Next week, the Obama administration is hosting a meeting focused on finding ways to begin addressing the country’s broken housing finance system. For the last year or so, the Treasury Department has been saying that the next big effort following financial regulatory reform would be figuring out what to do with Fannie Mae and Freddie Mac, the two government sponsored enterprises, and this meeting is the first step in that process.

Republicans, of course, consistently go on and on about Fannie and Freddie, concocting an alternate reality where they were the main culprits in the housing bubble (despite the fact that by the time the bubble really started raging, the GSE’s had largely departed from the scene). And they have made no end of hay about GSE reform not being included in the financial regulatory reform effort.

But now that the administration is starting to turn its attention to GSE reform, the GOP is going to have to put its money where its mouth is. But much like the economic “solutions” pamphlet it released last week was short on actual solutions, the housing Policy Brief it released this week — authored by Rep. Mike Pence (R-IN) — is a bit short on actual policy.

It’s not until the very bottom of the document that the GOP’s “solutions” for what to do with Fannie and Freddie are detailed, and though there are three points there, they all come to the same conclusion, which is: “end the current GSE conservatorship by a date certain.”

Now, nobody thinks that the current situation regarding the GSE’s is tenable, and we have to dramatically rethink the way in which we do housing finance in this country. But the Republicans have no vision for what would replace Fannie and Freddie which — like it or not — back more than 90 percent of the mortgages in the country. And setting a date certain for kicking their legs out would not only harm the housing market, but could upset far wider swathes of the global economy:

GSEs are currently essential tools of federal policy, providing an enormous amount of liquidity in support of the federal government’s efforts to stabilize the housing markets. Investor appetite for the MBS issued by Fannie Mae and Freddie Mac helps to finance the significant borrowing of overseas’ capital by the U.S. government, providing an outlet for foreign investors to invest the excess dollars accrued by our significant current account deficit. Any abrupt disruptions could affect the balance of payments and global macroeconomic stability.

The GOP’s brief includes some hand-waving about competition and innovation replacing all of this mortgage financing, but the fact remains that the GOP simply has no idea what it wants the mortgage finance system to look like, and spends the vast majority of its policy statement on the issue trying to score political points off the false notion that government-backed loans to poor people brought the global economy to its knees. I’d say the GOP are a bunch of empty suits on this issue, but that would give them too much credit for getting dressed in the morning.

Our guest blogger is Michael Linden, Associate Director for Tax and Budget Policy at the Center for American Progress Action Fund.

Here’s something I bet you didn’t know. If we let the Bush tax cuts for the wealthiest two percent of Americans expire at the end of this year as scheduled, everyone still gets a tax cut. Yes, everyone.

Right now, the entire panoply of massive Bush tax cuts is set to disappear 141 days from now. Though those cuts were skewed heavily to the very wealthy, they did lower tax rates for everyone. Which means that if the all the cuts expire as scheduled, everyone’s taxes will go up. President Obama and Congressional Democrats don’t want that to happen. They have pushed to keep the tax cuts in place for everyone making less than $250,000, but to let them expire for the wealthiest two percent of Americans.

Anyone who was paying attention during the 2008 presidential election knows that Obama has been extremely consistent on this particular point. Congressional Republicans, however, don’t seem all that willing to allow the tax cuts for the middle class to stick around unless the wealthy get to keep theirs too.

The Republicans are simply wrong on the merits, but it’s important to note that rich people will still pay lower taxes under the President’s plan than they would if all the tax cuts expired. In other words, even with the expiration of the high-end Bush tax rates, the richest two percent still get to keep some of their tax breaks.

An excellent chart in the Washington Post yesterday, based on a recent analysis from the non-partisan Joint Committee on Taxation, illustrates this pretty clearly. As you can see, under the Democratic plan, millionaires will still get a tax cut of more than $6,300. That’s about six times as much as the median household.

How can this be? How is it that letting the Bush tax cuts expire on the richest two percent nevertheless results in a tax cut for those very same people? The answer can be found in our progressive income tax system.

The top income tax rate — currently 35 percent — that everyone talks about is a marginal rate, which means that someone in the top tax bracket only pays 35 percent on the top part of their income. In 2009, for example, that rate applied only to each dollar after the first $372,950 of taxable income (for married couples). For dollars earned up to that limit, rich people pay the same rates as people who make far less. Read more

Florida’s Republican Senate candidate Marco Rubio has already made it abundantly clear that he is not serious about addressing the country’s long-term structural deficit, as he is in favor of permanently extending the Bush tax cuts for the rich — at a cost of $830 billion over ten years — and proposes a slew of new budget busting tax cuts for the wealthy and corporations. He even wants to implement a supermajority requirement for any tax increase, which, as California shows, makes responsible budgeting next to impossible.

But just in case we needed some more evidence of Rubio’s deficit peacockery, he was happy to provide it during an interview last night with Fox Business’ David Asman. Rubio said that his plan for addressing the nation’s fiscal situation amounts to a constitutional amendment requiring a federal balanced budget, banning earmarks, unspecified entitlement reform, and putting “term limits” on federal agencies — excluding defense, of course:

RUBIO: The second thing we have to do is spending constraints. That means a constitutionally balanced budget, that means banning the practice of earmarks, and ultimately that means entitlement reform. [...]

ASMAN: Might you also have to go even farther than Ronald Reagan did and reversing thing like the department — when Jimmy Carter started the Department of Education, he said it would improve our test scores and make schools more efficient. In fact, we’ve had just the opposite. When he created the Department of Energy, that was to get us off of a dependence on foreign oil. Well guess what, we’re a lot more dependent on foreign oil. What about getting rid of two departments like these?

RUBIO: Well, here’s what I think. I think every non-defense department, every non-defense discretionary spending program should be sunsetted every 10 years. Every 10 years, those programs should sunset and we should require that they be reauthorized by Congress. That means they’re going to have to justify their existence. Look at it this way, it’s like term limits on agencies.

Watch it:

Rubio’s plan for reforming entitlements is shockingly non-specific, but in the past he has been sympathetic to simply slicing benefits for younger Americans. Earmarks, meanwhile, constitute less than one percent of federal discretionary spending, so eliminating them entirely does essentially nothing to the structural deficit.

As for the rest, a balanced budget amendment not only would take forever to pass, it would be incredibly destructive, as it would prevent the government from running a deficit when the situation calls for it (such as now, as the country tries to recover from a financial crisis). And even conservatives think it’s a dumb idea. “The amendment’s requirement that the federal government annually spend no more than it collects is, quite simply, insane. Debt in itself is not harmful, neither for governments nor for households,” wrote Scott Galupo, a former staffer for House Minority Leader John Boehner (R-OH).

Meanwhile, eliminating entire non-defense agencies or programs still doesn’t take a significant chunk out of the budget. Spending on education, for instance, makes up only three percent of the entire budget (but funds critical programs, particularly for traditionally under served communities). So, to sum up, Rubio suggests a bunch of pipe dreams and small ball measures for reducing spending, while turning a blind eye to two of the largest drivers of the deficit: huge tax cuts for the rich and defense spending.