The guidance letter said it would be "inappropriate" for employers to send such warnings because it remains speculative if and where the $110 billion in automatic cuts might occur. About half the cuts would be in defense.
"This is bad policy, not necessary and appears to serve a political agenda," Appropriations Committee Chairman Daniel Inouye, D-Hawaii, told Graham and the panel.
Graham insisted the cuts aren't speculative but rather the law. He quoted from then-Sen. Barack Obama, who in 2007 pushed legislation calling for 90-day notices for employees of potential layoffs.
"Contractors are not the problem. We're the problem. We created this mess," Graham said, arguing that the notices would force Congress to come up with an alternative to avert the automatic cuts.
President Obama and congressional Republicans agreed last summer to a deficit-cutting bill that includes a mechanism that would trigger across-the-board cuts to defense and domestic programs totaling $1.2 trillion over 10 years.
Ratcheting up the political pressure, presidential candidate Mitt Romney and fellow Republicans have accused Obama of shirking his duty as commander in chief by failing to negotiate with Congress on a way to avoid the cuts. Democrats counter that Republicans, who voted for the cuts, must consider higher taxes on the wealthy as part of an alternative to the reductions.
Graham suggested that Obama call Sen. John McCain, the top Republican on the Armed Services Committee and the 2008 presidential nominee, to work out a compromise.
Questioned about that idea, White House spokesman Jay Carney said Obama "believes that if Republican leaders were to tell him that they were ready to support the basic principles that we need to address our fiscal challenges in a balanced way, then we could move forward with a plan for deficit reduction that doesn't just cut spending, doesn't just reform entitlements, but also asks everyone to pay their fair share."
"We could get this done very quickly," Carney said.
Adding to the political recriminations is the possibility that major defense contractors such as Lockheed Martin Aeronautics Co. would notify its 120,000 employees of possible cuts the Friday before the election, effectively giving it a say in the outcome of the presidential race and congressional contests.
The White House fears this could hurt Obama's re-election chances in states with heavy concentrations of defense workers, such as Virginia.
Graham and two other Republican senators McCain and Kelly Ayotte of New Hampshire spent two days this week in the battleground states of Florida, North Carolina, Virginia and New Hampshire, warning voters of job losses from the automatic cuts.
In fact, Deputy Defense Secretary Ashton Carter told Congress on Wednesday that the cuts wouldn't affect money already in the pipeline for defense contractors.
Inouye suggested it was far-fetched that Lockheed Martin would fire all its employees.
Lockheed Martin is the builder of the F-35 stealth fighter, the costliest aircraft ever. The next-generation fighter jet has been troubled by schedule delays and cost overruns. Ten years in, the total F-35 program cost has jumped from $233 billion to an estimated $385 billion. And, recent estimates say, the entire program could exceed $1 trillion over 50 years.
The committee vote came as the panel approved a $604 billion defense spending bill that reverses proposed Pentagon cuts in Air Force personnel and equipment. The vote was 30-0.
The measure would provide $511 billion for the base budget and $93.3 billion for the war in Afghanistan in the fiscal year beginning Oct. 1 as the committee moves money to war funding to meet the budget caps.
The bill is nearly $29 billion less than current spending.
The legislation provides $800 million to halt the Air Force's planned cuts. In its budget proposal, the Pentagon called for a cut of 5,100 troops from the Air National Guard, 3,900 from active duty and 900 reservists as well as 134 aircraft. That proposal met stiff resistance from the nation's governors and members of Congress.