Yesterday, Senate Finance Committee members Max Baucus (D-MT) and Chuck Grassley (R-IA) released what they were calling a jobs bill, an $85 billion piece of legislation composed of tax incentives for businesses to hire as well as a handful of extenders to expiring tax provisions (that had nothing to do with job creation). Sens. Byron Dorgan (D-ND) and Dick Durbin (D-IL) had been working on a jobs package, but as Ezra Klein put it, “the Finance Committee wants control of the process, so it’s trying to muscle its way in front of them.”

The Baucus/Grassley bill was roundly panned by the rest of the Democratic caucus. “It looks more like a tax bill than a jobs bill to me,” said Sen. Sherrod Brown (D-OH). So Majority Leader Harry Reid (D-NV) scrapped it in favor of a $15 billion bill with four pieces: a payroll tax break, and one-year extension of highway funding, an extension of the Build America bond program, and a business tax break for equipment expensing.

Republicans, who were keen on many of the tax provisions in the Baucus/Grassley bill, immediately cried foul, complaining that Reid was undermining economic recovery with his actions. Grassley spokeswoman Jill Kozeny said that Reid “pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”

But it’s funny that the GOP suddenly feels that the legislation is must-pass to boost an economic recovery considering that earlier in the week they said that it wouldn’t create a single job:

Kyl, a member of Finance, said he most definitely “would not call it a ‘jobs bill’,” though…“No, I dont call that a jobs bill,” Kyl said emphatically…”All of that has to be done, but it does not create one job.”

And even though they readily admitted that the bill was full of stuff “that has to be done,” Republicans were placing all sorts of conditions on their support, including unanimous consent to vote on a huge cut in the estate tax that would give billions in tax breaks to the heirs of wealthy families.

So Reid was wise to pitch the Baucus/Grassley bill overboard and to say that he’d revisit the tax extenders later. Even before it came out, economic analysts and members of the administration were saying that it would “only work on the margins” in terms of boosting employment. The New York Times’ editorial board noted that “it was not even in the same league as the modest House-passed $154 billion jobs bill.” There was no reason to allow the GOP to wring out concessions in order to pass a bill that wouldn’t have done anything.

Which isn’t to say that Reid’s $15 billion effort will do all that much either. With the administration’s Council of Economic Advisers estimating that unemployment is still going to be above eight percent in 2012, a much more concerted effort is necessary, including aid to states and some sort of direct job creation.

Last week, Senate Banking Committee Chairman Chris Dodd (D-CT) said that he was going to go ahead and draft a financial regulatory reform bill without Republican support, after talks between him and ranking member Sen. Richard Shelby (R-AL) reached an “impasse.” “We were stuck,” Dodd said. “I just feel like we weren’t getting anywhere.”

But Sen. Bob Corker (R-TN) has now stepped forward as the new Republican face of regulatory reform, telling Shelby and Minority Leader Mitch McConnell (R-KY) that he is going to work with Dodd to craft some sort of bipartisan agreement. “I feel like it’s an issue we need to deal with,” Corker said. “A bipartisan solution is going to be far better for the American people.”

One of the main hurdles that Dodd and Shelby couldn’t get over was whether or not to create an independent Consumer Financial Protection Agency (CFPA) that would be on equal footing with the bank regulators. The CFPA is an administration priority, but Shelby — along with the rest of the Republican caucus — has been blasting the agency as “folly and dangerous.”

When it looked like he would have to go it alone, Dodd seemed prepared to include the agency in his bill. However, Corker seems to have other ideas:

I know Sen. Dodd knows and everybody else knows that a free-standing agency is a non-starter on our side of the aisle. But I think there is a way to have a program to deal with it in another fashion that doesn’t bump up against or undermine the safety and soundness function of a bank or a regulator looking at a bank.

So if the main sticking point in the effort has already been called a “non-starter” by the GOP’s new point man, what’s the hope here? Corker is taking the same line on the agency that other Republicans have, claiming that breaking consumer protection away from regulating banks for “safety and soundness” is a problem. Rep. Barney Frank (D-MA), who managed to move legislation creating an independent CFPA through the House, ably took on this line of thinking:

No one familiar with the track record of the bank regulatory agencies with respect to protecting consumers can deny the need for an independent agency if we are going to have effective consumer protection. Bank regulators have traditionally treated their responsibilities for consumer protection as a second priority. Those who cite safety and soundness as a major reason to oppose increased consumer protection have it exactly backwards. In fact, the inability to protect consumers from abuse was a major cause of the financial crisis from which we are just emerging.

In the latest ABC News/Washington Post poll, 62 percent of respondents (and a majority of each party) said that they favored stricter federal regulation of banks and financial institutions. But Dodd seems to be heading down the same road that Sen. Max Baucus (D-MT) went down with his “Gang of Six” health care negotiations: stalling a bill in the hope that a Republican will buy in sometime.