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Kaine, Allen At Odds On How To Avoid Fiscal Cliff

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George Allen speaks at the first Senate debate in September.
 
(AP Photo/Evan Vucci)
  George Allen speaks at the first Senate debate in September.  

Military spending and looming defense cuts have become a centerpiece of the race to fill Virginia's open U.S. Senate seat, and those topics are sure to be front-and-center in tonight's debate between Democrat Tim Kaine and Republican George Allen. 

It's not just Virginia's defense industry that s worried about pending cuts to the federal budget. Within 20 minutes of sitting down with Northern Virginia tech companies earlier this fall, Democratic Senate candidate Tim Kaine was asked about budget problems weighing down the federal government. 

"We have to have a deal before year end on the combination of the sequester and the expiration of all these various tax cuts," he said.

"Sequester" or "sequestration" is the name for the $1 trillion in cuts slated to rip through the federal budget starting in January. Those cuts, which Kaine supported, was intended to scare lawmakers into compromising on a broader budget deal. But that never happened. 

Politicians are now scrambling to find a solution before $500 billion in cuts can hit the Pentagon, potentially meaning thousands of jobs lost in Virginia alone. To avert the cuts, Kaine is calling for tax reform, ending oil subsidies and hiking taxes on people with incomes at $500,000 or more. 

"There's nothing about my $500,000 position that's sort of theological, but it s just, 'okay, before year end we've got to find a compromise,'" Kaine says. 

For his part, Allen continues to question Kaine's judgment for supporting the sequester in the first place. 

"Now we have this sequestration deal, this latest failure from Washington, which I opposed from the very beginning," Allen said.

So what's Allen's plan now that the sequester is on the books? For starters, he rejects Kaine's approach. "Well raising taxes doesn't create any jobs. Except, maybe, at the I.R.S.," Allen says. 

Allen is also calling for tax reform, repealing the president's health care law and cutting on the non-defense side of the federal books. "We need to have a balanced approach in Washington where you cut spending and also increase revenues by growth in the economy," Allen says.

The budget debate in Virginia is largely centering on the same tax questions that set up the sequester. As the two Senate candidates continue to duke it out, the state's defense industry is hoping lawmakers can put partisan differences aside and reach a broad compromise. Many in the industry report they're not holding their breath. 

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