Republicans bargain hard over fiscal cliff Republicans in Congress are demanding structural changes to popular government pension and healthcare schemes, including higher eligibility ages, in any deal to avert the fiscal cliff. The conditions will be tough for President Barack Obama and his Democratic party to accept as negotiations gather urgency over the next few weeks. Republican leaders, and even some rank-and-file conservatives, have recently softened their opposition to higher taxes and embraced Mr Obama's request for greater revenue in any agreement. The moves have offered hope that the political gridlock on fiscal policy that has gripped the US capital for the past two years can be broken. But they remain adamant that they will not make any concessions on taxes without a commitment to spending restraint in the largest safety net programmes - which the Democratic base will find extremely unpalatable, raising pressure on Mr Obama. "Republicans" willingness to support additional revenue via tax reform is conditional on it being accompanied by significant entitlement reforms that begin to address the problem of the debt," one aide to John Boehner, the Republican speaker of the House of Representatives and a key figure in the negotiations, told the Financial Times on Sunday. Without such spending controls, any plan to avert the fiscal cliff is not a balanced approach. Congress and the White House have until the end of the year to strike a new budget agreement. If they fail the US economy will be hit by a $600bn combination of automatic tax increases and spending cuts in 2013 - a scenario known as the fiscal cliff which is likely to trigger a new recession. Mr Obama met congressional leaders 10 days ago to discuss a deal but there have been no further top-level meetings since, given the president's trip to southeast Asia, and the congressional Thanksgiving holiday recess. There have been discussions among staff behind the scenes. Although there has been some apparent progress on taxes, a big divide remains. Republicans are accepting the need for more revenue, but insist that it should come from limiting deductions and tax breaks, rather than higher income tax rates on the wealthy, which Mr Obama and Democrats want. Meanwhile, Republican calls for large-scale spending reform create a further complication en route to a deal. Mr Boehner has not laid out precisely which kinds of changes to "entitlement" programmes such as Social Security and Medicare he is seeking, and the aide said there were a "variety of ways in which this can be accomplished." But other senior Republicans have been more specific. Lindsey Graham, the senior Republican senator from South Carolina, said he was willing to break his pledge never to vote for higher taxes as long as higher age eligibility for these spending programmes - as well as means testing to trim benefits for the wealthy - was part of any deal. I do expect them to adjust these entitlement programmes before they bankrupt the country and run out of money themselves. So age adjustment and means testing for both Social Security and Medicare is eminently reasonable," Mr Graham said on ABC's This Week. "I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform," he said. Mr Obama and Democrats have said entitlement spending should be on the table. But they are unlikely to go as far as Republicans are demanding, amid a vociferous campaign by liberal groups and labour unions for Democrats not to betray their principles. Dick Durbin, the second-ranking Democratic senator, told This Week that the Social Security pension scheme should be "set aside" because it is separately funded and does not add a "dime to the deficit." Mr Durbin said reforms to healthcare programmes should be considered but the eligibility age for Medicare should not be raised because of concerns that "there will be gaps in coverage or coverage that's way too expensive for seniors to purchase."