The Senate is expected to finally unveil some new jobs legislation as early as tomorrow, which Sens. Byron Dorgan (D-ND) and Dick Durbin (D-IL) have been working on for the last few months. It will reportedly be in the neighborhood of $80 billion, which means it will be substantially smaller than the $154 billion effort that the House passed at the end of last year.

The Senate bill — which Majority Leader Harry Reid (D-NV) says is part of a “jobs agenda” — will reportedly include small business tax credits, a one-year extension of highway funding, bonds for state infrastructure projects, and a payroll tax credit for hiring proposed by Sens. Chuck Schumer (D-NY) and Orrin Hatch (R-UT).

This makeup reflects the Senate’s evident fear of doing anything that significantly adds to the deficit more than its determination to actually put people back to work. As Rep. George Miller (D-CA), who crafted the House’s plan, said, all of the job proposals that are on the table right now are pretty small-ball compared to the large unemployment problem:

The current proposals, [Miller said] “are not adequate to the scope of the problem. You still have a big gap between the resources we’re offering and where we need to be. Clearly, more has to be done”…”If you’re really going to make a dent in the unemployment numbers, you have to move in the direction of public jobs,” says Miller. “We could create a lot of those jobs — not with a great wage, but a decent wage. We could put people to work in local agencies.”

The Washington Post’s Harold Meyerson agreed, writing that the employment effect of the proposals “isn’t likely to be great.” The hiring tax credit in particular — which would waive the payroll tax for any employer that hires a worker that has been unemployed for 60 days — seems like it will be pretty ineffective. Much like the hiring credit proposed during the stimulus debate, it lends itself to being gamed (think of a restaurant firing its whole wait staff to go and find a bunch of unemployed waiters that it can hire and claim the credit) and has a lot of dead weight cost, as most of the hiring that will take place likely would have occurred even in the absence of a credit (think of the wasteful homebuyer’s tax credit).

And it really can’t be said enough just how weak the labor market is and how pressing it is to get serious about addressing unemployment. By the administration’s own estimates, unemployment will be 9.8 percent at the end of 2010, 8.9 percent at the end of 2011, and 7.9 percent at the end of 2012. That’s too high to let the deficit peacocks get their way and blunt the necessary steps to get people back to work.

In its fiscal year 2011 budget, the Obama administration again proposed a series of measures aimed at closing tax loopholes exploited by multinational corporations, which were never adopted last year. The new set of proposals is actually less ambitious than last year’s, aiming to raise $122 billion over ten years, as opposed to the $210 billion raised in the 2010 budget.

Still, the changes have run into the same wall of opposition. And in the forefront are deficit peacocks in the Senate, who claim to be very concerned with deficits until the prospect of closing tax loopholes arises. For instance, Sen. Jim DeMint (R-SC) said this week that “our nation is staring at a fiscal tsunami that threatens our future prosperity,” while Sen. Chuck Grassley (R-IA) complained yesterday about the “big fiscal hole” in the nation’s budget. However, neither of them thinks that closing corporate tax loopholes is an appropriate way to raise more revenue:

– DeMint “takes exception to Obama’s plan to trim the deficit by raising taxes on corporations, calling it the ‘coward’s way out.’”

– Grassley: We’d be shooting ourselves in the foot to raise taxes on the people who create jobs right now.

Last year, Obama shelved corporate tax reform and has come back with a considerably scaled back package, which even leaves in place the ridiculous “check the box” rule allowing corporations “to legally disregard foreign subsidiaries in tax havens.” This one concession alone amounts to $87 billion in lost revenue over ten years.

To treat all of these breaks as sacrosanct is the height of budget irresponsibility, and shows a fundamental lack of seriousness with regard to addressing deficits. After all, Obama isn’t even proposing a rate increase, but simply collecting the tax payments that are due! And a company has to be paying an effective tax rate of less than 10 percent, with a rate of return of more than 30 percent, just to qualify as “suspicious” under the plan. All in all, it’s a pretty tame proposal that DeMint and Grassley are lampooning.

Currently, just 12 cents out of every federal dollar comes from corporate tax revenue, while “corporate income tax as a share of gross domestic product has fallen from 6% in 1951 to about 2%” in 2008. According to data compiled by the Organisation for Economic Co-operation and Development (OECD), the U.S. raises less in corporate tax revenue as a percentage of GDP than many industrialized nations, including Canada, Japan, Australia, and the United Kingdom.

So it’s one thing to argue about the statutory corporate tax rate, which Republicans also love to gripe about. But it’s quite another to blast deficits while at the same time defending loopholes that allow corporations to pay far below the rate that is currently on the books, which exacerbates deficits going forward and shifts the tax burden onto law-abiding corporations and taxpayers.