Back in February, Sen. Jon Kyl (R-AZ) threatened to derail an extension of soon-to-expire unemployment benefits if he didn’t receive assurances that the Senate would act on his proposed cut in the estate tax, which would spend hundreds of billions of dollars to reduce tax bills for the richest 0.2 percent of estates in the country. Kyl eventually backed down, but he is at it again, this time with a new target: small business lending.

Yesterday, President Obama called on Congress to pass a $30 billion plan (funded by bailout money that big banks have repaid) that would facilitate lending from community banks to small businesses and also provide them with some tax breaks. Under the plan, “the banks would benefit from a lower interest rate on that capital — as low as 1 percent — if they increase their small business lending by 10 percent over 2009 levels.” Kyl, however, is standing in the way due to his insistence on cutting taxes for multimillionaires:

There was still a chance the Senate Finance Committee would take up an on-again, off-again small-business tax incentive bill in committee this week. Those negotiations have been stymied by Senate Minority Whip Kyl’s insistence on moving an estate tax bill soon, before it gets perilously close to next year’s 55 percent rate and $1 million exemption. He has threatened to offer an estate tax amendment to the small-business bill in committee, while Baucus is working to avert that outcome, which he argues could doom the small-business measure’s chances for bipartisan support.

As a reminder, Kyl wants to institute an estate tax of 35 percent with a $5 million exemption. The estate tax has currently expired, but is scheduled to come back next year at a 55 percent rate with a $1 million exemption, and the House has already approved permanently reinstating the tax at the 2009 level of 45 percent with a $3.5 million exemption. Let’s not forget that it was Kyl who personally scuttled a plan to simply reinstate the estate tax at the 2009 level for this year, which would have given lawmakers more time to come up with a permanent solution.

Kyl’s cut costs more than $300 billion relative to the current budget baseline, and $60 to $80 billion more than permanently extending 2009 law. And Kyl — along with his co-sponsor, Sen. Blanche Lincoln (D-AR) — are looking for spending offsets for that $80 billion, raising the prospect that Congress may actually raise money elsewhere to pay for a tax cut for the very wealthiest estates in the country. The Center on Budget and Policy Priorities has called the Lincoln-Kyl plan “deeply flawed” and “unaffordable.”

Republicans spend lots of time professing their love for small businesses — and falsely claiming that progressive policies will adversely cripple such businesses — but when push comes to shove, Kyl is making it clear where his priorities lie: with the ultra-wealthy.

Back when the economic recovery package (i.e. “the stimulus”) was being debated, a handful of Republican governors garnered headlines by rejecting various portions of the funding. One of the loudest critics of the legislation was Gov. Rick Perry (R-TX).

At the time, Perry said rejecting the money “was pretty simple for us. … We can take care of ourselves.” “I am so concerned about the belief that has gained a foothold in our national consciousness that the best and only way to solve our nation’s problems is to drown them with taxpayer dollars,” Perry also said, adding that, with regard to the stimulus, Texas should “look a gift horse in the mouth.”

The Texas state legislature eventually pushed Perry to accept the money, but even in his official acceptance letter, Perry wrote that “I believe there are better ways to reinvigorate our economy and believe [the bill] will burden future generations with unprecedented levels of debt.” However, as the Wall Street Journal noted this morning, the stimulus is the reason that Texas currently has a balanced budget:

[T]he economic downturn is catching up with Texas. Sales-tax revenue started falling in February 2009 compared with the previous year, and only started to recover a bit in April of this year. Although Mr. Perry has railed against the federal economic-stimulus program, billions of dollars from that initiative helped Texas legislators balance the current budget.

Texas faces an $18 billion shortfall in its next two-year budget, which amounts to 20 percent of the total. And Perry’s refusal to consider tax increases is setting the state up for draconian cuts. “There is no way that they will be able to come up with $18 billion in cuts,” said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities. “They would have to shut down our prison system.”

Perry is not the only governor to rail against the stimulus while relying on it to balance his budget. Gov. Tim Pawlenty (R-MN) called the stimulus “incoherent” and “largely wasted,” but still used it to fix one-third of his state’s budget hole.

According to the latest report from the Congressional Budget Office, the stimulus not only helped states stave off budget cuts, but also raised GDP by between 1.7 and 4 percentage points, lowered the unemployment rate by 1.5 percentage points, and created up to 2.8 million jobs. This is 250,000 to 500,000 more jobs than projected. CBO estimates that the stimulus will be responsible for up to 3.7 million jobs by September.

Earlier this month, the Obama administration asked that a $23 billion bill to aid states in preventing mass teacher layoffs be included in the war funding supplemental that the Senate is currently debating, and that the House plans to pick up sometime in the not-too-distant future. Since then, Republicans have been unfairly characterizing it as a “bailout,” with the top Republican on the House Appropriations Committee, Rep. Jerry Lewis (R-CA), saying that he would push his party to vote against the overall bill if it included the money for teachers.

The effort’s main advocate, Sen. Tom Harkin (D-IA), has been searching the Senate for votes. However, since he needed sixty votes to add an amendment to the supplemental and no Republicans agreed to offer their support, he relented. But House Appropriations Chairman David Obey (D-WI) picked up the ball and ran with it:

Unable to find any Republican support, Senate Health, Education, Labor and Pensions Chairman Tom Harkin said today he will not offer an amendment on education jobs funding to the FY10 supplemental bill…Instead, the $23 billion in education money, intended to avert hundreds of thousands of teacher layoffs, will be included in the supplemental package being put together by House Appropriations Chairman David Obey, according to a draft.…Obey will hold a press conference Wednesday about the measure, with House Education and Labor Chairman George Miller and Education Secretary Duncan attending.

Senate Democrats said that they would support keeping the measure in the final supplemental bill negotiated between Congress’ two chambers.

States are projected to cut as many as 300,000 teaching jobs this year, as they grapple with budget deficits that amount to hundreds of billions of dollars in the wake of the Great Recession. Lewis’ own state is looking at more than 20,000 potential layoffs alone. In fact, many states are slashing their education budgets to ribbons across the board. As Harold Myerson pointed out, “a recent American Association of School Administrators survey of 453 school districts in 45 states shows how bad things are”:

One-third of the districts are looking at eliminating summer school this year. Fourteen percent are considering going to four-day weeks (last year, just 2 percent did). Fully 62 percent anticipate increasing class size next year, up from 26 percent in the current school year. The teacher-to-pupil ratio, the AASA says, will rise from 15 to 1 to 17 to 1.

One of the criticisms of the Harkin bill is that a spending offset hadn’t been pinned down, and Harkin suggested designating the money as emergency spending to comply with pay-go rules. But I can think of some oil company subsidies that we could do without, if this is the main thing preventing the bill from passing.

Just this week, the Georgia State Board of Education waived caps on class size, the latest in cost-saving moves across the country that could adversely impact students. In light of this, it seems prudent to at least consider a way to keep teachers teaching and class sizes from expanding out of control. But Senate Republicans couldn’t be bothered.