CAPITOL HILL [updated 12:40 with Feinstein, Inouye remarks and results of amendment vote]: Sequestration drama roiled an otherwise pro forma mark-up of the Senate’s defense appropriations bill this morning, with a precious flicker of bipartisanship over the need to avert the sequester soon overtaken by disagreement over the legalities of layoff notices.

If the automatic cuts go into effect in January, “everything you achieved in this mark up is going to be wiped out,” Republican Senator Lindsey Graham warned his fellow Senate appropriators. Graham said that averting the sequester was so important that he and his fellow Republicans must “readjust” their no-new-taxes pledge and make a deal with Democrats to raise revenues.

“I wish we could do it all by reducing spending, I think we could, but the other side of the aisle has a point of view,” Graham said, and a bipartisan deal is essential. “I signed the tax pledge,” he went on. “I actually like Grover [Norquist],” the anti-tax activist behind the pledge, but the absolute stricture against any tax increase must be “revisited” he said, not by raising marginal tax rates but by closing loopholes, eliminating deductions, and plowing the increased revenue into averting sequestration — rather than returning it to taxpayers as Norquist would urge.

Graham had planned to offer a (non-binding) amendment to the appropriations bill urging the Senate to stop sequestration, but he said he would withdraw it because Senator Patty Murray had asked him to alter the wording to something she and her fellow Democrats could better support. Murray, who has warned Republicans that Democrats would let sequestration take effect rather than accept a deal with no revenue increases, spoke in Graham’s support at today’s hearing: “We all know sequestration is bad,” she said. “There is not one Senator or one American that wants it to go into effect [and] it is going to take all of us swallowing hard” to find a solution.

California Democrat Dianne Feinstein joined the stop-sequester chorus: “The economy has not punched back the way most people thought it would,” she said. “Sequestration on top of what we’ve already done carries with it some real economic hazards.” Her proposal: Find half the required savings for 2013, delay sequestration for half a year, and find a long-term solution in six months, when the pressures of time and a presidential election year were past. “We need to have regular order,” said Feinstein. “We need to know what we’re doing.”

Feinstein’s call echoed comments by Senate Armed Services Committee Chairman Carl Levin last month, who said the “can will get kicked down the road.” Levin proposed cuts of $200 million annually, divided equally between defense and civilian spending.

Despite the common stand against the sequestration, bipartisan consensus dissolved on contact with Graham’s second offered amendment, which would require federal contractors to issue notices of possible layoffs due to sequestration — something which the Labor Department has ruled, controversially, that the Worker Adjustment and Retraining Notification (WARN) Act does not require. Democratic Sen. Tom Harkin argued such a provision fell outside the appropriators’ jurisdiction, belonging properly to the Health, Education, Labor, & Pensions (HELP) committee, and added “it disturbs me how the WARN act is being used as a political football.”

After a recess to vote on the cybersecurity bill on the Senate floor, Sen. Inouye — who chairs both the full Appropriations committee and its defense panel — said that “the Senator from South Carolina [i.e. Graham] has been the voice of reason” on the need to avert sequestration, but he was simply wrong on the WARN Act and his amendment was simply “bad policy… and appears to serve a political agenda.”

Graham’s amendment failed on a party-line vote. Whether Congress will know what it’s doing in six months, as Sen. Feinsten said, is a whole other issue.