In December, the National Labor Relations Board announced that it would seek comment on a regulation requiring private-sector businesses to post a simple, one-page poster informing employees of their rights under the National Labor Relations Act. Among other things, the poster details workers’ rights to form a union, collectively bargain, and raise workplace complaints with a supervisor, as well as their right to forego participating in any of those activities.

This seems like a rather benign regulation, and one with which it would be exceedingly easy to comply. However, Gov. Bob McDonnell (R-VA) feels so strongly about this particular requirement that he criticized it during testimony before the House Education and Labor Committee (which was examining the “state of the American workforce”):

I am concerned –- especially as the Governor of a Right to Work state — about the December announcement of the National Labor Relations Board announcing its intention to publish in the Federal Register a proposed rule requiring almost all private sector employers to post in the workplace a notice to employees outlining their rights under the National Labor Relations Act.

The poster entitled, “Employee Rights” lists seven bullet points that state employees have the right to organize, form or join a labor union and repetitively state they have the right to negotiate their wages, benefits and working conditions with their employer. This is counterproductive and detrimental to the message we are trying to send in Virginia.

So to McDonnell, it is “counterproductive and detrimental” to inform workers of their rights? McDonnell concluded by saying that he hopes Congress “will move aggressively and quickly to remove the obstacles that hinder job growth in our great Commonwealth and nation.” He didn’t explain how a piece of paper hanging on the wall in any way blunts job creation.

McDonnell’s concerns notwithstanding, the proposed poster lays out important information for workers, including a section explaining what employers are not allowed to do if workers decide they want to unionize. In the last few decades, employers have become increasingly brazen in their union-busting activities. Under the NLRB, employers can’t fire workers or threaten to close a workplace if the employees explore unionizing. However, employers threaten to close plants in 57 percent of union organizing drives and threaten to cut wages and benefits in 47 percent, while ultimately firing pro-union workers 34 percent of the time.

A study from the Economic Policy Institute found that over the last 20 years “employer opposition [to unionization] has intensified…and the nature of campaigns has changed so that the focus is on more coercive and punitive tactics designed to intensely monitor and punish union activity.” And if it were up to McDonnell, workers would stay in the dark regarding whether such actions violate their rights and the law.

Protests in Egypt continued for a seventh day today, and pro-democracy demonstrators are organizing a “march of millions” to take place tomorrow. As financial markets dip across the Middle East, financial prognosticators are trying to divine what continued unrest will mean for the economies of the Middle East and the price of oil.

One of the driving factors behind the protests is the decades-long stagnation of the Egyptian economy and a growing sense of inequality. “They’re all protesting about growing inequalities, they’re all protesting against growing nepotism. The top of the pyramid was getting richer and richer,” said Emile Hokayem of the International Institute for Strategic Studies in the Middle East.

As Yasser El-Shimy, former diplomatic attaché at the Egyptian Ministry of Foreign Affairs, wrote in Foreign Policy, “income inequality has reached levels not before seen in Egypt’s modern history.” But Egypt still bests quite a few countries when it comes to income inequality, including the United States:

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

– Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.

– Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.

– And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.

The Gini coefficient is used to measure inequality: the lower a country’s score, the more equal it is. Obviously, there are many things about the U.S. economy that make it far preferable to that in Egypt, including lower poverty rates, higher incomes, significantly better infrastructure, and a much higher standard of living overall. But income inequality in the U.S. is the worst it has been since the 1920′s, which is a real problem.

Currently, the top one percent of households make nearly 25 percent of the total income in the country, after they made less than 10 percent in the 1970′s. Between 1980 and 2005, “more than 80 percent of total increase in Americans’ income went to the top 1 percent.”

According to the latest data, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007.” And there’s even a stark divide within that one percent. “The share of the nation’s income flowing to the top one-tenth of 1 percent of households increased from 7.3 percent of the total income in the nation in 2002 to 12.3 percent in 2007,” the Center on Budget and Policy Priorities noted.

