Larison's two cents:
One thing that Tea Partiers definitely did campaign for was tax cuts. Once you add up the extension of all the Bush-era rates, the temporary payroll tax cut, the AMT provision, the estate tax provision, and the various tax credits included in the deal, there isn’t much left that really qualifies as stimulus spending. What I have seen so far from members of Congress associated with the Tea Party movement is hostility to the deal because it does not make all of the tax cuts permanent and fails to abolish the estate tax. Assuming that the deal is passed, what will “sink in” with the Republican rank and file is that approximately 93% of the deal took the form of tax breaks, tax credits or tax holidays. Looked at this way, the deal was designed almost perfectly to avoid making any difficult, fiscally responsible decisions and to indulge the fantasy that there is no economic or fiscal problem that cannot be solved by reducing taxes.
This last point remains to be seen. The real fiscal argument over long-term entitlement and defense cuts and tax reform will occur next year. If we see no realism over the need to raise revenues at some point, Larison will be proven right. I take this deal to be a temporary stimulus package before a more fundamental retrenchment.
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