As ThinkProgress has previously reported, over a million jobs have been lost due to outsourcing since 1994. One of the main organizations promoting outsourcing has been the US Chamber of Commerce. The Chamber has been taking money from foreign corporations and holding clinics on how to outsource American jobs, such as one sponsored by billionaire Sheldon Adelson “inviting local businesses in Florida to come to Jacksonville and learn about outsourcing from Chinese government officials like Li Haiyan, the Counselor for Economic Affairs for the People’s Republic of China, U.S. Chamber lobbyist Joseph Fawkner, and BChinaB.”

Last week, The Wonk Room sat down with United Steel Workers International President Leo Gerard and three members of the USW labor union. Among the topics we discussed were the Chamber’s practice of encouraging outsourcing. Gerard called these actions a “disgrace,” adding that “it’s no longer U.S. Chamber of Commerce. It’s the Bahrain Chamber of Commerce or the Chinese Chamber of Commerce”:

WR: It was revealed a couple weeks ago that the United States Chamber of Commerce, which is one of these big outside spending groups in the election, is actually receiving a lot of their funding from foreign companies and whatnot. What’s your take on that situation, particularly given how much of a major player they have been in the election against candidates who are supported by labor?

Gerard: I think the Chamber is a disgrace. They pretend they are getting money and that they are not using it for political purposes, but we all know money is fungible, as they say. So if you get money from once source you can divert it and use money for something else. [...]

WR: It was revealed last week that the Chamber has actually been intimately involved with many Chinese companies in terms of helping hold seminars teaching American companies how outsource jobs to China. What’s your take on that?

GERARD: As I said, it’s no longer U.S. Chamber of Commerce. It’s the Bahrain Chamber of Commerce or the Chinese Chamber of Commerce and what they have done is become a consulting firm to teach companies how to move jobs out of America. And they have opposed of all things, they have opposed giving a tax break, giving an incentive, for a company to bring a job back from offshore to America, and yet they have supported giving tax breaks for companies that will move jobs out of America. That’s perverse, that’s against the national interest, and no other society would tolerate that. [...]

Watch it:

Despite efforts by the Obama administration to end the tax breaks given to companies that are funneling jobs overseas, both Republicans and the U.S. Chamber of Commerce have repeatedly blocked their efforts.

We also caught up with three USW labor union members – Bonnie Carey, Harold Philip, and Glen Dunaway – and talked with them about how outsourcing is affecting American workers. That interview is below the jump. Read more

The U.S. Chamber of Commerce has become a behemoth of political influence, making high-powered and well-funded attempts to reshape policies to fit its agenda. Thanks to the Citizens United Supreme Court decision and its trade association designation, the Chamber can leverage significant funds from its 501(c)(6) account — which includes donations solicited from foreign corporations — in campaign attacks against Democrats without ever having to disclose its donors. Despite significant scrutiny and criticism, the Chamber refuses to disclose how dues and other contributions are being spent.

But not all of the Chamber’s members are happy about its opaque political activities. Last week, a coalition of 275 institutional shareholders with $100 billion in assets under management from the Interfaith Center on Corporate Responsibility (ICCR) sent a letter to company directors who are members of the Chamber to express deep concern over the Chamber’s “extremely antagonistic position” on the Affordable Care Act. Concerned that the Chamber’s pursuit of an anti-health care agenda — especially with the possible use of “foreign monies” — may damage their reputation, these investors are demanding the Chamber reveal whether company dues are being used in this “ill-conceived strategy,” and that company directors withhold all dues or withdraw membership “until the Chamber refrains from further investment in negative advertising”:

The Interfaith Center on Corporate Responsibility and its members…are writing to express our profound concerns about our company’s potential role in furthering the highly politicized agenda of the U.S. Chamber of Commerce in the 2010 mid-term election and the Chamber’s continued hostile opposition to health care reform. [...]

The Chamber’s punitive campaign, a veritable “hit list” of health care supporters, is counter-productive and explicitly partisan. … As [our company]‘s board representative to the Chamber, it is vitally important to ensure that the company is not seen to be the unwitting supporter of this initiative. We strongly believe that the media attention this issue has generated, particularly surrounding allegations of the co-mingling of foreign monies, poses significant risk to our company’s reputation. Further, we fully expect that you will use your influence to encourage other Chamber members to abandon this ill-conceived strategy.

