Republican Rumble in Texas?

Dec. 4, 2008 -- Sen. Kay Bailey Hutchison took the first step today toward setting up a Texas-size Republican rumble in 2010.

Even though Republican Gov. Rick Perry said in April that he plans to seek a third term in 2010, Hutchison signaled she is thinking about taking him on by transferring $1 million from her federal re-election account into a new gubernatorial exploratory committee.

"I am not yet a candidate," said Hutchison in a statement posted to TexansforKay.com, "but Texas law requires this first, important step before an announcement can be made."

Hutchison sought to contrast her tenure with Perry's in Texas, saying, "There's too much bitterness, too much anger, too little trust, too little consensus and too much infighting."

"[T]he tone comes from the top," she added. "Texans are looking for leadership and results."

'Bring It On'

Perry was asked Tuesday by the Dallas Morning News about the prospect of Hutchison mounting a challenge to his re-election.

His response:"Bring It On."

A Perry spokesman questioned whether Hutchison has the fire in the belly to formally get into the race this time, noting that the Texas senator considered gubernatorial bids in 2002 and 2006 before dropping the idea.

"Kay has done this before," Perry spokesman Mark Miner told ABC News. "She's talked about running for governor and passing legislation for years -- but neither has happened."

While Hutchison has passed on gubernatorial runs before, she might have more of an incentive to run in 2010 now that Republicans are in the minority in the Senate.

The Democrats won a 51-seat majority in 2006 and picked up an additional seven seats in 2008 with an additional pickup opportunity in Minnesota still not decided.

If Hutchison were to formally get into the race, she can count on being hammered by Perry for having voted for the Wall Street bailout in October.

Hutchinson Could Keep Senate Seat During Gov Race

"We call her Kay Bailout," said Miner. "She's out of touch. She's voting for bailouts and we're seeing the federal government's deficit balloon."

Hutchison, who is not up for Senate re-election until 2012, would not be required to resign her Senate seat in order to run for governor.

She has not yet decided whether she would hold onto her seat or resign in order to focus full-time on her potential gubernatorial run.

ABC News' Andrea Owen and Hope Ditto contributed to this report.