Graham: Panetta says deal likely won’t prevent sequester cuts

Sen. Lindsey GrahamLindsey GrahamKerry: US 'on the verge' of suspending talks with Russia on Syria GOP leaders express reservations a day after 9/11 veto override McConnell opens door to changing 9/11 bill MORE (R-S.C.) on Sunday said he had been told by Defense Secretary Leon Panetta that it was unlikely the “fiscal cliff” deal being negotiated would prevent sequester cuts to the Pentagon.

“I was called by Leon Panetta last night at 7:30, during dinner. … And he said, Lindsey, I have been told that there's going to be nothing in this bill to avoid sequestration going into effect,” Graham said on “Fox News Sunday.”

“He says if we do this, it will be shooting the Defense Department in the head and we'll have to send out 800,000 layoff notices the beginning of the year,” Graham said. “He is worried to death that if we don't fix the sequestration, we're going to destroy the finest military in the world at a time we need it the most. And this bill doesn't cover defense cuts, on top of the ones we've already have.”

Meanwhile, Senate negotiators were scrambling to craft a deal to avoid January’s combination of rising tax rates and automatic, across-the-board spending cuts. 

But reports suggested that any fiscal deal would fall well short of earlier expectations, with lawmakers possibly focusing only on taxes.

Senate Majority Leader Harry ReidHarry ReidNo GOP leaders attending Shimon Peres funeral Overnight Regulation: Feds finalize rule expanding sick leave Anti-trade senators say chamber would be crazy to pass TPP MORE (D-Nev.) set a 3 p.m. deadline Sunday to reach a deal.

Graham on Sunday, though, said the odds that negotiators would hammer out a compromise by the end of the year were “exceedingly good.”

Graham said the likelihood that a tax increase on the wealthy would be part of a final agreement would be a “political victory” for President Obama, who has pushed for high-income earners to pay more in any deficit-reduction deal. 

“I think, whatever we accomplish, political victory to the president, hats off to the president. He stood his ground. He's going to get tax rate increases, maybe not $250,000, but upper-income Americans,” he said. “And the sad news for the country is, that we have accomplished little in terms of not becoming Greece or getting out of debt. This deal won't affect the debt situation.

“Hats off to the president," Graham said. "He won."