Today, a proposal to change bankruptcy law and allow bankruptcy judges to cram-down mortgage payments for troubled homeowners failed in the Senate by a vote of 45-51. The provision, which was introduced as an amendment by Sen. Dick Durbin (D-IL), required 60 votes to pass. In recent weeks, support for the measure evaporated in the face of furious lobbying by the banking and mortgage industries. Prior to the vote, Durbin — who this week said that bankers “are still the most powerful lobby on Capitol Hill” — took to the floor to decry the banking industry’s influence in the cram-down debate:

At some point the senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate. At some point the people in this chamber will decide the people we represent are not the folks working in the big banks, but the folks struggling to make a living and struggling to keep a decent home.

Watch it:

The American News Project noted that the Mortgage Bankers Association was “in a celebratory mood” at its annual meeting this week, because “a massive lobbying campaign” against cram-down appeared to be working.

Courtesy of Hendrik Hertzberg, we have two Nobel prize winning economists — Joseph Stiglitz and Robert Solow — saying that the “most disappointing” aspect of the Obama administration’s economic plan is that it seems to imply a return to Wall Street’s pre-crisis status quo:

They see the lack of a thoroughgoing “reorganization of the financial system” as the “most disappointing” feature of the new dispensation…Stiglitz said he has the impression that while the Administration’s policymakers are familiar with the approach he and Solow advocate and have discussed it among themselves, it hasn’t been given the kind of in-depth consideration that has been extended to the solutions preferred by the big banks. “When push comes to shove,” Solow said, “politics wins over economics every time. It’s the unanswerable objection: ‘You can’t get it through Congress.’ ”

This ties back to Matthew Yglesias’ concern that “Obama is unduly optimistic about the idea that we can keep the financial industry basically as is, but regulate it ‘better.’” “The pre-crash state of regulation had a lot to do with the political clout and prestige of the institutions in question. If you keep the same institutions in place, I worry that they’ll swiftly recapture the regulators,” he wrote.

This is a very legitimate concern, and one the administration has done little to address. Obama said last night that he expects “to sign legislation by the end of this year that sets new rules of the road for Wall Street.” But more than new rules are needed. There has to be a fundamental change in the nature of institutions, so that they don’t become too big to fail. As FDIC Chairman Sheila Bair said this week:

Investors and creditors have lacked strong incentives to perform due diligence because of the perception that these institutions are so large and complex that the government would have to bail them out. And they were absolutely right…This is unacceptable, and simply reinforces the notion of “too big to fail”…a 25-year old idea that ought to be tossed into the dustbin.

The big banks still have a lot of sway on Capitol Hill, and as MIT professor Simon Johnson said “I think [the administration has] been too deferential to big finance…I think they should be more willing to take them on.” Of course, it would be nice if this weren’t a unilateral fight, but one that the administration and both parties in Congress joined, in the interests of sustainable economic growth. The president can use his bully pulpit to outline a new direction, but it will take a concerted effort across the board to ensure that Wall Street doesn’t gamble the economy into oblivion again.

One of the right wing’s favorite pieces of misinformation regarding President Obama’s budget is that the tax increases he plans to enact on the top two income tax brackets will destroy small businesses. The New York Times’ Caucus blog noted that Sen. Kent Conrad (D-ND) “moved aggressively on Wednesday to counter Republican complaints” in a very original manner:

To prove the Democrats’ point – that only a minute portion of actual small business owners would face a tax increase under the budget plan – Mr. Conrad displayed a poster on the Senate floor featuring a large photograph of former Vice President Dick Cheney. Mr. Cheney, who has been vocally critical of the Obama administration, would qualify as a small business owner under the Republicans’ definition, Mr. Conrad said, even though only about $180,000 of Mr. Cheney’s more than $3 million in income in 2007 came from small business interests.

Conrad then “let loose a final dagger“: “I would say, that’s a tortured definition,” he said.

