Obama said if Republicans agree to raise taxes on wealthy Americans, the revenue would be “sufficient to turn off” the sequester provisions of the so-called fiscal cliff, stopping automatic military spending cuts from going into effect -- a sticking point for many Republicans.
Graham, a member of the Senate Armed Services Committee, said he had discussed the impact of the spending cuts on the U.S. military with Defense Secretary Leon Panetta last night and was told that it would mean 800,000 layoff notices at the beginning of the year. The result would be destroying “the finest military in the world at the time we need it the most,” he said.
Tax policy remains the most stubborn divide in the dispute.
Republicans have resisted rate increases for any income level, maintaining that such a move would hurt the economy and hinder job creation -- especially by businesses that pay their taxes on their owners’ individual returns.
While the economy has shown resilience, politicians are wary of reactions by the public, employers and the markets if a deal isn’t reached by the Jan. 1 deadline.
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