If Congress is going to avoid steep across-the-board budget cuts next January, the first sign to look for will be more Republicans willing to consider tax increases as a way of addressing the deficit, says the chairman of the Senate Armed Services Committee.

A handful of Republicans including Sen. Lindsey Graham (S.C.) have indicated they would be willing to see some tax increases through closing loopholes as a way of reconciling the bloated federal deficit.

Scores more have signed on to an anti-tax-hike pledge drafted by former Mississippi Gov. Haley Barbour (R). But that could change, says Sen. Carl Levin (D-Mich.), the head of the panel that sets defense policy.

“You’re going to, I hope, get answers from candidates as to whether or not they are going to stay with the Haley Barbour-type pledge. Or you will see more and more as a few have already done suggesting that they are not going to be bound by that pledge,” Levin says. “You’re going to hopefully see people on the Republican side who have signed those pledges gradually recognize that there can be no deficit reduction and you cannot protect defense . . . without additional revenue.”

As defense companies already begin to feel the effects of the uncertainty caused by a $600 billion cut one quarter into fiscal year 2013, Congress is beginning to take note. Levin foresees a potential “confidence-building measure” that would send a signal to industry that lawmakers can find a middle ground. But what Levin suggested as a meeting point hardly touches on the eventual real compromise that would have to take place to avert the penalty of a $1.2 trillion across-the-board cut come Jan. 2, 2013.

According to Levin, that may be an agreement to fund the extension of tax cuts that both Democrats and Republicans support, such as for research and development.