In Washington, there is one issue on everyone’s minds: the “fiscal cliff.”

With time running out before a massive tax hike strikes on January 1, and wide-ranging budget cuts scheduled to hit at the same time, the economy is bracing for another storm.

Today, five public policy organizations including The Heritage Foundation are presenting their plans to first slam on the brakes before driving off the cliff, and then to reverse course and tackle our massive spending challenges as the federal government moves ever closer to the debt limit.

In 2011, the Peter G. Peterson Foundation launched the Solutions Initiative, giving grants to six organizations spanning the ideological spectrum so that they could develop plans for long-term American sustainability. With the fiscal cliff looming, Peterson’s Fiscal Solutions Initiative II called for updates to address “2012 Post-Election: The Fiscal Cliff and Beyond.”

The participants for this second project are The Heritage Foundation, the conservative American Action Forum, the Bipartisan Policy Center, and the liberal Center for American Progress and Economic Policy Institute.

In an event that the Peterson Foundation is webcasting now, the organizations are discussing their ideas.

To meet this challenge, Heritage Foundation experts updated our Saving the American Dream plan to address the fiscal cliff and then rein in spending. Our plan features a sweeping pro-growth tax reform plan to grow the economy and generate more revenues and a broad restructuring of entitlement programs to provide real economic security to seniors while making the programs affordable.

The plan balances the federal budget within 10 years—without raising taxes—and stabilizes and then reduces the debt. The Heritage plan focuses government assistance to those who truly need it, with a guarantee that no American would have to live in poverty. It would also begin to reduce government back to its constitutionally authorized powers and make defense funding a core priority.

Of the five plans, Heritage’s would reduce government spending the most and would reduce U.S. debt held by the public the most—by a substantial margin.

Right now, this measure of the debt stands at 73 percent of gross domestic product (GDP)—in other words, 73 percent of the American economy. Heritage would reduce the debt held by the public to 28 percent of GDP by 2037, while the next-lowest plan by the American Action Forum comes in at 40.1 percent of GDP. (continues below chart)

Though the Peterson project includes organizations across the ideological spectrum, there are some areas of agreement. For example, “all groups agree that the current level of agricultural subsidies provided by the federal government should be reduced.” Every group would lower spending dramatically from its current trajectory, though they take different routes to achieving this. Three of the five groups would extend the expiring 2001 and 2003 Bush tax policies and then undertake fundamental tax reform. The Peterson Foundation concludes that Congress and the President, though divided, could take a lesson from these organizations coming together:

Although the solutions vary widely, it is clear that the United States does not have to endure a damaging drop off the edge of the fiscal cliff, nor do we have to be complacent in the face of an unsustainable long-term trajectory.

You can watch the live webcast of “Post-Election: The Fiscal Cliff and Beyond” today. The event is already underway.

Read the Peterson Foundation’s full report on the five policy organizations’ plans.

Quick Hits:

  • Showing the new face of warfare, the Israel Defense Forces and Hamas have been trading attacks on Twitter while real-life attacks continue on the ground.
  • “Obama told students in 2004 he supported decriminalizing marijuana, a position that takes on new significance now that two states have legalized recreational use of the drug,” reports the Washington Guardian.
  • Popular talk show host Mark Levin visited Heritage this week to talk about what the election means for constitutional government. You can watch Heritage’s Ed Meese interview him – check out the video here.
  • Heritage’s James Carafano testified before the House Foreign Affairs Committee yesterday on questions raised by the terrorist attack in Benghazi. See what he said here.
  • Remember the original Obamacare debate over the “public option”—government insurance? As Heritage’s Alyene Senger reminds us, “Through its multi-year implementation, the law steadily evolves into a national single-payer health care system.”