In reality, only 1.9 percent of taxpayers with small business income file in the top two income brackets, and many of those individuals don’t have employees or earn their income through passive investments. The Center on Budget and Policy Priorities has pointed out that “the $84 of income President Bush received in 2001 from a passive investment in an oil and gas company made him a ‘small-business owner’.”

Today, the National Assessment of Educational Progress released its 2008 Nation’s Report Card, which provides a look at long term trends in the educational achievement of American students.

The report reveals some pretty depressing information. For instance, while both 9 and 13 year-olds made modest gains in math and reading, high school students have been stuck in neutral since the 1970′s (which is when the first assessments were made):

Reading (1971-2008):

Math (1973-2008):

These results eerily mirror America’s college graduation and retention rates, which have also both been stagnant for two decades.

All of this ties back to America’s falling rate of educational attainment, which for young people has slipped to tenth in the world. America’s overall ranking in terms of education has been inflated for some time by the success of previous generations, but in recent decades we’ve been in a holding pattern, while other countries have surged ahead. As Bruce Fuller, an education professor at the University of California, Berkeley, pointed out, “we’re lifting the basic skills of young kids,” but “not lifting 21st-century skills for the new economy.”

One good step towards fixing all of this could be the Fast Track to College Act, which was introduced last month by Rep. Dale Kildee (D-MI) and Sen. Herb Kohl (D-WI). The bill is aimed at streamlining the transition between high school and college, encouraging partnerships between high schools and college, and “exposing [students] to the rigors of college-level work” at an earlier age. The government should also make investments at all levels of the education system to encourage human capital growth and ensure that stagnation doesn’t turn into outright decline.

Yesterday, Sens. Evan Bayh (D-IN) and Mary Landrieu (D-LA) both voiced their opposition to the cram-down bill that may come up for a vote in the Senate this week.

With their respective decisions, Bayh and Landrieu are siding with a slew of special interests — including bailed out banks, goaded by Republicans into not compromising — and standing in the way of economic recovery. As Politico reported, “the primary reason for the banks’ success is simple: money. The industry spent $56 million lobbying Congress last year alone. That can buy a lot of advocates who can win face time with lawmakers to plead the industry’s case.” And that case seems to be taking root.

“My concern about this is that in our appropriate zeal to help the four or five percent of Americans who might be faced with bankruptcy, we don’t unduly raise the costs of homeownership on the 95 percent who never will,” said Bayh, who supported the legislation last year. Implying that cram-down will raise mortgage rates for all homeowners is the Mortgage Bankers Association’s favorite talking point, but it’s simply not true. Incidentally, Indiana has the 13th highest foreclosure rate in the country.

Landrieu, meanwhile, said that “I think we gotta be careful about adopting processes and procedures that would really hurt our community banks.” This is a more legitimate concern, as community banks tend to be closer to their borrowers than giant mega-banks, muck around less with securitization, and retain more servicing fee rights. But as long as banks are working with homeowners to make loan modifications, cram-downs shouldn’t be too much of an issue.

In any case, the need for the cram-down bill hasn’t diminished. According to RealtyTrac, “nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March.” And as Harvard Law professor and bankruptcy expert Elizabeth Warren said this week, cram-downs are necessary because the administration’s housing plan “will not help much in hard-hit housing markets where home prices have fallen 30 to 50 percent below their mortgage principal”:

So-called “cramdown” changes to bankruptcy laws or other legal devices were needed to cut mortgage debt to underlying home values. “It would be the one way to deal with principal that exceeds the value of the loan,” she said. “Without that, we risk a foreclosure mitigation plan that is helpful in the areas of modest need, but not helpful where the problems are acute.”

So in the end, why should the banks and their lobbyists be allowed to hold the plan up?

On Equal Pay Day 2009 — the day on which the average woman’s pay will catch up to a man’s total earnings from the previous year — Change.Org’s Jen Nedeau points us to this stat:

[I]n the United States, women are paid only 78¢ on average for every dollar paid to men. The National Women’s Law Center reports how when President Kennedy signed the Equal Pay Act into law, it made it illegal for employers to pay unequal wages to men and women who perform equal work….At the time of the Equal Pay Act’s passage in 1963, women were paid merely 59 cents to every dollar earned by men. Hmm – so in 45 years, women’s wages compared to men’s have only increased by 19 cents?

