Rep. Spencer Bachus (R-AL), who will likely be the next chairman of the House Financial Services Committee due to the Republican victory last night, has signaled his intent to weaken a series of provisions in the Dodd-Frank financial reform law, including the Volcker rule and the resolution authority for dismantling failed banks. And he told the Wall Street Journal this morning that he also “plans to rewrite the derivatives provisions” in the law:

“That’s one of the job-killing provisions of Dodd-Frank that needs to be addressed,” the Alabama Republican said in an interview Wednesday morning, calling the provisions “overly expansive.” Mr. Bachus said the new derivatives rules, which will require most routine swaps to be traded on exchanges and routed through clearing houses, will redirect as much as $1 trillion from the U.S. economy, draining capital from the financial system that could be used for loans or job creation.

During the debate over Dodd-Frank, Bachus had an utterly incoherent position on derivatives reform, calling for transparent derivatives markets while opposing all reforms that would increase market transparency. Now, it seems, he’s ready to carry Wall Street’s water by dialing back the requirements designed to bring currently unregulated derivatives trading out of the dark.

This is troubling, as the derivatives title is one of the strongest parts of the Dodd-Frank bill, bringing much needed regulation to a portion of the financial system that suffered from a severe lack of oversight. Remember, it was AIG’s issuing of billion in credit default swaps that it couldn’t honor that led to its downfall; Lehman Brothers was also sunk by exposure to derivatives. The derivatives title of Dodd-Frank — authored by outgoing Sen. Blanche Lincoln (D-AR) — sets up exchanges so that derivatives must be traded publicly (like stocks) and employs clearinghouses to ensure that both parties in a derivatives trade have adequate collateral backing it up.

What House Republicans will likely aim to do — if their rhetoric during the financial reform debate is any indication — is try to grant wide exemptions to the exchange and clearing requirements, letting all sorts of activity that is purely speculative continue unabated.

But Commodity Futures Trading Commission Chairman Gary Gensler, who has been one of the staunchest supporters of strong derivatives reform, is pushing back, saying the election yesterday won’t interrupt the CFTC’s rule-writing effort. “Any regulatory agency is obliged to follow the statute and what Congress wrote, and that’s what we’ll do,” Gensler said.

Republicans, in the wake of their large gains in last night’s elections, are claiming that the result was a referendum on government tax policy and a clear indication that Americans want less government spending. “If there is a verdict in this election it’s that we shouldn’t raise taxes,” said Rep. Mark Kirk (R-IL), who won his state’s open Senate seat. “Instead, we should cut spending.”

However, looking at the tax and spending ballot initiatives in various states, the message is not so clear. While some anti-tax provisions were approved, others were resoundingly defeated. “Voters are not willing to go so far as to start to disassemble state government,” said Jennie Bowser of the Natoional Conference of State Legislatures. “They recognized there are programs and services they benefit from and they want them to continue.” Here is a rundown of the top anti-tax and spending initiatives that were on the ballot. First, the good news:

– Colorado’s ‘Ugly 3′ Overwhelmingly Defeated: Colorado’s three anti- tax initiatives — Amendments 60 and 61 and Proposition 101 — were all soundly defeated, with ‘no’s’ garnering around 70 percent for each. The measures would have cut property taxes and automobile registration fees and prevented the state government from borrowing.

– Massachusetts Sales Tax Cut Defeated: The Bay State’s voters defeated a measure that would have cut the state sales tax in half — costing $2 billion in revenue — 53-47 percent.

– California Budget Reform Approved: California approved a measure — Proposition 25 — allowing the state’s budget to be passed by a majority vote of the legislature, instead of only a two-thirds vote.

But on the flip-side:

– Indiana Property Tax Cap Approved: Indiana voters institutionalized in their state Constitution a regressive property tax cap that will give a tax break to the wealthiest homeowners but do little for everyone else. The measure had the staunch support of Gov. Mitch Daniels (R-IN).

– Washington State Income Tax For High Earners Defeated: Voters in Washington state defeated a measure that would have implemented an income tax on those making more than $200,000 per year, with the funding dedicated to education, by a 65-35 percent margin.

– California Fee Amendment Approved: A measure requiring that a two-thirds majority of the legislature approve fee increases was approved by Golden State voters.

The mixed bag of results when it came to these ballot questions shows that a simple “anti-tax and spending” narrative for the election doesn’t hold much water. As the New York Times’ David Leonhardt put it, “in yesterday’s ballot initiatives on taxes, voters mostly chose the status quo, rejecting measures that would have raised new taxes but also those that would have repealed existing ones.”