Yale economist Robert Shiller has said that income inequality “is potentially the big problem, which is bigger than this whole financial crisis.” “If these trends that we’ve seen for 30 years now in inequality continue for another 30 years…it’s going to create resentment and hostility,” he said. But tax and spending policies that provide adequate services and allow for economic mobility — along with a robust social safety net — can head off trouble that may come down the road.

Earlier this month, House Budget Committee Chairman Paul Ryan (R-WI) admitted during an appearance at the National Press Club that failing to raise the nation’s debt ceiling when the legal borrowing limit is reached in the coming months is “unworkable.” “Does it have to be raised? Yes, you can’t not raise the debt ceiling,” Ryan said. However, acknowledging that reality didn’t stop Ryan from taking the debt ceiling hostage to unspecified spending cuts and “fiscal controls.”

Today, on Fox News Sunday, Speaker of the House John Boehner (R-OH) pulled a similar stunt. He first said that House Republicans aren’t willing to raise the debt ceiling unless doing so is accompanied by deep spending cuts, but then admitted that failing to raise the debt ceiling would be a “disaster”:

That would be a financial disaster, not only for our country but for the worldwide economy. Remember, the American people on election day said, ‘we want to cut spending and we want to create jobs.’ And you can’t create jobs if you default on the federal debt.

Watch it :

Boehner is right that failing to raise the debt ceiling would be disastrous, rendering his and his party’s threats not to do so quite irresponsible. While Treasury could shuffle money around to avoid default if the debt ceiling is not raised, financial markets would likely be shaken, the government may have to shut down, and, as the Center for American Progress’ David Min pointed out, interest costs on the U.S. debt would spike, making the long-term budget situation worse:

If in the near term these rates moved even to 5.9 percent, the long-term rate predicted by the Congressional Budget Office, then our interest payments would increase by more than double, to nearly $600 billion a year. These rates could climb even higher, if investors began to price in a “default risk” into Treasurys—something that reckless actions by Congress could potentially spark—thus greatly exacerbating our budget problems…In short, a freeze on the debt ceiling would cause our interest payments to spike, making our budget situation even more problematic.

Sen. Lindsey Graham (R-SC) also said that failing to raise the debt ceiling would result in “collapse and calamity throughout the world,” while demanding regressive cuts to Social Security in return for his vote to increase the limit.

Ian Milhiser noted yesterday that Senate Republicans put Sen. Mike “noun, verb, unconstitutional” Lee (R-UT) on the Judiciary Committee, despite his radical ignorance regarding constitutional matters. But that wasn’t the only committee assignment for which the GOP decided that fealty to ideology was more important that acknowledging reality.

Sen. Pat Toomey (R-PA) was one of the financial industry’s biggest apologists during November’s campaign, opposing the Dodd-Frank financial reform law while claiming that derivative deals were “non-risky,” even as they cost schools and cities all across the country (including many in Pennsylvania) millions of dollars. And Toomey has been totally unrepentant about his personal role in deregulating the financial industry.

In 2000, former Sen. Phil “mental recession” Gramm (R-TX) attached the Commodity Futures Modernization Act to an unrelated, 11,000 appropriations bill. The CFMA ensured that the growing market in over-the-counter derivatives, including credit default swaps, stayed entirely unregulated. Toomey — then a member of the House of Representatives — voted for that bill, and said that he would do it again, inaccurately claiming that the legislation “did absolutely nothing to cause the financial crisis.”

So, naturally, Republicans have seen fit to name Toomey to the Senate Banking Committee, which has oversight of the nation’s financial regulatory laws. The committee was instrumental in crafting Dodd-Frank.

Here’s what the Financial Crisis Inquiry Commission — which released its final report yesterday — had to say about the bill Toomey claims did nothing to bring about the financial crisis:

The CFMA effectively shielded OTC derivatives from virtually all regulation or oversight. Subsequently, other laws enabled the expansion of the market…The OTC derivatives market boomed. At year-end 2000, when the CFMA was passed, the notional amount of OTC derivatives outstanding globally was $95.2 trillion, and the gross market value was $3.2 trillion. In the seven and a half years from then until June 2008, when the market peaked, outstanding OTC derivatives increased more than sevenfold to a notional amount of $672.6 trillion; their gross market value was $20.3 trillion.