Plus, “over the last six years, the wage gap has closed only 2 cents.” That’s slow progress, to be sure.

The Wonk Room has noted before that the difference between the median wages of all full-time working men and women over a 40 year period amounts to about $434,000, on average. Women’s pay is actually less than men’s in every one of the 20 industries and 25 occupation groups surveyed by the US Census Bureau in 2007.

And as Rep. Carolyn Maloney (D-NY) pointed out, “the impact of the wage gap is particularly painful in our current economic downturn as families struggle to make ends meet in the face of stagnant wages and job losses”:

Women make up more than 46 percent of the workforce and, as the number of working women continues to grow, so does the number of families reliant solely on the salaries of women. Since the recession began in December 2007, 3.7 million men have lost their jobs; creating even more families dependant on the smaller pay checks women earn.

The Congress has passed — and President Obama has signed into law — the Lilly Ledbetter Fair Pay Act, which is a good step toward full pay equality. But as CAP’s Jessica Arrons, Heather Boushey and Lauren Smith wrote, more can be done, including passing the Paycheck Fairness Act. The act prohibits retaliation against employees who actively seek knowledge regarding the pay rates of their coworkers, closes “loopholes that employers have exploited to avoid paying fines and provides funding for programs that will train women to negotiate their wages.”

The Washington Post’s Chris Cillizza is reporting that Sen. Arlen Specter is switching parties and plans to run in 2010 as a Democrat:

“I have decided to run for re-election in 2010 in the Democratic primary,” said Specter in a statement…”Since my election in 1980, as part of the Reagan Big Tent, the Republican Party has moved far to the right. Last year, more than 200,000 Republicans in Pennsylvania changed their registration to become Democrats. I now find my political philosophy more in line with Democrats than Republicans.“

Specter’s departure is further evidence that Republicans in Congress have collectively lurched to the right, embracing radicalization and a preoccupation with non-issues like global currency. However, in a statement, Specter emphasized that “my change in party affiliation does not mean that I will be a party-line voter any more for the Democrats that I have been for the Republicans”:

Unlike Senator Jeffords’ switch which changed party control, I will not be an automatic 60th vote for cloture. For example, my position on Employees Free Choice (Card Check) will not change.

Still, Specter’s switch may be a good sign for labor law reform. While Specter’s March announcement that he would oppose cloture for the Employee Free Choice Act dealt a significant blow to the bill’s chances of passing, going forward, his votes in this area are still going to be very important.

It’s worth remembering that Specter was the lone Republican senator to support EFCA in 2007. He has also been a vocal proponent of labor law reform. In a 2008 article for the Harvard Journal on Legislation, he argued that “union representation elections today are often conducted in an environment of intimidation and coercion, and federal labor law provides toothless remedies that fail to deter further abuses by union organizers and employers alike”:

We embrace the conclusion of scholars who contend that “what we need is major surgery on the legal procedure through which employees make their choice about union representation.” The most critical focus of this reform should be protecting the right of employees to freely choose whether they wish to be represented.

So even if Specter is still opposed cloture for EFCA in its current form (and who knows what political constraints he may find himself free of now), he has admitted that the system for forming a union is broken. Furthermore, he may find it very difficult to run in union-heavy Pennsylvania as a Democrat without supporting some sort of labor reform. Does this mean that there is an EFCA compromise in the works?

Yesterday, CBS’s 60 Minutes ran a segment about the coal industry, interviewing Duke Energy CEO Jim Rogers. Duke is one of the largest electricity companies in the country, and it owns dozens of coal plants nationwide. Last month, the company announced plans for a new 800-megawatt coal-fired plant in North Carolina, and it plans to continue building coal plants.

