NEW YORK (CNNMoney.com) -- Last week was such a happy week for deficit hawks. This week, they're back to beating their heads against the wall.
News of a high-cost tax-cut deal between President Obama and the Republicans snuffed out the hope that fiscal experts felt last week when a $4 trillion debt-reduction plan won surprising bipartisan support.
"On the heels of the work of the fiscal commission ...the White House and members of Congress choose to engage in a negotiation that involves adding increasingly larger amounts to the debt? It's utterly exasperating," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget in a statement.
It's not that hawks are against short-term measures that can stimulate the economy. It's that they want any stimulus to be both effective and paired with long-term guarantees of debt control.
"There is probably a legitimate case to be made that the economy needs more stimulus now. But this bill is far from an ideal stimulus package, which would maximize the bang for the buck," MacGuineas said.
David Walker, former U.S. comptroller general, agrees. "While some compromise is appropriate and some stimulus is necessary, this 'deal' is not reasonable from an economic, fiscal and social equity perspective."
Walker laments that the package -- which could cost between $800 billion and $900 billion according to unofficial estimates - includes not only extended tax cuts, but new tax cuts and spending increases "none of which are planned to be paid for with spending cuts in other areas."
Diane Rogers, chief economist of the Concord Coalition, put it this way in her blog EconomistMom.com: "Rather than mutual sacrifice, it is mutual grabbing. We can never manage to 'trade off' -- we only 'pile on.'"
Tax expert Howard Gleckman, meanwhile, called the deal "odious" in the blog TaxVox. And he scathingly summarized the negotiations this way: "You have a bad and expensive idea. I have a bad and expensive idea. Let's compromise and pass both of our bad ideas."
But more substantively, his main complaint is that the deal would wreck havoc with the tax code.
"This package would make nearly the entire individual revenue code permanently temporary, which is horrible tax policy."
On Thursday, Erskine Bowles, a co-chair of the president's fiscal commission, and some of the commission's members are scheduled to meet with administration officials, including the White House budget director.
Bowles isn't likely to mince words. "I'm deeply disappointed that we have this short-term deal and it's not linked to long-term fiscal restraint," he said Wednesday in a conference call with reporters.
On his agenda for Thursday's meeting: he's going to urge both parties and the administration to make a commitment to come up with a long-term debt-reduction plan before lawmakers have to vote to raise the country's debt ceiling sometime in late spring.
Darius Dale is a senior macro analyst with investment research firm Hedgeye Risk Management. More
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