As concerned shareholders, many of us working in the health care industry, we ask that you take steps to eliminate any risks associated with this issue, and make available all information regarding the use of our membership dues to the U.S. Chamber of Commerce for review no later than October 30th. Further, as we believe that dues to the Chamber support the infrastructure which coordinates this campaign, we request that you publicly declare your opposition by either withholding your dues until the Chamber refrains from further investment in negative advertising, or if necessary, withdraw your membership in protest.

This is the ICCR’s second appeal to Chamber members on health care reform. In November 2009, ICCR members “called on Chamber members with stated positions similar to ICCR’s Health Care Reform principles to challenge the Chamber’s lobbying efforts against the passage of health care legislation.”

While the ICCR issues final warnings, Chamber members like Apple have left the Chamber altogether. In a newly-released comprehensive investigative series, Harry Hanbury and GRITtv reveal the ubiquitous role the Chamber plays in American politics and why companies may blanche at its secretive activities.

Watch it:

As I’ve been documenting, Republicans on the House Financial Services Committee have set their sights on weakening some of the key provisions in the Dodd-Frank financial reform law. One of these is the Volcker rule — named after former Federal Reserve Chairman and current Obama administration adviser Paul Volcker — which is aimed at preventing banks from trading for their own benefit with federally insured funds.

Banks are already thumbing their nose at the Volcker rule and laying the groundwork for a return to risky trading; they’re taking advantage of Dodd-Frank’s infancy, going on new adventures as regulators work out what, exactly, the Volcker rule should outlaw. And the banks are betting that the GOP will push regulators into making exceedingly narrow, so that risky (but profitable) trading can go on unabated.

But Volcker is pushing back, telling regulators to leave the rule more open, thus allowing them to crack down on a potentially wider range of activities:

His suggestion: Bar banks from trading with their own funds if they benefit from any type of government guarantee, such as deposit insurance, these people said. Banks would have to police their own activities to make sure they are in compliance, with Federal Reserve examiners ensuring that is the case…Mr. Volcker’s concern, according to several people familiar with the matter, is that narrow or prescriptive rules would invite gamesmanship on the part of banks and could allow firms to evade the rule’s intent. Already, some banks and their lobbyists are seeking to sway regulators and encourage them to narrowly define certain types of trading activities.

Volcker is not alone in his attempt to push regulators into a more inclusive rule. A group of Senators led by Sen. Carl Levin (D-MI) — who was one of the Volcker rule’s biggest advocates during the financial reform debate — penned a letter to regulators stating that Congress “provided you with a clear mandate and broad authority to act. The American people are now relying upon you to fully carry out the law.” “Congress voted for change and we need the regulators to move forward with change. They shouldn’t be giving away the ranch so we get back in this situation again,” said Sen. Tom Udall (D-NM), one of the letter’s signers.

Volcker was reportedly disappointed in the final version of his rule, after exemptions were added to it in an attempt to win Republican votes for Dodd-Frank, so it’s not surprising that he’d go to bat to prevent even more backsliding. And that he has to wrangle with the regulators at all is symbolic of both the promise and potential pitfalls in Dodd-Frank: depending on how the regulators craft the rules, the law could be extremely effective or simply window-dressing.

During a debate last night, Sen. David Vitter (R-LA) was asked what he would cut from the budget in order to offset the expense of extending the Bush tax cuts. Remember, a full extension would cost more than $4 trillion over ten years, while extending the cuts for just the richest two percent of Americans costs $830 billion. Rather than lay out where he would make cuts, Vitter rejected the premise of the question, scoffing at the very notion that tax cuts should be paid for:

VITTER: Well, first of all, I disagree with the premise that in order to keep tax rates where they are and not increase taxes, somehow we need to pay for that. I think that’s Washington-speak, not Louisiana-speak. [...]

Q: It’s a misnomer to say this continuing, for the top rates, wouldn’t have to be paid for. You would have to pay that $750 billion because it was supposed to sunset. It’s not an increase, it’s a sunset.

VITTER: Just to be clear, the premise that I disagree with is that to avoid a tax increase, we somehow have to pay for it. It’s not the government’s money, it’s our money. That’s the point.

Watch it:

Vitter did eventually endorse some spending cuts — including rescinding unspent stimulus money, which would have the practical effect of raising taxes on the middle class — but they wouldn’t come close to covering the cost of just extending the tax cuts for the richest two percent. And it’s his complete dismissal of the very notion that tax cuts should be paid for that merits attention.

