Chuck Grassley has offered a peculiar argument about the so-called TARP tax:

Any money raised from the TARP tax would have to be used to pay down the deficit. If a TARP tax is imposed and the money is simply spent, that doesn’t repay taxpayers one cent for TARP losses. It’s just more tax-and-spend big government, while taxpayers foot the bill for Washington’s out-of-control spending.

But of course money is fungible, as Ezra Klein explains:

Grassley is, I guess, trying to protect against Democrats trying to use TARP to fund new priorities, but that conversation has to be about whether we want to spend money on those new priorities. Imagine two worlds: one in which Congress passes a $50 billion jobs bill that the TARP tax funds, and one in which it passes a $50 billion jobs bill while the TARP tax is paying down the deficit. Those two worlds are, of course, the same. The issue is total government spending, not which dollars pay for which part of the government’s spending. [Emphasis added.]

This is absolutely right. And that is why conservatives raised the docfix and the AMT fix and other long-term fiscal challenges during the debate over PPACA. The fact a number of tax increases, long-term care premiums, and cost-savings in the student loan program and Medicare cuts were earmarked for one set of spending priorities shouldn’t mask the fact that the real issue is total government spending, not which dollars pay for which part of government spending.