The Congressional Budget Office released a paper today, Options for Responding to Short-Term Economic Weakness, that offers an economic stimulus proposal that differs somewhat with what both Democrats and Republicans have been suggesting. CBO argues that a mix of cash rebates -- which many have advocated -- and a "patch" to further extend higher exemption levels under the alternative minimum tax through 2008 -- a curious approach -- would be among the optimal stimulus tools. The paper reasonably says that permanent reductions in tax rates or a payroll tax "holiday" could be ineffective because of processing delays and challenges for employers in implementing the tax cuts. But it goes on to make this questionable assertion (p. 13): To the extent that taxpayers expect that the patch would not be extended again, fixing the AMT for another year could boost consumer demand in 2008 as taxpayers avoid having to adjust withholding and estimated tax payments in calendar year 2008 to reduce what they will have to pay with their tax returns in 2009. Expect that the patch would not be extended again? Is there any basis for such an expectation? And even if passage of a patch did provide a boost to consumer demand, when might all this realistically occur anyway? The assertion is particularly odd because the paper recognizes elsewhere, as almost no one disputes, that "problems can arise if the policy change that is adopted does not affect spending immediately or if there are lags in enacting or implementing policies."