We are told by the White House that in devising additional job creation efforts, we have to be mindful of the budget deficit. At the same time, the Administration supports efforts to blow an additional $230 billion dollar hole in that deficit, specifically so rich progeny can inherit more money from their parents.

Rep. Earl Pomeroy, a Blue Dog from North Dakota, has introduced legislation to make the estate tax permanent at a different rate than the current law. This will be sold as a way to stave off a repeal of the estate tax in 2010, but would lower the revenue from the estate tax’s return over time. This Dow Jones story explains:

The Pomeroy bill would make permanent a 45% rate on inherited wealth, with the first $3.5 million exempt from the tax. Without congressional action, the tax will be repealed in 2010 and return in 2011 at a 55% rate with a $1 million exemption.

The Pomeroy legislation, backed by President Obama, would cost $233 billion over the next 10 years since it represents a tax cut when compared to current law. House Democrats earlier this year agreed that the cost of the bill would not have to be paid for–as long as Congress passes a law to make sure new discretionary spending or tax cuts are paid for in the future.

This is completely insane. While making the estate tax permanent would add some stability to future budgets, no justification is given for why inheritors between $1 million and $3.5 million should be exempt from the tax. And it makes hollow the concerns of fiscal scolds who want to enact cat food commissions to cut Social Security benefits but have no problem blowing a $235 billion dollar hole in the federal budget.

The kicker to this story is that Pomeroy’s bill may not pass because there are enough Democrats and Republicans in the Senate to block it, because they want to either lower or abolish the estate tax. That includes the self-described biggest fiscal conservative in America, Evan Bayh, who voted for the Lincoln-Kyl amendment to slash the estate tax at a cost of $750 billion dollars over ten years.

Needless to say, on a day when the COBRA subsidy to those laid off from a job is running out, the fact that Pomeroy’s bill would cost as much annually as it would to finance the COBRA benefit for seven million jobless workers is a cruel irony.

It’s incredible how these stewards of fiscal probity are falling all over themselves to give more and more money to the likes of Paris Hilton…