Late last night, the Senate passed, by a vote of 88–5, a one-year increase in the AMT exemption without the offsetting tax increases in the version that passed the House. The rejected House version would take ten years of small tax increases to pay for a one-year AMT patch, leaving open the question of how to pay for next year's patch, but at least that bill follows the letter of the PAYGO rules. The Senate bill is an outright $50 billion tax cut.

That all but 5 Democrats present (the presidential candidates were all safely absent) joined the Republicans in support of the bill seemed to signal that Democrats weren't serious when they agreed that new legislation that would increase deficits—either tax cuts or spending increases—has to be paid for. Republican Senator John Thune (S.D.) called it "…completely repudiating one of their core principles."

What did the Dems get in exchange for their core principle? Another tax cut for the rich. More than 85 percent of the benefit will go to those earning over $100,000. The tax cut is worth more than 1 percent of income for those earning between $100,000 and $500,000, 0.5 percent of income for those in the $75,000 to $100,000 range, and pocket change for everyone else.

As my colleagues and I have repeatedly warned, the AMT is a scourge that should be repealed or reformed, and the annual drama of one-year "patches" is a terrible way to make policy. Reform should be permanent and it should be paid for.

But it's the season of gift-giving, and the Senate has decided to give the gift of lower taxes to the best off among us, paid for by our children. Happy Hanukkah, kids.