Whether the government gives you a tax credit of $100 towards some specific expenditure or spends a $100 on that same item and thus reduces the out-of-pocket cost to you, the effects are the same: 1) a increased deficit to be funded, 2) distorted incentives.
Edward Kleinbard in the Fall 2010 issue of the journal Regulation argues that these incentives in 2008 amounted to foregone tax revenue of roughly $1.2 trillion per year which exceeds what was raised through the individual income tax ($1.1 trillion) and “is more than twice as much as all non-defense discretionary spending ($528 billion.)”
For example, mortgage interest rate deductions, health insurance premium deductions, and energy tax credits all distort our economic choices (often in regressive fashion) and deepen our budgetary abyss. More of these, which seems the purview of both political parties, does not make our aggregate fiscal situation better, it just means that the day of reckoning when it comes, will be much more difficult than it otherwise might be.