Consider the 2015 rate cycle under the new plan

 The Fed would have earned money on the upswing and lost it back on the down swing.

The delever signal would have come from Treasury, it would have raised the inflation tax a bit.  That tax increases the flow of government goods, paying for shortages, and imposes an inflation fee on all tax prices. But the variation in that tax is bound, and it will later be lower than normal.  On net the inflation tax remains what the negotiations set it at, one and a half points.  But that tax pays for government shortages as they appear so it is the constitutional wobble stabilizer, and feeds into revenue sharing. It should always seek a better equilibrium.

The variation in inflation tax should clear in 6-8 quarters.  Accounting takes a leap in accuracy because fiat banks are unencumbered and all of government can use the standard deflator as agreed to in the Fed contract, one and a half,  That is still a loss, but it is always there and in this case we expose ASAP ex post. The key is to know your government multipliers never exceed one and government is the problem, not the solution. So the aim is to keep multipliers as close to one as we can.

Why not have Congress just collect a positive VAT tax and vary its amount? Because it does not partition the fiat banks out of the picture. The VAT tax is an unreliable long path, it is the taxing power of congress. The New Fed needs a contractual basis to force this tax to be as liquid as possible, coinage power in Treasury. This goes back to the Supremes and the sanctity of debt. That clause is enforced by robust fiat debt markets. Which means the coinage power cannot be hampered and the inflation tax is just that nail in the contract. It guarantees the trinity is sustained.