When we last encountered Illinois’ Republican Senate candidate Mark Kirk, he was scaring farmers into thinking that they’re going to have to pay the estate tax, when it affects just 1.6 percent of farm estates. And Kirk isn’t any more concerned about the details when it comes to federal spending, if the “Five Top Policies to Control Spending” he released yesterday are any indication.

“In order to prevent a Greek tragedy right here in the U.S., we should take quick action on the emerging sovereign debt crisis and reduce government spending here at home,” Kirk says, hewing to the Greek theme that he favors. Kirk’s five ideas are: “Enact a line-item veto; End earmarks; Require a supermajority to spend beyond our means; Enact Senator Simon’s balanced budget amendment; and Reestablish the Grace Commission with special procedures to implement approved spending cuts.”

Progress Illinois referred to the plan as “Kirk’s vapid spending reforms.” Indeed, the plan shows that Kirk is either woefully uninformed about where the problems in the federal budget lie, or he’s not at all interested in actually addressing the deficit.

The line-item veto, as Progress Illinois noted, has not only been ruled unconstitutional by the Supreme Court, but would likely just lead to increased political horse-trading when it comes to spending, not any actual reductions. The exact balanced budget plan that Kirk mentions was defeated by the Senate in 1994, and even conservatives realize that preventing the federal government from ever running a deficit is “a stupid idea.” Calling for a balanced budget amendment is a political trick, not a serious budget proposal.

It’s unclear what Kirk’s proposal to “require a supermajority to spend beyond our means” would actually be in practice. And like any good politico, Kirk suggests a commission to make spending cuts, outsourcing Congress’ duties to some other body.

The only cut that Kirk explicitly identifies is to end earmarks, which, in total, amount to less than one percent of the federal budget (about $20 billion). Remember, Kirk wants to extend the Bush tax cuts for the wealthy and completely eliminate the estate tax, which together cost about $1.6 trillion over ten years. Against that, the paltry $20 billion he saves from eliminating earmarks is a drop in the bucket.

Like other Republican senate hopefuls, Kirk’s plan is long on rhetoric, but short on actual spending cuts, while flat-out ignoring the real long-term drivers of the deficit: giant tax cuts, health care spending, and the defense budget. But of course, the real trouble here is that balancing the budget on the spending side alone, while also enacting trillions in new tax breaks for the rich, would require absolutely draconian cuts to highly popular programs that many people depend upon. So it’s better to just not tell anyone what your plans are.

Today, the Bureau of Labor Statistics released another report showing that job-creation continues to slog along at a less-than-encouraging pace. The economy lost 54,000 jobs in August (though 67,000 private sector jobs were created) and the unemployment rate remained essentially unchanged.

June and July’s job creation numbers were revised upward somewhat, but the fact remains that this level of job creation is not enough to foster an acceptable recovery. In fact, as Derek Thompson noted, “if every twelve months, we added as many jobs as the best year in the last decade, we wouldn’t get back to full employment for another eleven years.” Calculated Risk has the graph:

The Obama administration has been dropping some hints that a new job creation package is in the works, and it has been appropriately hammering Senate Republicans for obstructing a bill providing tax credits and loans to small businesses. But given the deficit hysterics that have gripped Capitol Hill, the chance that a substantial jobs program emerges are, as Edmund Andrews put it, “somewhere between zero and zero point zero.”

However, there are some under-the-radar things that could be done, like renewing the Temporary Assistance for Needy Families Emergency Contingency Fund, which is set to expire in a few weeks. As Joy Moses and Melissa Boteach note, “this program has enabled 35 states to partner with the private sector over the past year and a half to create more than 240,000 new jobs for low-income and long-term unemployed workers.” Republicans in Congress enjoy mocking this particular program, but it has substantial support amongst Republicans at the state level that could help push a renewal through.

Also, it’s rather mystifying that, with the Obama administration talking about payroll tax cuts to boost the economy and emphasizing its intention to preserve the Bush tax cuts for the middle class, no administration figures are talking about an extension of the Making Work Pay tax credit, which was passed as part of the Recovery Act.

As Jamelle Bouie noted, “the fact that we’re talking about ‘extending the Bush tax cuts’ and not ‘passing the Obama tax cuts’ is a real political failure on the part of the Democrats.” Indeed, Obama’s signature tax cut, which he campaigned heavily on, is garnering no attention whatsoever, and seems destined to expire with little fanfare.

Now, neither of these measures would provide the sort of large-scale job creation necessary to push the economy out of its sluggish current state. But they would help on the margins, and given political constraints, might be the best that we can hope for.

One of the legitimate criticisms of the Dodd-Frank financial regulatory reform bill that passed this year is that it leaves a lot of the details of reform up to regulators, instead of laying out hard-and-fast rules. There are pros and cons to this approach, but one of the big drawbacks is that the rule-making happens when the subject has faded from public view, giving the financial services industry even more influence over the process than it already has.

Case in point, the country’s biggest banks have been meeting with officials at the Federal Reserve in an attempt to shape the new rules governing derivatives trading:

Goldman Sachs Group Inc., Citigroup Inc. and others have also discussed tough rules for derivatives with government officials. Citi executives, meeting with the Fed on Aug. 18, expressed concerns about the effect of the new rules on U.S. firms. “Citigroup representatives also expressed concerns about a narrow interpretation of the definition of hedging and the importance of retaining their ability to hedge across markets,” the meeting summary prepared by the Fed said.

Non-financial companies and lobbying groups are also trying to influence the new derivatives rules, including the American Petroleum Institute and the U.S. Chamber of Commerce.

First, I’m glad to see that these meetings were disclosed relatively quickly. Other bank regulators, including the FDIC, have been planning to make a concerted effort to disclose their meetings with private sector representatives regarding the implementation of Dodd-Frank, and it’s good to see the Fed follow suit.

But on to the substance. The derivatives title of Dodd-Frank is one of the better parts of the bill, bringing much-needed transparency to an unregulated market and restricting some of the riskier derivatives trading in which banks can engage, by forcing them to move certain activities into a separately capitalized subsidiary (although this provision was watered down from a much-stronger one at the very last minute). But activities that qualify as related to hedging risk don’t have to be walled off.

Therefore, it’s in the banks’ interest to have as much activity as possible qualify as hedging, which is what these meetings seem to have been about. But the wider these definitions are, the less effective Dodd-Frank is going to be and the more risky trading will occur in the heart of the financial system. The added lobbying of the Chamber and API, which both falsely portrayed the effect that financial regulation would have on corporations while negotiations were ongoing, is only going to tip the scales in favor of a wider definition and more risk in the system.

If regulators don’t craft strong rules during this implementation stage, financial reform isn’t going to amount to much. And, sadly, there’s no logical counterweight that has as much at stake in the discussion.