Updated from 7:12 a.m. EDT

Even with his original $726 billion tax-cut plan, President Bush faced a tough sell on its ability to jump-start the economy. But the much smaller compromise plan Congress hammered out this week -- riddled with phase-in and sunset provisions -- makes his economic-stimulus vision a lost cause.

"It's a strange way to make tax law," says Tom Oschenschlager, partner at Grant Thornton in Washington. "The whole idea was to stimulate investing and consumer spending, but that's never going to happen."

Don't believe the critics of the plan? Consider President Bush's own assessment a month ago: He claimed that a $350 billion tax cut was far to small to stimulate the economy. Now, though, he says he supports the bill that will be approved by Congress.

The problem is twofold: Many argue that tax cuts never stimulate the economy, but even those who think they do acknowledge that the impact lessens when the tax cuts come with an expiration date. And virtually all of the breaks for individuals in the new joint plan from Congress will simply disappear in the next few years.

Congress has increasingly turned to these "sunset" provisions in an effort to shoehorn tax breaks that would be far too costly if made permanent. By building in an expiration date, the plan's cost can be minimized and future legislators left to wrestle with making the breaks permanent or allowing them to expire, which could then seem like a tax hike.

And given the Senate's hard-and-fast refusal to pass a tax-cut package that took more than $350 billion out of the federal budget, such machinations were necessary to minimize the apparent cost of the provisions eventually included in the plan -- not the least of which is the reduction in tax on dividends and capital gains.

"There's not a financial or economic calculus that's at work here," says Jim Cusser, who manages a $1.5 billion bond portfolio for Waddell & Reed and has long advocated for a repeal of the tax on dividend payments. "It's a purely political calculus."

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