The Washington Times - November 17, 2012, 08:48AM

Sen. Kelly Ayotte, New Hampshire Republican, urged Democrats and Republicans on Saturday to work together and find a way to avert the double whammy of tax increases and deep spending cuts set to take effect next year, one day after the White House and top Congressional leaders reported progress following a Friday meeting on the so-called “fiscal cliff.”

“Failure to stop this combination of tax hikes and arbitrary spending cuts threatens to throw our country’s economy back into recession — at a time when millions are still out of work,” Ms. Ayotte said in the Weekly Republican Address. “This is a test we cannot fail. We can reduce the deficit without harming our economy. But it will take bipartisan cooperation to get there.”

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Ms. Ayotte pointed out that the nearly $500 billion in defense cuts that will begin to take effect next year “stand to hollow out our military” and could trigger the loss of a million private sector defense jobs.

“I’ve spent much of this year highlighting the need to find alternative savings in the budget to replace these cuts,” she said. “In doing so, I’ve made it clear that this issue requires presidential leadership. Last month, the president pledged that sequestration won’t happen — to avoid it, we need his active engagement.”

Ms. Ayotte also said that raising revenue through tax reform by closing loopholes and eliminating tax preferences makes more sense than increasing tax rates, arguing that the latter would “harm nearly a million small businesses and cost hundreds of thousands of jobs.”

President Obama wants tax rates on income of more than $250,000 to return to 39.6 percent, up from the current 35 percent level for top earners. In his weekly address, he urged Congress to swiftly pass a law that would prevent tax rates from going up on income less than $250,000 “so we can give families and businesses some good news going into the holiday season.” Though Mr. Obama described the Friday gathering as a “productive meeting,” neither he nor Republican leaders have yet been willing to budge on the tax rate issue.

Ms. Ayotte also stressed that reforms to Medicare and Social Security — federal entitlement programs for seniors that are sacred cows for many Democrats — must be part of a solution to the country’s debt issue.

“One thing is clear: Doing nothing is not an option. And any effort to address our fiscal crisis without including entitlement reform can’t be taken seriously,” she said. “A generation ago, at a time of divided government, Republican President Ronald Reagan and Democratic House Speaker Tip O’Neill bridged their differences to preserve Social Security. Some 30 years later, we find ourselves in a similar situation — with a Democratic President and a Republican House Speaker. If it could be done then, it can be done now.

“It will take courage to address the serious fiscal challenges our country faces. But Americans always come together to solve tough problems. And, for the good of the nation, now is the time for both parties to bring their best ideas to the table.”