CBS’s Scott Pelley asked Rogers how he feels about global warming given that his coal plants continue to billow approximately 112 million tons of greenhouse gases. “We need to go to work on it now,” Rogers said. “It is critical that we start to act in this country.” Rogers’ solution? “We have to find a way to clean [coal] and use it,” he insisted. Yet Rogers actual plans to fight global warming are essentially non-existent:

Q: How much has Duke Energy invested in carbon sequestration technology so far?

ROGERS: We have not invested any dollars in the technology, per se. We have spent a lot of time and money reviewing and analyzing the various technologies. … While we haven’t spent the money on sequestration technology, we spent the time and energy and we’re going to co-invest with the government when this technology evolves.

“Our goal line is to substantially to reduce our carbon footprint, to decarbonize our business by 2050,” Rogers said. Pelley observed that “not even the industry that warns of the end of our way of life is paying for it.” Watch it:

“Clean coal,” of course, is a myth. Moreover, the pace of Rogers’ plans for “decarbonizing” his plants is pathetically slow. “2050 is too late, we would have guaranteed disasters,” NASA scientist Jim Hansen told Pelley. “We are going to have to phase out emissions from coal in the next 20 years.” “If there’s no action before 2012, that’s too late,” said IPCC Chairman Rajendra Pauchauri.

So how is Big Coal investing its money? ACCCE – a group of 48 big coal and utility companies, including Duke — has a communications budget for 2009 of $40 million, higher than last year. In 2008, the group spent $10.5 million to lobby Congress and roughly 40 percent of ACCCE’s spending that year was on ads trumpeting “clean coal.” Joe Lucas, spokesman for ACCCE, said last month that he “doesn’t know” if coal fuels global warming. In the meantime, Rogers is busy lobbying against President Obama’s green economy plan, which actually would spur carbon sequestration by pricing pollution.

“We know clean coal is not around the corner,” former senator John Warner, who represented the coal-producing state Virginia, told Congress last week. Indeed.

Today, the Washington Post ran an article entitled “Small Businesses Brace for Tax Battle: Under Obama Plan, Some Entrepreneurs’ Bills Would Soar.” The article tells the story of Gail Johnson, who runs a chain of pre-schools and after-school programs and is supposedly going to be so hard-hit by President Barack Obama’s proposed tax increases that she will “consider scaling back operations.”

The Post proceeds to quote Bruce Josten of the Chamber of Commerce and Sen. Charles Grassley (R-IA), who both claimed that Obama’s tax increases are going to cripple business. But in a story with 29 paragraphs — which appeared on the front page of the paper, above the fold — only one paragraph was dedicated to pointing out that the overwhelming majority of small business owners will see their taxes reduced under Obama’s plan. As Dean Baker wrote:

The piece centers on an extremely atypical small business owner who claims that her taxes would increase by more than 19 percent under President Obama’s tax proposals. This person’s situation would describe that of less than 1 percent of all small business owners so it is difficult to understand why such a person would be prominently featured in an article on President Obama’s tax plans.

The Post also dismisses its own lone mention of how few businesses will be affected by stating “whatever the figure, Republicans argue that those who fall into the upper brackets tend to be firms with the greatest capacity for job creation.” The Post fails to note that Republicans who argue this are incorrect.

Here’s the real story. Obama has proposed raising the tax rate on the top two income tax brackets back to the level at which they were under President Clinton, and as the Center on Budget and Policy Priorities pointed out, “only 1.9 percent of filers with any small-business income are projected to face either of the top two income tax rates in 2009.” In fact, of people who file most of their income from their own business, “more than half have income below $30,000 and 80 percent make less than $100,000.”

Meanwhile, in a typical year the businesswoman portrayed in the article, along with her husband, makes more than half a million dollars. This places them in the 0.7 percent of households that file in the top two income tax brackets. While no one likes paying higher taxes, this is not a household that is barely scraping by, assuming that the half million is in net income (since that, and not business revenue, is what gets taxed).

So as Matthew Yglesias pointed out, “any small businessman who’s earning a middle class income isn’t paying in the top two brackets, just as any salaried employee who’s earning a middle class income isn’t paying in the top two brackets.” Someone should remind the Washington Post of that fact.