Republicans on the House Financial Services committee have made no secret of their desire to defund and defang portions of the Dodd-Frank financial reform law, particularly the newly-created Consumer Financial Protection Bureau (which does not stand on its own, divorced from the Congressional appropriations process, until July 2011). And now that they’ve gained a majority in the House of Representatives, the GOP’s game plan is kicking into gear.

Last night on CNBC, the potential House Majority Leader, Rep. Eric Cantor (R-VA), said that House Republicans fully intend to deny funding to regulators seeking to implement the Dodd-Frank bill because, according to Cantor, “that’s what the American people are expecting”:

CANTOR: The House has the power of the appropriations process and the leverage that comes with that essentially puts us in a position to deny the administration funding for promulgating the regulations that carry through the missions of these two bills…And that’s what the American people are expecting. They want us to focus on job creation first they results.

BARTIROMO: So that’s what you’re going to do? You’re going to deny funding then? That’s one of your tools in the toolbox, deny funding?

CANTOR: Well, it is a check that this public is looking for on this runaway agenda of this administration. They don’t want to see any more spending, especially if it promotes policies that kill jobs. That’s what you’ve got, both with the Obamacare bill and the Dodd-Frank bill.

Watch it:

First off, according to Gallup, financial reform is the lone piece of legislation from the 111th Congress of which a majority of Americans approve. In fact, 61 percent of the public favors the bill.

In an interview with Bloomberg News last night, Financial Services Committee member Jeb Hensarling (R-TX) said that Republicans plan to “ensure that regulators such as the Commodity Futures Trading Commission and the new consumer protection bureau do not write rules that lawmakers consider too restrictive on the banking industry.” “We don’t want them to regulate capriciously, arbitrarily, without engaging in a cost-benefit analysis,” he said. The Big Picture’s Barry Ritholz said that Hensarling’s pronouncement is “representative of a misguided economic cost/benefits analysis that was dominant during the three decades incorporating 1980s-2000s. Its fatal flaw is that it fails to include the expenses and impact of high cost events — like the 2007 recession, 2008 credit crisis, and 2009 market collapse.”

In addition to denying the regulators funding if they write rules that the GOP considers too restrictive, Republicans could also bog down the rule-writing process by hitting regulators with a slew of subpoenas and hearing appearances. And in the meantime, Wall Street will be free to go back to the risky practices that led to its — and the economy’s — downfall.

During this campaign season, many Republicans were loathe to lay out any spending cuts that they would make in order to offset their desire to extend all of the Bush tax cuts. Extending the entirety of the Bush tax package would cost nearly $4 trillion over ten years, including about $830 billion to extend the cuts for the richest two percent of Americans alone. House Republicans, though — including Pledge to America architect Rep. Kevin McCarthy (R-CA) — simply said that they would cut discretionary spending across-the-board to offset that cost. “The line item would be across-the-board,” McCarthy asserted.

Even though election night was upon them and a new majority secured, House Republicans weren’t any more willing to lay out specific spending cuts last night. Rep. Marsha Blackburn (R-TN) told MSNBC’s Chris Matthews that the most important thing that Congress can do is extend the Bush tax cuts. But when Matthews pressed her for spending reductions, Blackburn only named parts of the budget that she has deemed off-limits for cuts. Rep. Eric Cantor (R-VA) did the same, refusing to name a specific cut in two separate interviews. Watch a compilation:

Contrary to one of Blackburn’s assertions, defense spending is part of the discretionary budget. The Sustainable Task Force — composed of Rep. Barney Frank (D-MA) and some of the nation’s leading defense and budget experts — has identified nearly $1 trillion in waste that can be cut from the defense budget over the next ten years by simply eliminating unnecessary Cold War-era programs.

Blackburn and Cantor seem to be under the impression that there is nothing that matters in the non-defense discretionary portion of the budget. But that portion of the budget includes all federal education funding, some veteran’s benefits, the FBI, the Drug Enforcement Administration, Immigration and Customs Enforcement, the Secret Service, federal highway funding, the National Park Service, the Coast Guard, and Congress itself.

Will House Republicans be reducing all of those across-the-board? It isn’t likely, which means that that they will have to make even deeper cuts to some programs to achieve their desired savings. Of course, they could just be confirming that they agree with Sen. Mitch McConnell’s pronouncement that giving tax breaks to the rich is deficit spending that Republicans support!

The Center for American Progress, meanwhile, has identified $100 billion in defense programs (that won’t compromise national security), $45 billion in subsidies to oil companies, $1 billion in tax expenditures for big agricultural firms, $2 billion in unnecessary stock ownership incentives for the rich, and hundreds of millions in redundant or duplicative education programs that could be cut.