Today, during markup of legislation before the House Financial Services Committee that would create a Consumer Financial Protection Agency (CFPA), Republicans proposed an amendment that would give all of the other federal bank regulators — including the Federal Reserve or the Comptroller of the Currency — the ability to veto CFPA rules that threatened the “safety and soundness” of financial institutions.

Rep. Jeb Hensarling (R-TX) explained that he supported the amendment because the health of a financial institution “ought to trump” concerns regarding consumers, all of the time:

The safety and soundness of the system, taxpayer protection, ought to trump the ability to ban financial products. And let’s face it, I understand the chairman said that this new CFPA would not have the ability to set goals, but if you control the product mix, if you can ban products, if you can modify their terms, of what some have estimated could be as much as 10 to 15 percent of our economy, then yes, I conclude you can adversely impact the safety and soundness of these institutions.

Watch it:

So if it can’t outright prevent the CFPA from being created, the GOP would like to ensure that it’s a toothless agency that can’t stand up to the bank regulators. (Hensarling presents this as “taxpayer protection,” ostensibly suggesting that, if the banks can make money however they see fit, they’ll never need another taxpayer funded bailout.) But the CFPA will only work if it is on equal footing with the bank regulators, with adequate abilities to write and enforce regulations.

This is because many of the products that led to the economic crisis were premised on obfuscation and taking advantage of consumers — credit cards with retroactive rate hikes, mortgages with payments that exploded after a set number of years, or overdraft fees to which consumers are automatically subjected. As Adam Levitan pointed out at Credit Slips, “the market drives the introduction of bad consumer credit products.” “Some of this obfuscation is through fine-print. Some is through product design, as complexity and exploitation of consumers’ cognitive biases can mask pricing,” he wrote.

And these actions are often very profitable, which is why the bank regulators didn’t want to stop the banks from using them. Overdraft fees, for instance, could rake in $38.5 billion for the banks this year. Those billions render the banks incredibly safe and sound, but they come at the expense of consumers. And under the Republican proposal — which will come up for a vote tomorrow — the same exact practices would be allowed to continue, and regulators at the CFPA could do nothing but scream from the sidelines.

At The American Prospect, Tim Fernholz noted that Sen. Chuck Grassley (R-IA) has engaged in a bit of confusing rhetoric regarding regulatory reform. Grassley seems to simultaneously believe that the Federal Reserve should do nothing but monetary policy, but shouldn’t have its consumer protection responsibilities removed and placed within a new Consumer Financial Protection Agency (CFPA).

As Fernholz wrote, “thank goodness Grassley is not on the relevant committee” (the Senate Banking Committee). However, Grassley is not the only one with this contradiction running through his head. Sen. Jim Bunning (R-KY) is struggling with the same thing, and has a seat on the Banking Committee, from which he announced today that he sees “very little chance of getting a consumer protection agency past this committee.” And his reasoning is that the Fed already has consumer protection duties that it simply didn’t use:

In 1994, we handed the Federal Reserve the power to regulate all banks and mortgage brokers on the loans that they make. That’s all of them! In 1994 they didn’t do a thing…Now, why would we write a new protection agency, if they’re not using the power we have to the Federal Reserve to start with?…They didn’t do their job, and now you want to create a new institution because the Federal Reserve didn’t do their job. I say you’re wrong to create a new institution. We should insist that the Federal Reserve does their job.

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But just a few months ago, Bunning declared that the Fed should not be designated as a systemic risk regulator for the financial system because “the Fed has proven they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go.” In fact, he “promised to do everything in his power to stop the Fed.”

So the Fed has proven that it can’t be trusted, but it should still be trusted to protect consumers? There’s an odd dynamic at work here, because Bunning’s diagnosis is spot-on — he just comes to the wrong conclusion. The Fed undeniably failed to police the consumer market, even though it clearly had such powers. It received regulatory authority over mortgage lending in 1994, but didn’t release its “Guidance on Nontraditional Mortgage Product Risks” until 2006. This lackadaisical approach to consumer occurred not just within the Fed, but with all of the federal bank regulators.

Therefore, we should take consumer protection duties away from all of them and place them within a new agency, which will have no mission other than watching out for consumers. But Republicans — who love to hate the Fed the rest of the time, because it plays well politically — are willing to give the Fed another swing of the bat when it comes to protecting consumers.

In September, ThinkProgress dissected how Glenn Beck’s successful character assassination campaign against former White House environmental adviser Van Jones was fueled by Americans for Prosperity’s Phil Kerpen, who had taken credit for notifying Beck of some of Jones’ past comments. On his Fox News show yesterday, Beck followed Kerpen’s lead once again, this time in an assault on net neutrality.

