Updated: 10:27 p.m.

The Montana Republican Senate primary is in flux as Rep. Denny Rehberg will announce a bid against Sen. Jon Tester (D) in 2012.

Montana businessman Steve Daines, the only announced Senate GOP candidate, is expected to run for Rehberg’s House seat now that the six-term Congressman is opting to challenge Tester. Speaking with Roll Call before Rehberg’s plans were clear, Daines conceded there’s a possibility that he could switch races.

“We will cross that bridge if we come to it,” Daines told Roll Call. “This is about [the] three seats in Montana and ensuring we have leaders who are representing the values of Montana, versus Harry Reid and Nancy Pelosi.”

A Montana GOP political operative said Rehberg will make an announcement Saturday at a state dinner, a decision made after polling showed he is in a strong position against Tester. Last month, Rehberg was named an Appropriations Committee cardinal, a plum spot with substantial control over federal spending.

Rehberg was encouraged to challenge Sen. Max Baucus (D) in 2008 but opted to run for re-election instead. This time, the Congressman received a more forceful push as one of the best candidates who could help the GOP toward its goal of recapturing the Senate in 2012.

He lost his first Senate run to Baucus by fewer than 5 points in 1996 as he finished up a term as lieutenant governor. Four years later, Rehberg was elected to the House and has been re-elected each cycle since with at least 59 percent of the vote.

With eight statewide campaigns under his belt, Rehberg is considered a superior candidate with a better shot at overtaking Tester, who is in his first term. With Rehberg running against Tester and Daines running for the open House seat, the swap could give the party a better shot to win both seats.

Daines, who ran for lieutenant governor in 2008, had been asked about the possibility of swapping places with Rehberg since he announced his candidacy in November, and each time he has insisted he wants to do what is best for Montana.

Either way, Daines would be running statewide because Montana has just one House seat. In just two months, Daines and his wife have already put 5,000 miles on their pickup truck campaigning around the 147,000-square-mile state.

Daines announced raising about $225,000 in the first six weeks of his campaign, from Nov. 13 to Dec. 31, and most of that remained in the bank at the beginning of the year. Rehberg’s report was not available by press time.

Meanwhile, Tester raised $127,000 from Oct. 1 to Dec. 31 and has $562,000 in cash on hand as he prepares for his first Senate re-election campaign.

“Sen. Tester is building a tough and experienced campaign team because he knows what it takes to win,” Tester spokesman Aaron Murphy said. “He won’t give up on his record of hard work, working together and success for Montana, from creating private-sector jobs to cutting taxes to cutting the budget.”

Another potential candidate is Neil Livingstone, a terrorism expert and CEO of Washington, D.C.-based crisis management firm Executive Action. Livingstone considers Rehberg a friend and likely would not run if the Congressman is already in the race. That may be the case, as Livingstone estimates he will not make a final decision until late spring.

“Given the slow progress with jobs and the economy, and everything going on in the world today, it’s focusing me more and more at jumping into the ring myself, simply because I think I can do a better job,” Livingstone told Roll Call.

A Rehberg run for Senate would mean leaving the House and giving up his role as chairman of the Appropriations Subcommittee on Labor, Health and Human Services, and Education. Whoever ends up taking on Tester, Republicans think the Senator is in political trouble.

“Sen. Tester is very highly vulnerable in 2012. It’s not a matter of who our candidate is, it’s a matter of his record,” Montana GOP Executive Director Bowen Greenwood said.

“He voted for Obamacare and 60 percent of Montanans oppose that. He voted for the stimulus. He didn’t just break his campaign promise to oppose earmarks, he trampled on it,” Greenwood said. “Jon Tester has betrayed Montana, and that bill is coming due in 2012.”