On the right there is growing resistance to the tax deal Republican leaders negotiated with President Obama. The deal trades another extension of the Bush tax cuts for something like $500 billion in new spending and a small cut to the payroll tax (it’s devilishly hard to find any concrete details on the plan online – can anyone out there help?). The new spending virtually represents a second stimulus. Much of it is an unemployment insurance extension, but apparently there is a ton of pork as well – ethanol subsidies, wind subsidies, etc.
The bottom line is that the deal blows up the deficit even further. When will Republicans realize that spending is the problem, not tax rates? Spending will have to be paid for in taxes sooner or later. If Republicans really believed their fiscal-conservative rhetoric, they would oppose any deal that increased government spending at all. Say it with me, Republicans: “every spending increase is a tax increase.”