Graham, appearing on CNN's "State of the Union," noted Democrats went along with extending the tax cuts two years ago on the premise the economy was too weak to allow them to expire and he's "dying to hear how our economy is better today than it was two years ago. ... This is all politics. This is not economics."
Graham maintained the economy has deteriorated since President Obama took office in 2009 citing a 49 percent increase in the debt, high unemployment, increased gasoline prices and reduced property values.
"None of his policies are working. Obamacare. You were not supposed to lose your healthcare. Millions of people are losing their healthcare because it costs too much. Premiums were supposed to go down. They're going up. So the idea that now the economy is better than two years ago when President Obama said don't raise taxes, it would be bad for the economy, is all politics. It's not based on economics," Graham said.
Graham said instead of allowing the tax cuts to be extended or just expire, the Bowles-Simpson plans proposal to flatten the tax code should be adopted.
"Let's eliminate all deductions but two, take the money to pay down rates and to pay off debt," Graham said, urging both Obama and Republican challenger Mitt Romney to "pledge if I get to be president of the United States, we're going to do Bowles-Simpson. That's what America is yearning for."
Bowles-Simpson refers to a presidential panel created in 2010 to look at the economy, but failed to issue a report.
In the meantime, Graham said, Congress should close tax loopholes to avoid sequestration -- mandatory spending cuts adopted to force lawmakers to come up with a spending plan after the so-called supercommittee failed to come up with a solution to the budget deficit last year.
"The construct of sequestration is, if politicians fail to do their job in the supercommittee, the penalty was to destroy the military. We got this wrong. We should fire the politicians, keep the soldiers," Graham said. "So I believe the American people are going to be outraged when they hear what comes the military's way because we couldn't get our act together in cutting $1.2 trillion in over a decade."