In light of the spread of swine flu — of which there are now 20 confirmed cases in the U.S. — the Centers for Disease Control (CDC) has issued guidelines for staying healthy and preventing further proliferation of the disease. According to the guidelines:

Influenza is thought to spread mainly person-to-person through coughing or sneezing of infected people. If you get sick, CDC recommends that you stay home from work or school and limit contact with others to keep from infecting them.

That seems like incredibly prudent advice. Unfortunately, staying home due to illness is simply not possible for a large number of Americans.

Currently, nearly 50 percent of private-sector workers have no paid sick days. For low-income workers, the number jumps to 76 percent, and climbs to 86 percent for food service workers. These workers have to decide between the health of themselves and their co-workers, and the wages that they lose by staying home.

Clearly, sick employees going to work contributes to the spread of diseases like swine flu. But there is also an economic cost to ill employees going to work under any circumstances. According to the National Partnership for Women and Families, “when sick workers are on the job, it costs our national economy $180 billion annually in lost productivity. For employers, this costs an average of $255 per employee per year and exceeds the cost of absenteeism and medical and disability benefits.”

As Yelizavetta Kofman pointed out at the Huffington Post, “of the top 20 economies in the world, the United States is the only one that does not have a national standard for paid sick days.” This could be remedied by the Healthy Families Act, which Sen. Ted Kennedy (D-MA) and Rep. Rosa DeLauro (D-CT) plan to reintroduce in Congress next month. The bill would “guarantee workers up to seven paid sick days a year to recover from an illness or care for a sick family member.” And if it helps prevent the spread of illnesses like swine flu, even better.

Yesterday, Sen. Harry Reid (D-NV) announced that he plans to bring the long-delayed cram-down bill — which would allow bankruptcy judges to “cram-down” mortgage payments for troubled homeowners — to the Senate floor for a vote next week. However, it will reportedly be introduced only as an amendment, a form in which “it appears likely to lose.” In fact, Sen. Bob Corker (R-TN) has gone so far as to pronounce cram-downs “dead.”

So what is happening to this common sense proposal to address the housing crisis? First, it has been caught in a web of special interest lobbying. Various banks and credit unions have been involved in the negotiations, with different parties walking away from the table at one point or another. One lobbyist opposing the bill crowed about the mess, saying that “chaos is good.” Republicans have also been staunchly opposed to the bill, spreading various falsehoods about its effects.

While not completely necessary, it would have been helpful for the banks to support cram-downs. But Republican senators apparently pushed bailed out banks — that are operating thanks to taxpayer money — to not accept any compromises on the measure. According to CongressDaily:

GOP senators had put pressure on three big banks that were left negotiating — Bank of America, JPMorgan Chase and Wells Fargo — not to give in, according to sources. They were concerned the three lenders might agree to a compromise like Citigroup did earlier with [Sen. Dick Durbin (D-IL)], especially as they face pressure to strike a deal with Democrats because of other criticism leveled at them, including their use of Troubled Asset Relief Program funds, credit cards and mortgage lending practices. Citigroup is still feeling the wrath of GOP leadership.

JP Morgan, Bank of America, and Wells Fargo are all TARP recipients, and may have been enticed by Durbin’s offer to attach cram-downs to a bill raising the FDIC’s deposit-insurance limit. So which is worse here? Banks accepting taxpayer dollars while fighting against a measure meant to help taxpayers, or GOP Senators pushing them to continue doing so when a compromise is on the table?

Ending the tide of foreclosures is a key part of halting the economy’s slide. So as the New York Times editorial board wrote this morning, “Republican senators need to understand that a vote against this reform is a vote against economic recovery“:

As foreclosures add to the glut of unsold homes, house prices will continue to fall. That will lead to more foreclosures — declining equity is a risk factor for default — and more defaults and foreclosures will hamper the banks’ recovery and further constrain credit. And so on.

