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?