Our guest blogger is Ethan Berman, Economic Policy Intern at the Center for American Progress Action Fund.

There is one consensus among all lawmakers as they push to bring back the jobs lost over the last few years and lower the unemployment rate: small businesses are the key. But Republican leaders are manifesting their desire to help small businesses by pushing for an extension of the Bush tax cuts for the rich (which will help less than two percent of small businesses) while simultaneously filibustering a bill providing tax credits to actual small businesses

But House Republicans have also proposed the Economic Freedom Act of 2010, a plan that embodies the same conservative economic policies that failed over the last decade. Introduced by Rep. Jim Jordan (R-OH) and Rep. Jason Chaffetz (R-UT) and supported by the House Republican Study Committee, it seeks to create new jobs through a number of huge tax breaks for wealthy individuals and corporations. Speaking on the House floor on April 22nd, Rep. Tom Rooney (R-FL) boldly stated:

Americans who have been jobless for over a year will continue down that road if new jobs simply do not exist. And I am not talking about temporary government jobs. Congress must work to stop spending and create a favorable environment for businesses to save money and invest by cutting taxes…This is why today I cosponsored the Economic Freedom Act.

How will the Freedom Act create jobs? It won’t. But among other things it will lower the corporate income tax from 35 percent to 12.5 percent, which as a new report from the Center for American Progress Action Fund and Citizens for Tax Justice shows, will give gigantic tax breaks to large corporations such as:

Not only does this plan lower corporate tax revenue in a system already full of loopholes and tax credits, it is also extremely inefficient in creating economic activity. According to Moody’s Economy.com, a corporate tax cut only generates 30 cents of economic activity for every dollar spent. In contrast, the unemployment benefits extension that the Republicans filibustered earlier this year will result in $1.61 of economic activity for every dollar spent.

No one is arguing that this tax cut wouldn’t generate any economic activity or give companies less incentive to hide profits offshore, but rather that the negative consequences outweigh the positive by a vast amount. This tax break is estimated to add $2.7 trillion to the deficit relative to current law.

President Obama’s American Recovery and Reinvestment Act has saved or created about three million jobs since its enactment according to the Congressional Budget Office. In addition, it has provided tax cuts to more than 95 percent of American households. On the other hand, the Economic Freedom Act will not only cost the country trillions of dollars, but will also send the overwhelming majority of its tax breaks to a minority of individuals and large corporations, when we want money flowing into the hands of the people who are most likely to spend or invest it to create jobs.

To read more about the Republican “jobs plan” and its economic consequences, check out Republicans’ $10 Trillion Giveaway.

In order to justify their blanket opposition to allowing the Bush tax cuts for the richest two percent of Americans to expire on schedule — as President Obama has proposed — Republicans have been trying to claim that they’re looking out for the interests of small business. “To those who are pushing the higher marginal rates, I say the burden is on you to show that you are not harming our primary job creators, small business,” charged Sen. Chuck Grassley (R-IA).

Of course, less than two percent of the small businesses in the country make enough money to file in either of the top two tax brackets, which are the ones in question here, so Republicans have had to find ever more creative statistics to try and prove their small business bona fides. Today, during an interview with Bloomberg News, Senate Minority Leader Mitch McConnell (R-KY) claimed that allowing these tax rates to reset to where they were under President Clinton would affect fifty percent of small business income in the country:

What they propose to do is raise taxes on the top two rates, which would capture about fifty percent of small business income and affect about 25 percent of the American workforce in the middle of a recession. We think it’s a terrible idea.

Watch it:

Now, McConnell doesn’t have the tightest grasp on economic statistics. After all, he said that there’s “no evidence whatsoever” that the Bush tax cuts decreased revenue when there is, in fact, an abundance of evidence showing just that. But still, McConnell either doesn’t understand the data he’s looking at or is willfully distorting it.

This claim, which has also been made by House Minority Leader John Boehner (R-OH), comes from a Joint Committee on Taxation report which states that 50 percent of business income is in the top two tax brackets. But the report in no way shows that this is from small businesses. In fact, it explicitly states “these figures for net positive business income do not imply that all of the income is from entities that might be considered ‘small.’”

That same report actually says that just three percent of people with any business income at all — from a business large or small — will be affected if the top two tax rates increase. That means that 97 percent of people who collect at least some of their income from a business will not see their taxes go up under the President’s plan.

Dylan Matthews dissected the IRS filings of small businesses and found that “the filers reporting small business income who would be affected by letting the tax cuts expire come disproportionately from the ranks of the super-rich.” In fact, the Tax Policy Center has found that the Bush tax cuts actually harmed small business, because they made the tax code friendlier to large corporations and increased the cost of capital (by generating huge deficits). So what cherry-picked stat will Republicans rely on next to try and hide their plan to spend $830 billion on a tax break for the super rich?