Under current law, which stipulates that the Bush tax cuts expire, the government will collect 21 percent of GDP in revenue in 2020. Extending the cuts means less revenue for the government (21 percent of GDP minus the cuts) and a larger deficit. That’s not “Washington-speak,” it’s basic budgeting. For what it’s worth, the last time that the budget was balanced, the government brought in 20 percent of GDP in revenue.

But Vitter is hardly alone in his position. Senate Minority Leader Mitch McConnell (R-KY) said in August, “you’re talking about current tax policy. Why did it all of a sudden become something that we, quote, pay for?” “Listen, what you’re trying to do is get into this Washington game and their funny accounting over there,” said House Minority Leader John Boehner (R-OH), when asked if Republicans planned to pay for extending tax cuts for the rich. “It’s not a cost. That’s where we are today. That’s the baseline. It doesn’t score anything to continue them,” insisted Sen. Tom Coburn (R-OK).

So the next time Vitter fearmongers about the “grab-bag of deficit spending” that he sees in Washington, it’s worth remembering that he doesn’t consider tax cuts — one of the main drivers of the deficit — to be part of the equation.

Connecticut’s Republican Senate nominee Linda McMahon has been all over the place when it comes to the the Dodd-Frank financial reform law, which bears the name of the senator she’s hoping to replace. “Linda supports financial reform,” her spokesman Ed Patru has said. “She believes the goals of this particular legislation are laudable and certain aspects of it are reasonable.” However, she said that she would have ultimately vote against Dodd-Frank, because “I think that this bill grows government more than it does anything else.”

McMahon has been particularly critical of attempts to place new restrictions on the risky practices of Wall Street, telling Connecticut Plus that “we have a fair amount of regulation in place now.” And during a campaign stop at Fairfield University yesterday, McMahon said that the government actually needs to roll back bank regulations, giving them freer rein:

McMahon said the government needs to “dial back” regulations on banks because the amount of money they need to have in reserve to loan out money was high enough to prevent them from loaning to people with good credit histories. “We have to really get people working in the private sector. It’s why I think it’s very important to send more business people and fewer career politicians to Washington,” McMahon said.

Businesses large and small are having trouble accessing loans because the economy is weak and banks are holding money against a variety of losses they feel might be coming their way. Lifting regulations is not going to suddenly make them feel that economic conditions merit making loans, but it would certainly free them up to go back to making risky bets and building the junk financial products that led to the economic meltdown in the first place.

But McMahon is hardly alone amongst Republican Senate candidates in wanting to do away with restrictions on the nation’s financial industry. In fact, Washington’s Republican Senate nominee Dino Rossi has explicitly called for repealing the entire Dodd-Frank law.

In addition, Republicans on the House Financial Services Committee have made it quite clear that they intend to take a hatchet to Dodd-Frank, and at the very least bury regulators who are attempting to implement it under a barrage of paperwork and hearing appearances. In the meantime, Wall Street banks are already back to their old tricks, engaging in risky trading and searching for loopholes to exploit.

Bank of America, to its credit, was the only bank to freeze foreclosures in all 50 states as a result of revelations regarding the “robo-signers”: bank employees who were approving thousands of foreclosure without verifying basic information. However, BofA restarted its foreclosure machine just ten days later, saying that it had examined more than 100,000 foreclosure cases and found no problems.

Shortly thereafter, BofA backtracked and said that it had actually found some problems, but tried to downplay them as simple paperwork errors — like misspelling names — rather than a systemic effort to rush foreclosures through the pipeline with almost complete disregard for the legal process. But a former BofA robo-signer told his story to CNN Money and painted a very different picture:

[Former BofA employee Tam Doan] didn’t have time to actually read the paperwork he was signing, he said, and in some cases, he didn’t even know what documents he was putting his pen to. “I had no idea what I was signing,” said Doan. “Either you were in or you were out.” [...]

The paperwork he robo-signed most often were the notices to delinquent borrowers that the servicer was proceeding to foreclosure. By signing that document, he was affirming that the bank had reviewed the loan and it didn’t qualify for a modification. But, he said, the reality was he had no idea whether Bank of America had really tried to save the borrower’s home. “We had no knowledge of whether the foreclosure could proceed or couldn’t, but regardless, we signed the documents to get these foreclosures out of the way,” he said, noting that he assumed another department had checked that the review was done.

Doan’s description of BofA neglecting to verify whether or not borrowers qualified for a loan modifications fits in with our previous reporting. We found that the bank was siphoning borrowers into its own private loan modification program without checking whether they qualified for federal modification programs, in clear violation of the bank’s contract with the Treasury Department.