We were quite surprised to see a Center for American Progress report being cited on the Senate floor by Sen. David Vitter (R-LA) yesterday. Unfortunately, what he said was just another in a string of “fuzzy math” and distortions defending the broken energy status quo and push for more of the same failed Bush-Cheney energy policies that caused the average family’s spending on gasoline end electricity to skyrocket by more than $1,100 per year.

Vitter said:

“According a preliminary estimate based on the Center for American Progress data, 271,000 oil and gas jobs would be destroyed annually by the administration’s proposed new taxes and fees on energy.”

Watch it:

This is a totally fabricated distortion of our 2008 report, “Green Recovery: A New Program to Create Good Jobs and Start Building a Low-Carbon Economy.”

We wondered where Vitter got it — it turns out this talking point has been circulating for some time, appearing in a document put out by the American Petroleum Institute, in a messaging memo from the oil-backed group Freedom Works, and on a set of talking points hosted on ConocoPhillips’ web site.

The point is a complete distortion of our data (nothing new for conservatives when it comes to energy policy). Our “Green Recovery” report shows that a two-year $100 billion federal investment in a green recovery program, including investments in energy efficiency and renewable energy, would create approximately 2 million jobs. The same amount of money invested in the oil industry would create 542,000 jobs over two years or…271,000 per year.

Apparently, they’ve taken this to mean that President Obama’s energy plan would cost 271,000 lost oil and gas jobs every year, which is simply not what the report says. Read more

Today, the nation’s 19 largest banks will start learning “how they fared in important federal examinations — and which among them will need another bailout from the government or private investors.” The government doesn’t plan to publicly disclose the results of these “stress tests” until May 4.

According to testimony delivered by Treasury Secretary Timothy Geithner on Wednesday, “the vast majority” of banks are well-capitalized. However, the stress tests are going to reveal the plight of the largest banks — which hold most of the assets in the U.S. — and thus are the ones to be concerned with. And if some preliminary analyses are any indication, things don’t look good.

According to analysts at Keefe, Bruyette & Woods (KBW) — which conducted its own stress test on 17 of the 19 banks that the government is examining — the U.S. banking system “might need as much as an additional $1 trillion in capital.” And as Bloomberg found, “bad assets at the biggest lenders almost tripled on average in the past year”:

Pittsburgh-based PNC Financial Services Group Inc. saw nonperforming assets — those no longer accruing interest — jump more than fivefold in the first quarter from a year earlier. They more than quadrupled at U.S. Bancorp in Minneapolis. At 13 of the largest U.S. banks, bad assets increased 169 percent on average from a year ago.

As Kevin Drum wrote “if [the KBW] report is even roughly accurate, I really have no idea how Tim Geithner is going to tap dance his way around the N-word much longer”:

If KBW is right — and their estimate certainly seems to be in the right ballpark — and a substantial fraction of that capital turns out to be needed by half a dozen of the biggest banks, where is it going to come from? The Times report is very antiseptic, but it’s a fantasy to think that any bank “on the verge” will be able to raise private capital, and the Treasury’s TARP money is nearly exhausted. So then what?

Indeed, Bloomberg concluded that banks “may have a hard time persuading investors to give them cash” due to the number of bad assets they hold, while there is increasing concern that Geithner’s plan for removing the assets will unceremoniously flop.

House Financial Services Chair Barney Frank (D-MA) also announced yesterday that “he no longer plans to expedite a bill that would allow the government to place large financial companies into receivership.” So we’re essentially left in no man’s land, with a growing number of assets, limited tools with which to combat them, and no political will to nationalize and break apart the very worst firms.

Today, President Barack Obama is meeting with executives from the credit card industry, in order to advocate “more legal protection for the millions of Americans who use credit cards.” As CBS reported, “the credit card issuers include the same big banks – Bank of America, Citicorp and JPMorgan Chase – that have gotten billions in bailout money meant to stimulate consumer lending.” Other participants reportedly include representatives from Capital One, Visa, and Mastercard.

