A challenge and an opportunity.

• Author: MacGuineas, Maya

WASHINGTON has yet to find a way of avoiding the fiscal cliff without adding to our mountain of debt. Political gridlock could lead to massive, abrupt, and across-the-board spending cuts and tax increases, which would throw the economy back into recession. Worse, lawmakers might agree to waive deficit reduction measures, in which case our debt would continue to accumulate, our long-term growth prospects would slow, and we would eventually hit a fiscal crisis.

The United States can and must do better. The fiscal cliff is a challenge, but it is also an opportunity to reform our biggest spending programs and our outdated tax code. By replacing the sudden and mindless measures of January 1 with a gradual and thoughtful plan to move the debt onto a downward trajectory, we can place the economy on an upward one.

Such a plan must make real choices, carefully balancing short- and long-term economic growth and aligning both sides of the budget closer to the core values of the American people. It should start quickly but phase in slowly to give the economy time to recover, while restoring confidence in our ability to pay back our debt. It should cut spending on programs we don't need while protecting important investments in our future. And it should reform the tax code to...