Both Democrats and Republicans should work through their differences to enhance the United States ' fiscal sustainability, as compromise is an honorable thing, former president Bill Clinton said here on Tuesday.

Speaking at the 2012 fiscal summit of the Peter G. Peterson Foundation, Clinton stressed that a decision is better than an impasse, referring to the current situation that Democrats and Republicans have locked horns over how to reduce the federal government's budget deficit and increase revenue in the election year.

Ditching the no-compromise mentality could help the nation move in the right direction, and both parties should be in line with the changing realities when making the U.S. fiscal house in order, Clinton said.

However, it is more difficult to carry out tax reforms against the background of sluggish economic and wage growth, noted Clinton, adding that if the nation had strong growth and rising wages, people would accept tax rates where they were in his presidency.

At the end of this year, the United States will be confronted with important fiscal decisions including the expiration of the 2001 and 2003 Bush tax cuts as well as the need to raise the public debt limit again, which has been referred to as a "fiscal cliff."