In a segment featuring Kerpen last night, Beck warned his audience that the Obama administration “just might be trying to take over the media.” “This is a big week, isn’t it, for freedom of speech?” Beck asked Kerpen, who said that it was because “the FCC on Thursday is going to decide what the future of the Internet looks like”:

KERPEN: It is a very big week because the FCC on Thursday is going to decide what the future of the Internet looks like, if it looks much like the past 10 years where you have private competition and pretty much people can do what they want on the Internet or whether we have a much, much heavier government hand. And they’re going to take the first step on that Thursday.

BECK: OK. I want to start just real quick – Net neutrality, because it happens on Thursday. This is that everybody should have free Internet, right?

KERPEN: Well, essentially. You know, they dress it up the way they dress up a lot of their things. They turn it upside-down by saying that evil corporations, phone and cable corporations are going to block what we can do block or we can say.

Beck then used net neutrality as a jumping off point to outline how he believed the Obama administration was trying to shut down freedom of speech. “You have a freedom of speech or the government. You can’t really have both,” said Beck. Watch it:

When he introduced Kerpen, Beck described him as “the chairman of Internet Freedom Coalition,” an alliance of conservative groups that opposes all taxes and regulations related to the internet. Kerpen’s group released a Beck-like conspiracy chart today that attempts to expose the so-called “Obama Information Control Hierarchy.” Hours before Kerpen appeared on Beck’s show, he pushed the idea that net neutrality is a threat to freedom of speech in his daily podcast, warning that regulation would lead to “a government-owned and controlled network” and eventual “content restriction” that would “decide that certain speech is out of bounds.”

Beck also appears to have no idea what net neutrality actually means. Science Progress aptly explained it last year:

At the most basic level, net neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet; all content on the Internet is equally accessible, and once a person pays for access to the Internet, they alone get to choose how they use it. This means that providers should not be allowed to block access to certain sites or applications, or charge different customers different amounts for services.

Kerpen, from whom Beck apparently cribbed his understanding of the concept, claims that there is no reason to be concerned about internet service providers blocking access or charging customers differenty. “Proponents of net neutrality rely on the scare tactic that big bad cable and phone companies will block access to Web sites and cause other mischief unless the benevolent federal government rides to the rescue, and soon,” wrote Kerpen on FoxNews.com earlier this month. “But they’ve been ringing this alarm for the better part of a decade and none of the horrors they warn us about have happened.” In fact, in 2007 it was revealed that Comcast had disrupted peer-to-peer file-sharing traffic on its network, leading to an FCC investigation. There was also an incident where “Verizon Wireless denied Naral Pro-Choice America, an abortion rights group, access when the group asked to the carrier to allow Verizon customers to sign up for text-messaging alerts.”

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The Senate Banking Committee held a hearing today to discuss whether or not Congress should extend and broaden an $8,000 first-time homebuyer tax credit that was included in the economic stimulus package. If Congress doesn’t act, the credit will expire on Nov. 30.

The credit’s leading champion has been Sen. Johnny Isakson (R-GA), a real-estate industry favorite who was actually called before the committee to testify. Isakson told the committee that extending the credit is “our way out” of the current recession, and warned that if the credit is not extended, the U.S. economy will tumble into a “dramatic and awful situtation”:

If we don’t do the housing tax credit, in my personal opinion, and extend it through midyear next year and take away the first-time homebuyer means test and raise the income qualification, we will have a dramatic and awful situation in the United States of America from which recovery is going to be even more difficult than we’ve experienced already…I think it’s our way out.

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As I’ve pointed out before, the credit is targeted poorly, and is a very expensive and inefficient way to stabilize housing prices. And Isakson’s proposals to open the credit to all buyers (instead of only first-time buyers) and remove the credit’s income cap will turn it into a government subsidy to rich homebuyers who would have bought their homes anyway.

The National Association of Home Builders, which favors extending and broadening the credit, calculated that such a move will only cause about 383,000 additional sales through 2010. At the expected $40 billion total price tag for the program, this breaks down to $104,400 per additional home sold. And to be fair, the hearing was a bipartisan love-fest for the credit, with both parties lavishing praise onto it.

If Congress is actually worried about a “dramatic and awful situation,” it might want to take a look at some of the latest foreclosure data. After all, in terms of foreclosures, the last three months were the “worst three months of all time”:

During that time, 937,840 homes received a foreclosure letter…That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008…Most disturbing is that all foreclosures — not just repossessions — are rampant despite efforts to corral them. Not only has the Obama administration’s Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

At the end of the day, there’s little chance that the credit will promote additional home sales, and it may even artificially prop up housing prices, prolonging the economic crisis by delaying the housing market from hitting bottom. The credit undeniably makes for great politics, but in terms of policy, the money would be far better spent on foreclosure prevention efforts or neighborhood stabilization.