But more importantly, Doan’s story strikes right at the heart of the image the banks want to convey regarding foreclosure-gate. They want to make it a story about careless mistakes and sloppy paperwork, when it’s really one about a system explicitly designed to cut corners, even if that meant violating due process and the legal requirements for foreclosing on a home.

Even if there were no homeowners who were improperly foreclosed upon (and we know there were, including some who literally didn’t have a mortgage), the banks’ blatant disregard for process should be enough to warrant slamming the brakes on their foreclosure factories, especially considering that the extent of the problem is still unclear. One investor told CNBC today that he estimates that the mortgage mess could cost the banks $97 billion in losses.

Earlier this week, Rep. Spencer Bachus (R-AL), who is in line to become chairman of the House Financial Services Committee if Republicans gain control of the lower chamber, was caught soliciting donations from the banking industry by promising to be easier on the banks than Democrats have been. In return, Bachus is taking aim at some of the crucial reform measures in the Dodd-Frank financial reform law that are supposed to rein in some of the risky practices of Wall Street’s financial behemoths.

First, via Salon’s Andrew Leonard, we have Bachus saying that he would repeal the provision giving the federal government authority to dismantle large failing financial firms:

Republicans would try to repeal the government’s new authority to seize and liquidate large troubled financial firms should they take control of the U.S. House of Representatives next year, a key lawmaker said on Thursday. Representative Spencer Bachus, who is in line to be chairman of the House Financial Services Committee under Republican control, said that section of the new Dodd-Frank financial law institutionalizes government bailouts of “too-big-to fail” institutions and puts taxpayers at risk.

And then MarketWatch reported today that Bachus may also have it in for the Volcker rule, which is meant to prevent banks from trading for their own account with federally insured funds:

Crowley [of the law firm K&L Gates] predicts that Republican leadership in the House Financial Services Committee, the legislative panel responsible for overseeing the implementation of the Dodd-Frank Act, will hold hearings on the Volcker Rule and press regulators to limit costs to the industry as the agencies write the new rules…[Rep. Spencer] Bachus (R-AL), in July, unsuccessfully sought to amend the bank reform legislation with a provision that would have prohibited the Volcker Rule’s implementation unless other countries adopted similar measures.

These are provisions that give federal regulators key tools to both rein in the riskiness of the biggest banks and then liquidate those banks if they still get themselves into significant trouble (without relying on taxpayer dollars).

If Bachus does intend to bog down the implementation of Dodd-Frank, it seems like he’s going to have a receptive crowd of counterparts to work with. For instance, Rep. Jeb Hensarling (R-TX) has expressed a desire to defund the new Consumer Financial Protection Bureau and Rep. Scott Garrett (R-NJ) has said that he would limit funding for regulatory agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission in order to undermine Dodd-Frank.

This week, after it comically claimed to have plowed through more than 100,000 reviews of foreclosure documents in 10 days, Bank of America finally admitted that it had initiated improper foreclosures, with documents that were either incomplete or included errors. However, BofA attempted to play the whole thing off as simply a spate of unfortunate typos, rather than a systematic disregard for due process that has resulted in improper foreclosures (and the theft of at least one pet parrot).

But Bank of America has looked like the model of forthrightness compared to Wells Fargo, which has steadfastly refused to freeze foreclosures, despite the revelations regarding the “robo-signers” — bank employees who approved thousands of foreclosure without verifying basic information. In fact, Wells was on Capitol Hill insisting that its foreclosure process was sound and that it never employed robo-signers just one day before the Financial Times broke a story about Wells using robo-signers.

Now, Wells has finally admitted that it had some problems with foreclosure documents, but like BofA, it’s trying to play them off as no big deal:

The San Francisco-based bank said on Wednesday it planned to submit additional paperwork on 55,000 foreclosures before the courts in the 23 US states that require a judge’s approval before houses can be reclaimed. Wells said it expected to complete the additional filings by the middle of November…“The issues the company has identified do not relate in any way to the quality of the customer and loan data; nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred,” Wells said. Wells said it had identified instances where foreclosure procedures “did not strictly adhere to the required procedures”.

So, for Wells, not adhering “to the required procedures” means they simply get to go back and do it over. But as Yves Smith wrote, “by definition, a replacement of a robo signed affidavit is an admission the earlier submission was improper, hence a fraud on the court.”

