When last we visited the Home Affordable Modification Program (HAMP) — which is the Obama administration’s signature foreclosure prevention program — it was badly sputtering, spending little of the money allocated to it. More borrowers were being booted from the program mid-stream than were receiving permanent mortgage modifications.

The Congressional Oversight Panel released a report today that doesn’t make the picture any prettier. To date, HAMP has processed about 500,000 permanent loan modifications, out of 1.4 million trial modifications that have been initiated. And the redefault rate (meaning the number of borrowers who again fall behind on their mortgages, post-modification) is an ugly 21 percent:

Figure 19 shows that although only around 1 percent of permanent modifications are 90+ days delinquent within their first three months, the number jumps to 5.5 percent by month six and 11 percent by month nine; within a year, 21 percent of HAMP permanent modifications are 90 or more days delinquent, at which point they are disqualified from the program.

As Naked Capitalism’s Yves Smith noted, “HAMP should have done much better by virtue of putting borrowers through a trial mod, plus offering deeper payment reductions than typical private mods. How much better is an open question, but a 21% first year redefault rate says the program will fall far short of Treasury’s goal that the program would show only 40% defaults over the five year ‘permanent’ mod time frame.” Indeed, by just about any measure, HAMP has underwhelmed.

At this point, the Congressional Budget Office estimates that just $12 billion of the $50 billion dedicated to foreclosure prevention will be spent, which brought Mike Konczal to note that some members of Congress explicitly voted to release the second tranche of TARP funds because it included help for homeowners that has yet to materialize:

In exchange for getting the second half of TARP, the Obama administration promised publicly to dedicate at least $50 billion for foreclosure relief and to push for mortgage modification…People took votes, politically difficult and unpopular votes, because of these promises, and they have failed to be delivered.

HAMP has suffered from a nasty confluence of bank intransigence, design trouble, and lack of concern over its poor performance. While Congress and the administration grapple with just how big a tax cut to give to the richest estates in the country, a few moments dedicated toward fixing this fundamentally flawed program are certainly in order. Here are a few suggestions.

The most odious part of the tax deal agreed to by the Senate yesterday is that it would cut the estate tax beyond the 2009 level, giving the wealthiest 0.25 percent of households in the country billions in tax breaks that will do nothing to spur job creation. But it was reportedly the estate tax cut that ultimately got Republicans to sign onto the agreement with President Obama (making quite plain where their priorities lie).

In order to justify making tax cuts for the ultra-wealthy the price of extending middle-class tax cuts and unemployment benefits, Republicans have resurrected the conservative fiction that cutting the estate tax will somehow help small businesses. Sen. Jon Kyl (R-AZ) — one of the architects of the estate tax cut included in the deal — took to the Senate floor today to claim that the cut “is not about giveaways to the wealthy,” but rather “small business employers”:

The effect of the compromise will be to eliminate the “death tax” liability for about 90 percent of estates that would otherwise owe exorbitant sums. And according to the Institute for Research on Economics and Taxation, the “death tax” reform proposal in this bill will add more than $200 billion in annual economic growth relative to current law. So this is not about giveaways to the wealthy, as some have asserted. Most of the people helped by this measure are small business employers.

Watch it:

Kyl’s assertion has absolutely no basis in reality. According to the Tax Policy Center, at the 2009 level favored by President Obama and Congressional Democrats, just 6,460 estates in the country would be subject to the estate tax in 2011. Kyl’s plan spends $25 billion to lower this to 3,600. Of these 3,600 estates, just 50 could charitably be characterized as small businesses.

Even under Obama’s original proposal, just 110 small businesses in the country would have been subject to the estate tax, and their average effective estate tax rate would have been about 11 percent. For the exceedingly few businesses that might have trouble paying the tax, there are options in place to mitigate the pain. And while Kyl asserts that cutting the estate tax would somehow be a boon for economic growth, CAP’s Michael Ettlinger and Michael Linden characterized the estate tax cut’s impact on job creation as “negligible.”

As Eliot Spitzer pointed out, “the additional $25 billion [to cut the estate tax] is six times what we’re spending on Race to the Top and three times what was allocated in the stimulus to build high-speed rails.” And contrary to what Kyl would have us all believe, the money would almost all be spent to benefit the richest of the rich.

Yesterday, the Senate approved the tax deal that President Obama negotiated with Congressional Republicans by an 83-15 vote. The legislation now moves to the House, where Democrats are saying that they might tinker with the estate tax cut that Republicans are insisting upon.

But it isn’t only on the left that opposition to the deal exists. A few House Republicans have disparaged the deal for including too few tax cuts and too much help for the jobless. In a USA Today op-ed today, former Gov. Mitt Romney (R-MA) — who is consistently mentioned amongst GOP 2012 hopefuls — came to the same conclusion, saying that a two-year extension of all of the Bush tax cuts is too short, while a one-year extension of unemployment benefits is too expensive:

One thing is certain: While we cannot rebuild our flawed system [unemployment insurance system] overnight, we are surely not required to borrow the funds to pay for it. In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.

Romney also criticizes the deal’s payroll tax reduction for adding to the deficit. But then, in order to get around the fact that he favors permanent extension of the entire Bush tax cut package (at a cost of $4 trillion over the next decade), Romney asserts that such an extension will actually increase revenues:

In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation.

When it comes to the Bush tax cuts, revenue surely did not increase. In total dollars, the government collected about $1 trillion in income tax receipts in 2001, according to the Office of Management and Budget. This fell below one trillion for the next five years following the Bush tax cuts, not climbing above that level again until 2006. In 2000, the government collected 10 percent of GDP in personal income taxes, a percentage that has never again been reached.

Romney is twisting himself in circles to justify his opposition to the tax deal on fiscal responsibility grounds, while simultaneously advocating for a full extension of the Bush tax cuts, no matter their effect on the deficit. This should once again call into question why Romney has a reputation as the GOP’s go-to-guy on the economy.