Sen. Jon Kyl (R-AZ) said yesterday that he is willing to hold an extension of unemployment benefits hostage in the Senate unless he is given the opportunity to cut taxes for the very wealthiest estates in the country. And other members of the GOP caucus are not making things any easier.

First, Reid attempted to pass the extension by unanimous consent late last night, only to see the attempt thwarted by Sen. Jim Bunning (R-KY), who blocked the measure because of “a dispute over how it should be funded.” Sen. Richard Burr (R-NC), meanwhile, said that he would support a short-term extension of benefits, but doesn’t want to accommodate Reid’s request for a full-year extension:

If we intend to have some immediate impact on the economy through what we’re doing, why would we be extending unemployment insurance for a year?

This is problematic on a couple of levels. First, providing unemployment benefits is one of the best actions that the government can take in terms of stimulating the economy, because the money is almost certain to be spent quickly. Every dollar spent on unemployment benefits generates more than $1.60 in economic activity, which is far more stimulus than is generated by any sort of tax cut. So the benefits extension, by itself, has an “immediate impact on the economy.”

Second, even if job creation were already booming, it would take some time for the number of jobs lost during the recession to be regained. In the meantime, 1.1 million workers are scheduled to have their unemployment benefits expire in the next month, and 2.7 million are on track to lose them by April. By June, the number is 5 million. Even if the economy starts adding jobs, all of these people are not going to find work right away.

There are currently six unemployed workers for every job opening. And to provide a sense for how long it will take to claw back to full employment, even without compensation for population increases, we’d need to generate 350,000 jobs a month for two full years just to make up the jobs lost in the recession.

So it’s a very steep hill to climb, and in the meantime, people’s benefits are going to run out and they’ll be left with nothing. In fact, some jurisdictions are already sending out letters informing people that their benefits are going to expire. And let’s not forget, the last time an extension was considered, the GOP obstructed it for weeks with procedural hurdles and nonsense amendments about ACORN, and then the bill passed on a 98-0 vote. Perhaps this time they can dispense with the gamesmanship and do what needs to be done?

Since the debate over financial regulatory reform began, the Obama administration has been pushing for an independent Consumer Financial Protection Agency (CFPA), which would be charged with protecting consumers from deceptive and unfair financial products. In early January, when Senate Banking Chairman Chris Dodd (D-CT), who is leading negotiations on financial reform in the upper chamber, seemed to be leaning towards ditching the CFPA, one White House official reportedly told Dodd that an independent agency was “nonnegotiable.”

But according to the Washington Post, “the Obama administration is no longer insisting on the creation of a stand-alone consumer protection agency as a central element” of regulatory reform:

In hopes of quick congressional approval of a reform bill, White House officials are opening the door to compromise with lawmakers concerned about creating a new bureaucracy, according to congressional and some administration sources. President Obama’s economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency.

“In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products,” the Post added.

This seems an odd moment for the administration to signal its willingness to drop the agency, considering that just two days ago, Assistant Treasury Secretary Michael Barr said in a speech that “bringing regulation of consumer financial markets regulation out from under prudential regulators is the most effective way to provide the accountability and effectiveness the system is lacking.” “Real accountability requires a grant of the authority, tools, and resources needed to achieve the mandate. And accountability must be supported by real independence to make and carry out decisions,” he said.

Placing the consumer protection office within Treasury could pose some real problems, even if it has an independently appointed director. Would it be on equal footing with the bank regulators? Would it have independent rule-writing authority? How about enforcement abilities? Does the Treasury Secretary have the ability to overrule the office’s decisions? Unless the agency can independently act to rein in the banks, the consumer protection status quo doesn’t change.

The administration may be trying to float ideas that will get Sen. Bob Corker (R-TN), who has been working with Dodd, on board, since the CFPA has been Republicans’ main point of objection. But Corker and Dodd are reportedly going in a completely new direction, proposing to create a new bank super-regulator, with one division for bank regulation and another for consumer protection. At least until the contours of this deal are known, the administration should keep pressing for an independent CFPA, instead of preemptively giving it away in exchange for nothing.

And at the end of the day, as Tim Fernholz wrote, compromising away vital parts of the legislation in order to secure Corker’s support means the reforms “won’t be worth the time it will take the Senate to pass them.” Dodd should get the best bill that he can onto the floor and dare Republicans (and conservative Democrats) to vote against it.

Yesterday, I asked whether or not Senate Republicans would help expedite the process of extending unemployment benefits that are set to expire at the end of the month, since the last time that an extension was considered, the GOP blocked it for weeks with non-related amendments, before the bill ultimately passed by an overwhelming 98-0 vote.

Well, it seems like at least one Republican is not, in fact, going to ensure that unemployed workers keep their benefits without first trying to cut taxes for the heirs of multi-millionaires:

On Wednesday, a top Republican leader said a deal on the bill would depend on working out the fate of the expired estate tax…Minority Whip Jon Kyl, R-Ariz., said that Republicans will block consideration of the new bill unless they get “a path forward fairly soon” on the estate tax.

“I will insist on an agreement on how to proceed [on the estate tax], if we’re going to have unanimous consent on how to proceed with any of these subsequent bills,” said Kyl.

This is a fairly shocking admission of priorities. 1.1 million workers are scheduled to have their unemployment benefits expire in the next month, with 2.7 million on track to lose them by April, while unemployment is still at 9.7 percent and there are six unemployed workers for every job opening. 6.3 million Americans have been unemployed for six months or longer, which is the most since the government began keeping track in 1948 and “more than double the toll in the next-worst period, in the early 1980s.” Yet Kyl is willing to hold unemployment benefits hostage in order to fashion a tax cut for heirs of the very wealthiest estates.

Due to a Bush-era budgeting gimmick, the estate tax is currently expired, but it is set to come back in 2011 at the Clinton-era level, which Kyl has an intense interest in preventing. His proposal to slash the estate tax rate and increase its exemption would cost $250 billion over ten years, with 99 percent of the benefit going to the heirs of multi-millionaires. Under 2009 law, only 0.2 percent of estates are subject to the estate tax at all.

And it’s partially Kyl’s fault that the expiration happened at all. Back in December, Democrats tried to put in place a temporary extension that would have prevented the tax’s expiration. But Kyl, along with Minority Leader Mitch McConnell (R-KY), blocked it in order to advocate for repealing the tax entirely.