This comes one day after the House Financial Services Committee approved legislation aimed at curbing abusive practices employed by credit card issuers:

The House measure would restrict card companies’ ability to raise rates on existing customers and ban certain controversial practices, such as applying payments to the portion of a borrower’s balance with the lowest interest rate. It would also bar issuers from charging interest on parts of the balance that were already paid on time, a practice known as double-cycle billing.

The committee vote was 48-19, with 9 Republicans joining all voting Democrats in supporting the measure. 19 Republicans voted against it. The bill (HR 627) will now move to the House floor, where it is expected to pass.

However, according to the New York Times, the proposal is “in jeopardy because of lobbying by banks and their trade groups, particularly in the Senate.” “Having won some early skirmishes by teaming with Republican allies, the banks now appear to have the upper hand and may wind up killing — or at least substantially diluting” the measure, the Times noted.

As Chris at Americablog wrote, “there’s no question more consumers could have been smarter about how they deal with easy credit, but the same could also be said about Wall Street, yet they received a fat bailout.” And as TARP watchdog Elizabeth Warren pointed out, bailed out banks hiking rates and fees amounts to “asking taxpayers to pay twice.”

Indeed, there’s plenty of blame to go around when it comes to the amount of debt Americans are carrying, but that doesn’t mean that curbing abuse is any less important. In fact, the Federal Reserve was planning to implement many of these reforms anyway, and one of the reasons that industry is so concerned by the House’s bill is that “it believes a law would be harder to overturn than a [Federal Reserve] regulation.” So if given the chance, will the Senate vote to protect consumers, or will it bend to the will of bailed out banks?

MSNBC is reporting that General Motors (GM) plans to close “most” of its U.S. factories for up to nine weeks this summer, due to its swiftly growing collection of financial problems:

Two people briefed on the plan say General Motors Corp. will close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles. The people did not know exactly when the shutdowns would occur, but both say they will include the normal two-week closure in July to change from one model year to the next.

But just yesterday, the Associated Press reported that GM spent $2.8 million lobbying Congress — nearly $1 million per month — in the first quarter of 2009, which is actually 15 percent less than it spent on lobbying in the final quarter of 2008. GM also said this week that “it is completing the layoff of 3,400 white-collar workers in the U.S.”

“We’re a part of what is arguably one of the most regulated industries and provide a voice in complex policy discussions. We meet strict reporting requirements and our spending is reflective of the breadth of issues that affect our business,” said GM spokesman Greg Martin. But it’s worth asking: How many days could GM keep some factories open with that money? How many workers could have earned just a little bit more in wages if that lobbying hadn’t occurred?

As we’ve noted before, the business lobby has gone into high gear to defeat the Obama administration’s proposal to stop allowing corporations to defer taxation on profits they make overseas. “This one hits the bottom line of companies more than any other issue right now. We have to defeat it,” said Ralph Hellmann, the lead lobbyist for the Information Technology Industry Council.

With that in mind, it’s worth looking at how corporations use this deferral to avoid paying taxes. And courtesy of the Wall Street Journal, we have the amount by which some corporations lowered their effective tax rate in 2008 thanks to the current law:

Remember, the statutory rate that the right-wing is always up-in-arms about — but which few corporations actually pay — is 35 percent. But General Electric was actually able to lower its effective rate all the way down to 5.5 percent, due to its use of deferrals, tax havens, and other intricacies of the corporate tax code.

According to a report from the U.S. PIRG Education Fund, a $100 billion annual tax burden is shifted to US-based individuals and companies thanks to corporations stowing their profits offshore:

Over ten years, an estimated $1 trillion in revenues is lost due to the use of tax havens and the government must make up for this shortfall. This diversion ends up being shouldered by other companies and taxpayers and is transferred as higher debt for future generations. The recent Senate Budget resolution concluded that the problem of offshore tax havens “means that honest taxpayers face a higher burden.”

And the Oxford University Centre for Business Taxation has found that corporations allowed to defer taxation on offshore profits will leave that money offshore regardless of their home nation’s tax rate. Indeed, when given the opportunity to bring this money back to America at a lower tax rate in 2004, corporations used most of the money “to buy back stock from shareholders, not to invest in domestic operations.”