls, I would sign a measure to postpone, for now, the higher premiums now scheduled," he said in a statement.

If lawmakers approve a one-year delay, Indiana would likely have to borrow an extra $250 million next year on top of what the state was already expected to borrow.