A deal to avoid the “fiscal cliff” should include entitlement reforms as well as new revenues — but not higher tax rates — Sen. Kelly Ayotte (R-N.H.) said in the GOP’s weekly address.

Republicans have warmed to the idea of new revenues since President Obama’s reelection, but lawmakers are still divided over whether to raise tax rates on the wealthy or find money elsewhere.

{mosads}“Tax reform that eliminates wasteful tax preferences to generate revenue will help bring fairness and efficiency to our tax system. This approach makes more sense than raising tax rates—which will harm nearly a million small businesses and cost hundreds of thousands of jobs,” Ayotte said. “As a reminder, just two years ago, President Obama said that raising taxes would be unwise given the weakness of our recovery. That’s as true now as it was then.”

Ayotte called the fiscal cliff — a combination of tax increases and deep spending cuts — a “test we cannot fail,” saying Republicans and Democrats must work together to find a way out of a situation they created.

“Washington can’t keep ducking the tough decisions. And the fiscal cliff we’re headed toward provides an opportunity for both parties to change our country’s irresponsible spending path,” Ayotte said.

Congressional leaders said they were cautiously optimistic after a meeting at the White House on Friday designed to begin laying a foundation for a deal on the fiscal cliff. While Obama has insisted on new revenues, Republicans have been adamant about deep spending cuts — including cuts to entitlement programs that could be hard for liberals to swallow.

“One thing is clear: doing nothing is not an option,” Ayotte said. “And any effort to address our fiscal crisis without including entitlement reform can’t be taken seriously.”