And that’s what the banks keep trying to play down: they’re committing fraud by circumventing the legal process in place for initiating and completing a foreclosure. According to the FT, some of Wells’ documents involved possibly fraudulent notarizations, which is a problem that is more significant than a simple spelling error, and merits a real investigation.

House Republicans, in their much-ballyhooed “Pledge to America,” suggested immediately cutting $100 billion from the non-defense discretionary portion federal budget, which would require a 21 percent reduction in, among other things, federal education funding. But Mike Lee, the Republican nominee for the Senate in Utah, has doubled down on the House GOP’s idea, saying that he would like to see an immediate 40 percent reduction in the federal budget, adding that he’s willing to see the government shut down if President Obama refuses to accede to such draconian cuts:

Lee said he’d “call their bluff” by first passing the tax cuts and forcing President Obama to sign them or veto them. Then, pass a balanced budget, which “would require about a 40 percent cut,” and force Obama to either sign it or shutdown the government. The prospect of such a showdown between Obama and Republicans, in fact, made Lee “giddy.” When asked about it Friday afternoon, Lee said that Thursday night was the first time he’d used the 40 percent figure.

What would this mean in practical terms, particularly in light of Lee’s previous decision to rule Social Security and the defense budget as out of bounds for cuts? As Newsweek’s Andrew Romano put it, “the math is simple–and bleak“:

In Obama’s budget, Social Security costs $787.6 billion; defense costs $928.5 billion; debt payments cost $250.7 billion. Together they total $1.967 trillion. If you remove that $1.967 trillion from the equation–as Lee suggests–you’re left with $1.863 trillion in spending to work with. At this point, balancing the budget–i.e., wringing $1.669 trillion in savings out of that last $1.863 trillion–would require slashing every government program that’s not defense or Social Security (Medicare, Medicaid, veterans affairs, education, and so on) by 89.6 percent.

Republican candidates like Lee and Marco Rubio (FL) like to act as if reducing the federal budget is a simple task that involves rooting out waste, fraud, and eliminating programs that nobody likes. But Lee’s plan would involve a nearly 90 percent reduction in the health care entitlements, education funding, and other discretionary programs like federal highway funding, Immigration and Customs Enforcement, and the Food Safety and Inspection Service.

Are such reductions practical or economically advisable? Of course not. But Lee’s willing to stoke the Tea Party into a frenzy with his talk of balanced budgets and a government shutdown.

Republicans on the House Financial Services Committee have already made it quite clear that they intend to attempt to defund the newly created Consumer Financial Protection Bureau if the GOP gains control of the lower chamber. Rep. Jeb Hensarling (R-TX), one of the top Republicans on the committee, has explicitly announced his intention to defund the agency, as he believes it “assaults the liberties of the consumer.”

But denying the CFPB funds may not be the only way in which Republicans look to kneecap the new agency. Rep. Ed Royce (R-TX), who has been floated as a possible challenger to Rep. Spencer Bachus (R-AL) for the Financial Services chairmanship, told American Banker that he also wants to give bank regulators direct veto power over the CFPB’s rulemaking:

“If the Consumer Financial Protection Bureau can trump the safety and soundness regulator, you run the risk of creating the same type of environment that was created with the government-sponsored enterprises in which you created moral hazard in the system,” he said. “We need to address giving the regulators for safety and soundness the ability to trump the actions on consumer protection if they threaten safety and soundness. Safety and soundness has to be our fundamental concern.“

This “safety and soundness” talking point was constantly employed by Republicans during the debate over financial regulatory reform, showing that they care more about a bank’s ability to make a profit than the government’s responsibility to protect consumers from financial shenanigans. And Royce is evidently not ready to give it up.

But the CFPB is already subject to veto by the bank regulators. A two-thirds vote of the Financial Stability Oversight Council — a nine member board composed of the heads of the bank regulators, the Treasury Secretary, and an “insurance expert” — can nullify any CFPB regulation.

Is Royce suggesting that the individual bank regulators have veto power over rules that affect the insitutions that they regulate? If so, such a move would be incredibly destructive, as those agencies have already shown that they are easily co-opted by the firms they oversee. The entire point of creating the CFPB was to level the playing field a bit between the banks and consumers. Giving the bank regulators a straight veto would effectively put the consumer protection system right back where it was before the Dodd-Frank financial reform bill passed.

In an interview with National Journal, CFPB head Elizabeth Warren said that the agency will be bolstered by crowd-sourcing, collecting stories from the public’s interactions with the financial system. Evidently Royce wants the crowd to be composed solely of bankers.