Back in December, when Rep. Eric Cantor (R-VA) was asked to explain the Republican’s “big idea” when it came to job creation, all he could muster was “the big idea is to get, to get, to produce an environment where we can have job creation again. And see, that’s where the Obama administration’s agenda so clearly disadvantages the Democrats in this upcoming election in eleven months and advantages us.”

In fact, Republicans have been having an internal debate about whether they should even try to lay out a policy agenda. But last night, Rep. Tom Price (R-GA), chairman of the House Republican Study Committee (RSC), said that the GOP is prepared to produce “positive solution after positive solution,” particularly when it comes to jobs and the federal deficit. Watch it:

CNBC’s supply-side guru Larry Kudlow was impressed with Price’s declaration, saying “sometimes some good old ideas can be the best new ideas.” And indeed, Price’s Republican Study Committee is chock full of old ideas.

In fact, according to a new analysis by the Center for American Progress Action Fund and Citizens for Tax Justice (written by myself, CAPAF Associate Director for Tax and Budget Policy Michael Linden, and crack CAPAF intern Ethan Berman), the RSC-supported “jobs plan” is actually a huge doubling down on the Bush agenda of budget-busting tax cuts for the wealthy and corporations that won’t effectively create jobs. Here are some highlights:

– The plan, titled the Economic Freedom Act of 2010, would add nearly $7 trillion in deficits over the next ten years. Coupled with their plan to renew all of the Bush tax cuts of 2001 and 2003, the GOP’s proposal costs a whopping $10 trillion.

– Their two solutions for paying for this spending spree — repealing TARP and the remaining stimulus funds — covers less than five percent of the total cost.

– The tax benefits of the plan overwhelmingly go to the very rich. In 2012, 61.5 percent of the tax benefits would go to the richest one percent of households.

– Under the plan, the average middle-class taxpayer receives a tax cut of $467. The average taxpayer in the richest one percent (with an average income of $1.4 million) receives a tax cut of $157,500.

The GOP jobs plan also includes a huge corporate tax cut, which will be examined in more depth later. Not only are these tax cuts incredibly expensive, they also provide little “bang for the buck” in terms of job creation, according to both the Congressional Budget Office and Moody’s Economy.com.

Read the full report, “Republicans’ $10 Trillion Giveaway,” here.

Our guest blogger is Heather Boushey, Senior Economist at the Center for American Progress Action Fund.

At National Review, Reihan Salam has weighed in on whether there is a quick monetary fix to our current economic woes, in response to posts from Paul Krugman and myself. Salam quotes Raghuram Rajan, highlighting this point: “If this is our goal, it is unwise to try to revive the patterns of demand before the recession, following the same monetary policies that led to disaster.”

Certainly, policymakers should not try to encourage the development of another bubble. The lack of action to stem the rise of the housing bubble was a public policy failure and we can see the ravages it has wrought on the US economy. Low interest rates in the early 2000s spurred homeownership and the bidding up of home prices; for most buyers, when they think about the cost of a home, they consider the monthly payment, which is a combination of the home’s price and interest rate.

But, monetary policy was not only to blame for the bubble. We can now clearly see how lax regulation in the mortgage market fed the bubble and how the sub-prime sector of the mortgage market was the first sign of impending troubles. Homeowners who purchased or refinanced homes on terms that they could never truly afford began to default in large numbers, rising as bubble-inflated home prices fell.

Without the lax regulatory structure, the housing bubble would not have gone as high as it did and many lower income families would not have been able to get into trouble with inappropriate and overly expense mortgages.

Salam’s quote of Rajan points to an important issue in the sentence preceding the one that he highlights: “The quality of its financial sector, its physical infrastructure, as well as its human capital, all need serious, and politically difficult, upgrades.” Yes, infrastructure in the U.S. needs an upgrade. The U.S. economy is shifting — it certainly needs to shift away from housing-related industries — but the question is towards what. Policymakers have a role to play in encouraging capital to be invested in ways that will boost our economy’s long-term vibrancy, not just bubble-fueled mania.

Right now, nothing could be more important — both economically and for the planet — than spurring investment in alternative energy and industries that will help us to address climate change. This will be where money is made in the future; already, we see other nations moving ahead of the United States in these kinds of investments.

Here again, the regulatory structure is key. The United States must sort out a regulatory framework that encourages investment in our productive capacity, rather than only encouraging or allowing financial shenanigans that don’t actually create value.

And, none of this means that we should give up on monetary policy while unemployment festers. The idea that we should raise interest rates with record-high unemployment seems short-sighted at best. Discouraging deflation and encouraging investment should remain the Federal Reserve’s goal, especially as Congress seems increasingly unable to come together to use fiscal policy to spur economic growth.