I'd change the voting system to one of the plurality voting systems. Our current "majority-rules" system not only encourages two parties, it encourages the party in power to move farther to the extremes. It discourages centrist candidates and it discourages centrist ideas.

In a pluraility system, most people wouldn't get the candidate they prefer, but they'll get a candidate they feel okay about. It also allows multiple parties to coexist. You'll have the option to choose a party that better fits your desires.

I know a lot of people that don't quite fit with either party - a fiscal conservative that is pro-choice, pro-gun and supports gay marriage doesn't feel comfortable in either party. And many people don't have an extreme view on other issues. For example, most people I know think that there should be some gun laws. Not many are in the extremes of bannng all guns for everybody or allowing everybody to carry any gun at any time. (not that I haven't met the extremes, but most people are somewhere in the middle). Likewise on many other issues.