When Congress tackled financial regulatory reform, Sen. Bob Corker (R-TN) said that he was going to play a productive role, negotiating with Senate Banking Committee Chairman Chris Dodd (D-CT) after the committee’s ranking member, Sen. Richard Shelby (R-AL), made it clear that he wasn’t interested in cutting a deal.

However, Corker ended up playing the role that the Gang of Six played during the health care reform debate: insisting that his ideas get placed into the bill, and then voting against it anyway, while decrying the breakdown of bipartisanship.

According to the Nashville Business Journal, Corker is looking ahead to his next performance — playing a “leading role” in the inevitable reform of mortgage lending and the government sponsored enterprises Fannie Mae and Freddie Mac:

U.S. Sen. Bob Corker, a Republican, led a forum on the U.S. housing market Tuesday, making clear his intentions to again try shaping legislation in reaction to the financial crisis…“I think this is a much heavier lift for Congress than what we saw during Dodd-Frank,” he said of the bill overhauling the financial system, which he ultimately opposed.

Corker’s intentions are distressing enough after seeing the role that he played during the financial reform debate. But considering Corker’s position on mortgage finance reform, they’re even worse.

When Dodd-Frank was being hashed out on the Senate floor, Sen. John McCain (R-AZ) offered a truly irresponsible amendment that would have simply set a date certain for dissolving Fannie Mae and Freddie Mac, despite the fact that the mortgage giants back more than 90 percent of mortgages in the country. “The McCain amendment would cause significant uncertainty among the investors in GSE-issued mortgage-backed securities, threatening the primary source of mortgage credit we have at this time, without offering any alternative sources of liquidity,” we here at CAP noted at the time. “Such a large drop in mortgage liquidity could strongly threaten the prospects of economic recovery.”

McCain’s plan would have not only threatened America’s economy, but macroeconomic stability, as “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.” The amendment was an ideologically driven catastrophe waiting to happen.

Corker was a co-sponsor of that amendment and voted for it, saying later that it was a “really thoughful amendment.” And now he’s looking for a way to be even more involved in the process the next time around.

One of the more legitimate criticisms of the Dodd-Frank financial regulatory reform bill that was signed into law by President Obama earlier this year is that it leaves too much discretion to regulators for crafting rules that will govern Wall Street’s activities. Not only does placing so much responsibility in the hands of regulators give the financial services industry ample opportunity to lobby for weaker restrictions, but it is also a time-consuming process.

And according to Reuters, the drawn out rule-writing process may provide an opening for House Republicans to blunt the effects of Dodd-Frank should they win control of the House:

If Republicans can gain control of key House committees, their chairmen could throw so many time-consuming subpoenas, hearings and information requests at regulators that rule-writing for Dodd-Frank would slow down. The Commodity Futures Trading Commission (CFTC), a small agency with a lot on its plate, could be vulnerable to this, as could the [Consumer Financial Protection Bureau], still in its infancy.

House Republicans have already made it quite clear that they would repeal Dodd-Frank if they could, and at the very least they’d like to see the newly created Consumer Financial Protection Bureau defunded. But bogging down the regulatory agencies in an avalanche of paperwork and hearing appearances is an obvious avenue for preventing Dodd-Frank’s rules from coming online, should the repeal effort fall flat (which it likely will, as President Obama would almost surely veto any repeal, even if it got through both houses of Congress).

Such a move could have a big effect, as the rule-writing process is gaining importance. Bloomberg noted today that Wall Street banks are already exploiting vagueness in the Dodd-Frank law to continue proprietary trading — trading for their own account — which the law is meant to restrict:

The banks have no intention of ceasing their prop trading. They are merely disguising the activity, by giving it some other name. A former employee of JPMorgan, for instance, wrote to say that the unit he recently worked for, called the Chief Investment Office, advertised itself largely as a hedging operation but was in fact making massive bets with JPMorgan’s capital. And it would of course continue to do so. [...] It falls to the comptroller general – - or, more specifically, the General Accountability Office, which is overseen by the comptroller general — to determine precisely what the phrase [restricting such trading] means. And, at the moment, the GAO pretty clearly hasn’t the first clue.

In a sign of potential things to come, Rep. Spencer Bachus (R-AL), who is slated to take over the House Financial Services Committee if the Republicans gain a majority, has already been begging the banks for donations, on the premise that the GOP believes financial reform was too tough.

