Yesterday, the Senate failed for a second time to advance its tax extenders bill, which extends unemployment benefits for laid off workers as well as various tax credits. The vote was 56-40 (four shy of the required sixty), with opponents from both parties once again citing the cost of the package as their overriding concern. “It’s still not paid for, fully paid for, is it?” said Sen. Ben Nelson (D-NE). “Then nothing’s changed.” “Americans are frustrated with the amount of spending and borrowing that we’re doing around here,” said Senate Republican Leader Mitch McConnell (R-KY).

At the same time that they’re blocking the extenders bill, of course, faux-deficit hawks in the Senate are trying to reduce the tax bill for the heirs of the richest multimillionaires in the country by cutting the estate tax. Sen. George LeMieux (R-FL), who voted against the extenders bill, supports a plan put forth by Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) that would use tens of billions of dollars in spending offsets to cut taxes for the richest 0.2 percent of estates in the country. Yesterday, Sen. Debbie Stabenow (D-MI) slammed LeMieux for his misplaced sense of priorities:

STABENOW: Would you agree that then we should, rather than decreasing the estate tax for less than one half percent of the public, that maybe we should make sure that any dollars there should go back into somebody who doesn’t have a job and maybe help create a partnership with a business to create a job? Would you say that’s a better priority than what’s going to be coming up here not too long on the floor, to try to help folks that already make millions of dollars a year?

LEMIEUX: Respectfully, I think the estate tax issue is a different issue, but I’ll address it…

STABENOW: I don’t think it’s a different issue!

Watch it:

Stabenow’s exactly right that this isn’t a different issue. The notion that the Senate would find $80 billion in spending offsets and then use it to do anything other than job creation is simply maddening.

Deficit hysteria is preventing much needed job creation measures from going forward, but as AFL-CIO President Richard Trumka told me, “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.”

And it’s not like doing more to spur job creation would put lawmakers on the wrong side of public opinion (despite what McConnell seems to believe). According to the latest Gallup poll, 60 percent of Americans approve of additional government spending to create jobs and stimulate the economy. Not that mass approval is always a good reason to do things, but lawmakers who think there will be a vast public blowback to increased job creation efforts might want to think again.

After winning the GOP nomination for the California U.S. Senate race last week, former Hewlett-Packard CEO Carly Fiorina has been quick to tout her chief executive credentials in her race against Sen. Barbara Boxer (D-CA). While claiming to fight for “millions of Californians [that] are struggling without a job,” Fiorina has mounted a fierce defense of her record off-shoring American jobs and has glossed over her rocky tenure at Hewlett Packard.

Portfolio named Fiorina one of the 20 worst CEO’s of all time, saying she was “busy pontificating on the lecture circuit and posing for magazine covers while her company floundered.” And Fiorina’s even gone as far as saying that “of course” she would still cut 10,000 jobs, like she did in 2003, if she were the HP CEO today.

Moreover, the former HP CEO has made a concerted effort to criticize the stimulus package, asserting the economic recovery act “has done nothing” for unemployment in California. In Sacramento on Wednesday, Fiorina reiterated her misguided rhetoric at a press conference held at Rex Moore Electrical Contractors & Engineers, a Sacramento electrical company:

“If you’re a business owner and there are stimulus dollars that might help your customers buy more of your product or might help you, of course you’re going to accept the stimulus dollars,” Fiorina said. “But that is not an argument that the stimulus package has worked because the stimulus package clearly, factually, manifestly has failed because people are losing their jobs for every single dollar that’s out there.”

Interestingly, both Rex Moore and the window-making plant Fiorina’s campaign visited yesterday both benefited from stimulus funds — the first receiving $447,000 subcontract through the program and the latter advertising that customers could receive energy tax credits. The New York Times also reported that there is another California business benefiting from the Recovery act: Fiorina’s former company, Hewlett-Packard. The Times called this “the kind of benefit to private industry that Fiorina says has been missing from the stimulus program. ”

As The Wonk Room’s Pat Garofalo has pointed out, the Senatorial candidate’s “only real solution to anything is to cut taxes. But that doesn’t do much good for those who are already out of work and have no taxable income, and it doesn’t spur demand that will give businesses more customers and thus a reason to expand.”

Additionally, while Fiorina argues “people are losing their jobs” because of the stimulus, she clearly fails to recognize the stimulus’ positive impact in California. Although the Golden State is undeniably still struggling economically, the more than 70,000 jobs created as a result of the stimulus are difficult to ignore. Furthermore, according to the Congressional Budget Office, the Recovery act has already saved or created 2.8 million jobs — an estimated 3.7 million by September.

