Back in February, President Obama created a debt commission by executive order, which is tasked with crafting a proposal to reduce long-term deficits through a combination of revenue increases and spending cuts. Theoretically, the package crafted by the commission will then be voted on by Congress, but in order for it to ever see a vote, 14 of the 18 commission members need to approve it.

One of the concerns about the commission is that it will inequitably favor spending cuts (particularly to entitlements like Social Security) and eschew common sense tax increases. This is particularly worrisome because the commission includes some members — like Reps. Jeb Hensarling (R-TX) and Paul Ryan (R-WI) — who fearmonger about any kind of tax increase.

Today, at the America’s Future Now conference, Rep. Jan Schakowsky (D-IL) — who is also a commission member — said that success for the commission is “unlikely” because conservatives members are refusing to consider tax increases. In an interview with The Wonk Room, she said that she’s worried conservatives are giving “some lip service” to increasing revenue, but “are closing that door and taking it off the table” when it comes to specifics:

[Conservatives] give some lip service to ‘everything should be on the table,’ then, when it actually comes to what kind of revenue can we raise, are closing that door and taking it off the table, and saying that they’re not really willing to consider those things. The problem, in their view, is all about spending, and of course, that’s not the case. Actually, discretionary spending has been pretty darn flat over the years. We’ve seen a growth of wealth among the wealthy already and flat income for ordinary people…It may mean that the commission really deadlocks.

Watch it:

Currently, taxes are the lowest that they’ve been in 50 years, and the U.S. has the fifth lowest taxes as a share of GDP among economically developed nations. Even if we tried to balance the budget entirely on tax increases (which no one is suggesting), the United States would still be in the bottom ten. Balancing the budget entirely on the back of spending cuts, meanwhile, would require draconian reductions that will have the greatest negative impact on the most vulnerable populations.

For her part, Schakowsky said that its unconscionable that Congress is considering spending billions of dollars to cut the estate tax, at the same time that the debt commission is putting Social Security cuts on the table. She also pushed back against the notion that deficit reduction should take precedence over job creation in the short-term. “Leaving our children debt free — does that mean leaving them sick, uneducated, and unemployed?” she asked.

Before it adjourned for its Memorial Day recess, the House of Representatives passed a scaled down tax extenders bill, that didn’t include extensions of COBRA health insurance subsidies for unemployed workers, or an extension of FMAP funding to help states meet their Medicaid responsibilities. The bill also only extended unemployment benefits through November, instead of December as had been originally planned.

Despite 9.7 percent unemployment, and long-term unemployment at record highs, the bill was cut down because of concerns regarding its effect on the deficit, as only part of it was offset by revenue raisers. A group of Blue Dogs and freshman Democrats, as well as lockstep Republican opposition, helped to produce legislation with significantly less impact.

Today, The Wonk Room posed a couple of questions regarding such deficit hysteria to AFL-CIO President Richard Trumka, who appeared at the America’s Future Now conference to advocate more robust job creation measures from Congress. Trumka said that those more concerned with the deficit than the fact that 15 million Americans are currently out of work have “been reading too much fiction or they have their head in the sand”:

We do not have a short-term deficit crisis, we have a short-term jobs crisis in this country. And anyone that doesn’t believe that has either, I think, been reading too much fiction or they have their head in the sand. Every economist I know says we have a jobs crisis, and yet the people on [Capitol] Hill say we can’t really fix the crisis, we have to worry about deficit reduction.

Watch it:

Later on, when ThinkProgress asked why Washington is so focused on deficits when the country is much more concerned with unemployment, Trumka blamed “timid leadership.” “Timid leadership gets any kind of pushback, they say we’ll stop. What they need to do is stand up and explain that if you really want to cure deficits, put people back to work,” he said.

It’s true that short-term concern over the deficit and favoring deficit reduction over job creation is counterproductive. As CAP’s Michael Ettlinger and Michael Linden wrote, in the face of the Great Recession, short-term deficits “are both inevitable and highly appropriate at a time when the economy is weak.”

It should also be noted that, according to a recent NBC News/Wall Street Journal Poll, Americans do not prioritize deficit reduction over job creation. Only 5 percent of respondents to the poll cited it as their top concern, while 35 percent said job creation is the most important policy priority of theirs.

This week, with Congress back from its Memorial Day recess, the conference committee tasked with reconciling the Senate and House versions of financial regulatory reform will begin to meet, with the goal of putting a final bill together by July. According to House Financial Services Chairman Barney Frank (D-MA), three big areas will have to be hashed out: Sen. Blanche Lincoln’s (D-AR) provision forcing banks to spin off their swaps desks, the Volcker rule, and Sen. Dick Durbin’s (D-IL) new interchange fee regulation.

But one other area will also have to be addressed: the ways in which the bills approach capital requirements for big banks. The Senate version includes an amendment from Sen. Susan Collins (R-ME) that would place a floor under capital requirements (that regulators couldn’t go below) and increase capital requirements in accordance with bank size and risk (so bigger, riskier banks would need to have more money on hand to cover potential losses).

The banks, of course, don’t like this idea very much:

A push to require bank-holding companies to hold better capital has sparked a lobbying drive because it would force the industry to raise as much as $1.3 trillion from its balance sheet if the changes were to be enacted, according to one estimate…“It would cause very significantly to decrease the availability of loans,” said Edward Yingling, president of the American Bankers Association.

Collins is reportedly working with the financial industry to “ameliorate their fears,” but hopefully she isn’t giving in to a lot of demands. After all, her amendment is one of the most useful pieces of the Senate bill.

Throughout the financial reform debate, the banks have claimed that every proposed regulation would hinder credit and decrease the availability of loans. The same threat, used over and over, begins to ring a bit hollow. And it’s a simple fact that, prior to the economic meltdown, big banks were incredibly overleveraged, and did not have enough funding on hand to cover their losses, which necessitated federal intervention. AIG, for instance, could not come close to covering the losses on its vast array of credit default swaps.

Collins’ amendment would remove some regulatory discretion by mandating minimum levels of capital. As regulators have been complicit in giving big banks the go-ahead to leverage up to extraordinary heights, this is a good idea. FDIC Chairman Sheila Bair has called Collins’ amendment a “critical element” of financial reform that will “ensure that risks undertaken by the parent company and the nonbank subsidiaries do not compromise the safety and soundness of insured banks.”

As Nobel Prize winning economist Joseph Stiglitz wrote in Politico today, “every provision that levels the playing field [between big and small banks] — imposing additional restrictions on risk-taking, setting higher capital requirements or imposing additional fees — needs to be retained.” And indeed, it makes sense that larger banks that are taking more risk be subject to higher standards, as their implosion is able to drag down the wider economy.