Yesterday, the Inspector General for TARP, who also oversees the Home Affordable Modification Program (HAMP), the Obama administration’s signature foreclosure prevention program, said that only $600 million of the $50 billion allocated to HAMP has been spent. And if it were up to Kentucky Republican Senate candidate Rand Paul, the rest of the money would be rescinded and struggling homeowners would be left on their own.

During a debate last night, Paul was asked if he would continue HAMP and whether the government should be trying to keep “deserving” borrowers in their homes. Paul first said that he would cancel the remaining funds for HAMP. When asked what would happen to borrowers who would lose one of their last viable chances at staying in their homes, Paul simply replied “nothing good”:

PAUL: I think that the TARP funds that are left should go to restore the deficit and to try and pay off debt. I think the TARP funds, the whole entire $800 billion should have never been spent…I would vote for any unused funds to go back to try to offset the deficit. [...]

Q: What’s going to happen to those people [who are underwater on their mortgages]?

PAUL: Well, nothing good. And it’s not something that makes any of us happy. I mean, it’s really a tragedy. But the tragedy really, if you want to think this through, is the bad policy by Barney Frank and others.

Watch it:

HAMP obviously has its problems, but they stem from the inability to get borrowers through the program successfully and the banks’ obvious foot dragging. These are design flaws that should be fixed. Paul, though, would simply give up and leave borrowers to the mercy of mortgage servicers who have shown no interest in creating sustainable mortgage modifications on their own.

Instead of advocating a way to actually help struggling borrowers stay in their homes — and thus prevent all of the negative consequences of a foreclosure on individuals and the surrounding neighborhood — Paul resurrected the conservative fiction that lending in traditionally under-served communities caused the financial meltdown. Paul blamed the Community Reinvestment Act for the country’s economic woes, a thoroughly debunked narrative, and refused to lay out any plan for helping distressed homeowners.

This position fits in with the rest of Paul’s ideology, which basically involves leaving people to the mercy of Big Business. But 100,000 foreclosures occurred last month alone, and there is a straightforward way to help struggling borrowers, if HAMP were streamlined and taken out of the hands of the banks.

For months now, the Obama administration signature foreclosure prevention program — the Home Affordable Modification Program (HAMP) — has been sputtering along, with more borrowers now getting booted out of the program than receiving a sustainable mortgage modification. In fact, many borrowers who enter the program wind up worse off financially, as the failure to obtain a permanent modification results in the borrower owing back fees and late penalties to the bank.

One of the biggest problems with the program is that the banks simply have no incentive to participate on a large scale, as they receive incentive payments for successful modifications but are subject to no repercussions for failing to keep qualified borrowers in their homes. Yesterday, the Special Inspector General for the Troubled Asset Relief Program (TARP), from which HAMP’s money comes, noted that just $600 million of the $50 billion allocated to HAMP has been expended, adding that “a program that began with much promise now must be counted among those that risk generating public anger and mistrust.”

Now, the program is designed to pay out incentives to mortgage servicers for every borrower that stays current over the next few years, so that would explain some of the delay. But it doesn’t explain why barely more than one percent of the money allocated to the largest Obama administration program meant to aid homeowners has actually been expended.

According to the latest data, which was released yesterday by the Treasury Department, about 466,000 borrowers have received permanent mortgage modifications under HAMP, while almost 700,000 trial modifications have been canceled. Another 30,000 people received a “permanent” modification, only to have it canceled. The program clearly needs some reworking.

And there are things that could be done to get more borrowers into sustainable modifications and to move the HAMP money out the door faster. For one thing, housing counselors could be given the authority to approve loan modifications, and if the banks don’t challenge the modification in three months, it would automatically become permanent. Paul Krugman wrote that such a move “would do a lot to clarify matters and help extract us from the [mortgage] morass.”

Yesterday, Paul Willen, a senior economist and policy adviser for the Federal Reserve Bank of Boston, said that recent anti-foreclosure efforts by the federal government have amounted to just “three years of failed policies.” “To prevent foreclosures we must pay lenders or borrowers a lot of money or force lenders to modify loans even when they don’t want to,” he said. “The idea we can go forward and all we need to do is tweak things a little or change a rule here or there or even change a lot of rules and give some incentive payments — that is not enough.”