– Nina Bhattacharya

Across the country, homeowners have been facing foreclosure after seeing their payments on adjustable mortgages increase, while housing prices fell. And according to a report first made in the Palm Beach Post, this problem has even affected U.S. Senate candidate Marco Rubio (R-FL).

Rubio is reportedly facing foreclosure on a Tallahassee home that he co-owns with David Rivera, a Florida state lawmaker. The duo “stopped making payments in February after a dispute about the amount [of the mortgage payment] once the interest-only period ended.” Rubio’s campaign has claimed that the issue has “been resolved,” even though documents do not show that the foreclosure process has been halted.

Rubio, of course, is basing his entire campaign on his version of fiscal conservatism, and has repeatedly criticized the Obama administration (as well as Republicans) for spending money that it doesn’t have:

“It’s not just good enough to say, you know what, we think Barack Obama’s doing a bad job. You’ve got to say what you would do instead. And I think there’s so much to be done, whether it’s stop the growth of the federal government, stop spending money we don’t have.” [CNBC, 1/12/10]

President Barrack Obama’s economic policies are wrong, Rubio said. “We are spending money we don’t have,” Rubio said. [Florida News-Press, 5/13/10]

“Really, in the last 20 years it’s been a battle between the tax-and-spend democrats and the borrow-and-spend republicans. Both parties are guilty of spending money that we don’t have.” [Hotline, 10/23/09]

Of course, if Rubio wasn’t prepared to spend on his adjustable mortgage, he shouldn’t have taken it out. And if he was, in fact, led to believe that he could afford the mortgage or that the adjustment was not as drastic as it was, then he should be pushing for stricter government regulation of the mortgage market through the creation of a consumer financial protection agency.

As the St. Petersburg Times pointed out, “even if the [mortgage] dispute is finalized, it makes Rubio vulnerable to criticism once again about his personal finances. As House Speaker, he charged $16,000 in questionable personal expenses to a state Republican Party credit card, including $135 at a Miami barbershop, and later refunded $3,000 for flights he double-billed to taxpayers and the party.”

Two reforms of the financial sector that have had a hard time getting traction are a financial transactions tax and implementing a levy on the biggest banks to build up a fund that would tapped to resolve a failing financial behemoth. And one of the more commonly used arguments is that the measures would hinder American competitiveness internationally.

Well, it seems that this concern can be somewhat mitigated, as the European Union is ready to jump on board:

“We want a system of levies and taxes for financial institutions to ensure fair burden-sharing and rein in systemic risks,” German Chancellor Angela Merkel told reporters after an EU summit in Brussels yesterday. “We also want a global system.” Europe said it will put up a united front at the G-20, which has refused to endorse a bank tax under pressure from Canada, China and Brazil, three countries with banks that suffered less during the 2008 financial crisis.

As I’ve pointed out before when concerns about international competitiveness were raised, this likely has much more to do with financial services fearmongering than any real intent on the part of financial firms to move. After all, the United Kingdom instituted a .25 percent stock trading tax and still has a vibrant financial industry. Creating such a tax would help prevent events like the flash crash of May, while raising a significant amount of money that could go towards reducing the deficit.

That the EU is going to endorse a levy to build up a resolution fund is interesting, as the conference committee reconciling the financial reform bill in the U.S. Congress has a chance to do the same thing. The House has such a fund in its bill, but the Senate discarded it in order to appease Republicans, who successfully (and falsely) characterized it as a “bailout fund.”

As Federal Deposit Insurance Corporation Chairman Sheila Bair agues, a pre-funded system “has significant advantages over an ex-post funded system.” In fact, an ex-post levy, which is what the Senate relies on, could be dangerously pro-cyclical, as it’s a safe bet that if one large financial firm has failed, others are in trouble. Asking them to cough up to fund their competitor’s failure after the fact could push them closer to the brink.

“I worry about the politics of trying to extract the costs from the industry if it might have a negative effect on the economy — that could become the problem,” said Stephen Lubben, a bankruptcy professor at Seton Hall Law School. The Senate’s mechanism for actually resolving a firm is tighter than the House’s, but it would benefit from the pre-funding mechanism. Maybe the EU’s support will mitigate the concerns of some of the Senate’s conferees (though I’m not holding my breath).