Our elected leaders are failing our nation. Partisanship and short-sightedness halt progress toward fiscal austerity. Businesses are suffering from economic uncertainty and instability. So, too, are American workers, as unemployment numbers continue to be high. Business investment remains tepid. Without fundamental changes and sound, long-term policies, our economy will continue to falter.

We need to set a course soon. The state of our nation and economy require purposeful engagement by Congress and the president, along with energy, thought and planning to produce short- and long-term strategies to restore and sustain a healthy American economy. To achieve progress, all sides must compromise or every American will suffer the consequences.

Congress must act in the next two weeks to avoid a repeat of economic and financial shocks. First, the debt limit must be taken off the table as a negotiating tactic. Efforts in the near-term must focus on replacing the across-the-board spending sequester with balanced revenue increases and better-crafted spending cuts.

Congress can consider any one or more of a wide range of alternative revenue increase provisions, such as repealing unnecessary “tax extenders” outlined within the recently enacted American Taxpayer Relief Act, increasing the federal gasoline tax, raising the excise tax on alcohol and taxing “carried interest” as ordinary income. Spending cuts should focus on Medicare, a major cause of our nation’s projected long-term budget problem.

Many alternative policies, both entitlement changes and minor revenue increases, can achieve the sequester’s first year of deficit reduction spread over 10 years, and will not derail economic recovery.

Second, the Congress and the president should commit to overhaul Social Security. Both sides agreed last year that changes are necessary, and we believe that the prospects for success this year are high. A comprehensive approach to an overhaul could incorporate changes such as a strengthened minimum benefit and help for very long-lived beneficiaries, which would protect or even improve the status of the neediest elderly. Success on this front would give a cynical and disappointed public a new measure of confidence that Washington actually can address their problems.

Finally, following tangible progress this year, the Congress and the president should proceed to the broader task of Medicare, Medicaid and a tax overhaul, the roots of our long- term debt problem. Consider changing Medicare Advantage with better choices and incentives for higher-quality health care at lower cost. Make health exchanges from the 2010 health care bill stronger, more efficient and less costly by expanding their base of enrollees. Set the lowest tax rates possible and broaden the tax base.

Our budget problem is overwhelmingly long term in nature. We have large deficits now, caused in part by the weakness of the economy. Extraordinary action to reduce deficits now could reduce demand and weaken the economy further, possibly leading back to a recession. Still, deficits today pile up debt that must be serviced in the future — a dilemma created by a failure to keep the budget on the straight and narrow.

A two-year approach to solving our lingering budget and deficit challenges, with a limited target for the remainder of this year, would both increase the odds of success and decrease the risk to the still-shaky economic recovery. A sincere, serious plan will give businesses the confidence they need to once again invest in the U.S. and grow jobs. It is time for action and it is past time for compromise. We call on the Congress and the president to do what it takes to set our nation on a path to economic stability.

Steve Odland is CEO of the Committee for Economic Development. Joe Minarik is senior vice president and director of research at CED and former chief economist at the Office of Management and Budget.