Since the foreclosure fraud scandal — in which banks were caught allowing “robo-signers” to approve potentially fraudulent foreclosure forms — first hit the national airwaves, Wall Street banks have been trying to downplay the extent of the problem, claiming that it only has to do with paperwork mistakes and not a compete disregard for due process and property rights. Wells Fargo and Citigroup both refused to implement foreclosure moratoriums despite their associations with robo-signers, and Bank of America and Ally Financial have both lifted their respective moratoriums.

Epitomizing the banks’ attempt to turn this into a story about mistaken paperwork — and not one about improperly throwing people out of their homes — Bank of America has come forth with an admission that it made “some mistakes” in its foreclosure process, but insists that they are “relatively minor”:

Some of the defects seem relatively minor, according to the bank, and bank officials said they haven’t uncovered any evidence of wrongful foreclosures. There was an address missing one of five digits, misspellings of borrowers’ names, a transposition of a first and last name and a missing signature on one document “underlying” an affidavit, a bank spokesman said. But the bank uncovered these mistakes while preparing less than 1% of the first foreclosure files that it intends to resubmit to the courts in 23 states.

Of course, BofA places the emphasis on innocent sounding mistakes like misspelling a homeowner’s name, and not on far more harmful instances, such as when it foreclosed on a homeowner who didn’t have a mortgage at all. Or when it locked a homeowner who was current on her mortgage payments out of her home, shutting off her utilities and stealing her pet parrot. If the banks are respecting due process, someone who literally does not have a mortgage should never receive a foreclosure notice.

But the banks’ problems also extend beyond those associated with homeowners. BofA, for instance, has been caught selling the same mortgage to multiple investors. As David Dayen put it, “the banks would knowingly put garbage into the mortgage pools and trot it out to the investors while misrepresenting the product. Now, we’re learning, there was a whole new angle – some of the loans showed up in multiple pools.”

This mess, which is entirely of the banks’ own making, extends far beyond some misspellings and empty lines on a form. The entire foundation on which the banks built their foreclosure machines encouraged fraud and speed, without regard for the rights of borrowers. And BofA appears to have learned no lessons, considering that it flew through verifications of its frozen foreclosures at breakneck speed — reviewing about 10,000 per day — after spending months dragging its feet when getting borrowers into sustainable loan modifications.

There have already been significant rumblings from Republicans on the House Financial Services Committee about revisiting the Dodd-Frank financial regulatory reform bill should control of the House switch in November. Particular ire has been reserved for the new Consumer Financial Protection Bureau, which House Republicans have threatened to defund before it even gets off the ground.

I’ve already noted how the GOP’s zeal for repeal has led to an influx of money from the financial services industry. And according to Politico, Rep. Spencer Bachus (R-AL), who is slated to take over the House Financial Service Committee should Republicans gain a majority, told a crowd of 100 financial services lobbyists that they should be donating to Republicans, since Dodd-Frank “hammered them”:

When Republican Rep. Spencer Bachus of Alabama stepped in front of 100 financial services lobbyists at the Capitol Hill Club last month, he asked for an equal chunk of their campaign cash — and made clear he was watching closely. It is hard to believe, he told the crowd, that some in their industry were still giving more to Democrats than Republicans after, he said, Democrats hammered them with over-reaching Wall Street reform legislation, people familiar with the presentation said. Bachus told the group, for instance, that the Independent Community Bankers of America had given 68 percent of its contributions to Democrats, according to a lobbyist who was present.

And evidently Bachus’ spiel worked, as Independent Community Bankers of America Executive Vice President Steve Verdier said that “his group has started giving more heavily to Republicans and will end up giving 55 percent of its money to Democrats, down from the nearly 70 percent mark.”

But even if the ICBA — whose members are likely going to profit from Dodd-Frank, as their bigger competitors have a host of new restrictions placed upon them — gives a majority of its money to Democrats, that will be the exception in this cycle. According to the Center for Responsive Politics, “Republican candidates received 34 million dollars in donations from the finance, insurance and real estate sector since January compared to 23 million dollars given to Democrats.”

And when it comes to America’s “too big to fail” banks, donations are all skewing towards the Republicans. Bank of America, JP Morgan Chase, Wells Fargo and Goldman Sachs are all giving a majority of their donations this cycle to the GOP. The Financial Services Roundtable — which represents the country’s biggest financial firms — “has given the GOP $212,000 this round compared with almost $179,000 to Democrats.”

Of course, these kinds of overtures to financial services lobbyists are nothing new for House Republicans. After all, House Minority Leader John Boehner (R-OH) assembled a host of bank lobbyists back in December to develop a strategy for killing financial reform.