On its way out of town, Congress voted to give millions of Americans the fiscal equivalent of coal for their Christmas stockings.

It failed to extend the provision that allows millions of taxpayers to deduct local and statewide sales taxes from their federal income tax returns.

It failed to extend another measure that protects millions of middle-class taxpayers from an Alternative Minimum Tax designed to keep wealthy taxpayers from minimizing taxes with tax shelters.

It voted to raise the cost of student loans for millions of college students by raising interest rates.

And it approved Medicaid and Medicare curbs that will increase health-care costs for many poor and elderly Americans.

Republican leaders proclaimed they had begun to limit spending. But the spending reductions may prove smaller than the tax cuts they hope to pass next month.

GOP leaders held up the tax bills in part because they want to couple them with extension of lower rates on capital gains and dividend incomes that mainly help wealthy taxpayers. They feared it would look bad to vote tax breaks for the wealthy at the same time they were cutting programs that mainly benefit poor and middle-class Americans.

In the end, however, the bottom line will show only a modest reduction in a deficit that has soared during the Bush years. Once again, there will have been no effort to confront the government’s more serious long-term fiscal problems. Taken together, those two things illustrate the dismal fiscal record since President Bush entered office nearly five years ago.

To be sure, events conspired against him. An economic recession arrived about the time he did, and the 9-11 attacks forced sharp hikes for homeland security and defense, including funds to attack Afghanistan and Iraq.

But he also pushed tax cuts that gave the biggest benefit to the wealthy. And his talk of curbing spending has been just that – talk. Bush acquiesced in major increases for education to pass his No Child Left Behind law and won enactment of the biggest new federal entitlement program in years, providing prescription drug coverage under Medicare for seniors.

The GOP-controlled Congress has been a co-conspirator in the collapse of fiscal discipline. Lawmakers have increased sharply the number of specific, mostly “pork barrel” projects for which they “earmark” funding.

And as the Cato Institute noted in a study of “how Republicans became big spenders,” the “Congress has enthusiastically assisted the budget bloat” by increasing inflation-adjusted spending “on the total budgets of the 101 biggest programs they vowed to eliminate in 1995 … by 27 percent.”

Recent economic growth, for which the GOP credits the tax cuts, has produced a short-term decline in the deficit. But as the GOP-run Congressional Budget Office noted last summer, there has been little improvement in “the underlying projections of revenues and outlays for future years.”

Indeed, noted a nonpartisan panel of the National Academy of Public Administration, U.S. fiscal policy remains “on an unsustainable path,” characterized by “explicit and implicit” promises built into current programs and tax laws that will provide “insufficient revenues” to pay for them.

If current trends don’t change, it said, the 8 percent of gross domestic product that now goes for Social Security, Medicare and Medicaid will more than triple to 28 percent by 2050.

Such issues, the panel noted, “cannot be solved by small changes at the margin and almost certainly cannot be eliminated by economic growth alone.” What’s needed is for policymakers and the public “to confront the difficult trade-offs that are required to restore sustainable fiscal policy.”

The administration and congressional approaches to the budget offer little hope for the next three years. And most Democrats have been content to play politics.

What’s needed is nothing less than a massive overhaul of governmental revenues and spending with an eye toward making major changes that will provide a mixture of equal pain and benefit.

The path to the White House might be wide open in 2008 to a candidate who does that.

In the meantime, the best taxpayers can hope for is that, come the new year, at least some of their Christmas coal will be replaced with something more beneficial.