Ultimately, the FCIC concluded, derivatives “were at the center of the storm.” And yet, Republicans put someone on the Banking Committee who has said that he would go back and deregulate those instruments all over again if he could.

In the course of his career, Toomey’s collected almost $2.5 million from the finance industry. He was also the the president of the Wall Street front group Club for Growth from 2005-2009.

Last week, I wondered whether Senate Republicans would continue to obstruct President Obama’s nominee to run the Federal Housing Finance Agency (FHFA) — North Carolina banking commissioner Joseph Smith — if he were renominated. The GOP ran out the clock on Smith’s nomination last session, but Obama had reportedly been leaning towards submitting Smith’s name for consideration again.

However, that won’t be happening because, as the Wall Street Journal reported, Smith has taken himself out of the running:

The Obama administration’s pick to run the agency that oversees Fannie Mae and Freddie Mac doesn’t want to be renominated after his candidacy ran into strong Republican opposition, a White House official said Thursday…Mr. Smith faced resistance from Sen. Richard Shelby (R., Ala.), who suggested he would be “a tool of the administration.”

The Republicans’ concern with Smith is that he might have been sympathetic to allowing Fannie Mae and Freddie Mac — for which the FHFA acts as chief regulator — to write down mortgages for underwater homeowners (thus reducing the total amount owed on the mortgage, to better match the current value of the house). Smith has never publicly said that he supports such a move, but the Obama administration has been extolling its economic virtues.

At this point, it’s becoming quite clear that Republicans have no interest in addressing the ongoing foreclosure crisis, even though there were more than one million foreclosures last year and will likely be more than one million again this year. Rep. Randy Neugebauer (R-TX) said last week that federal foreclosure prevention efforts “need to stop.”

The Obama administration’s foreclosure prevention efforts have been lackluster, particularly the Home Affordable Modification Program (HAMP), which suffers from design flaws that are blunting its effectiveness. But having Fannie and Freddie reduce payments for underwater homeowners would definitely help, as Treasury Secretary Tim Geithner explained:

Treasury Secretary Timothy Geithner told a congressional panel on Thursday there “is a pretty good economic case for Fannie Mae and Freddie Mac to participate in those programs”…While writing down mortgage principal could lead to larger upfront costs, Mr. Geithner encouraged policymakers on Thursday to take a broader view. “If you do things that improve the odds that home prices will be higher in the future, that defaults will be lower in the future, then you can…reduce the overall losses to the taxpayer,” he said.

The United Kingdom got a sobering bit of news yesterday when it was announced that GDP fell 0.5 percent in the last quarter, raising the specter of a double-dip recession. Growth in the U.K. was flat in October and November before falling in December (which U.K. officials blame on that month’s cold weather).

In response to the economic weakness of the last few years, the U.K.’s coalition government, led by Conservative Prime Minister David Cameron, has embarked on a series of spending cuts, and the opposition Labor Party seized on the contracting economy to question the wisdom of slashing spending at a time when the economy is still clearly weak. The coalition is so concerned with rebutting this narrative that it dispatched Liberal Democratic Deputy Prime Minister Nick Clegg to quell fears, but even Clegg admitted that the U.K. economic plan has had a “chilling psychological effect” on growth.

Meanwhile, back here in the U.S., House Republicans are spreading the theory that cuts in government spending will lead to economic growth and job creation. In fact, House Majority Leader Eric Cantor (R-VA) has called the GOP’s strategy that of a “cut and grow majority.” At Capital Gains and Games, Stan Collender explains how the U.K.’s experience complicates the GOP’s tale:

Over the past few weeks, House Majority Leader Eric Cantor (R-VA) has repeatedly said that Republicans believe that economic activity and jobs will be created with spending cuts. The U.K. experience now belies that claim and provides Democrats with a strong talking point in response: We want the U.S. economy to grow and the failure of the U.K. austerity program shows that what the GOP wants to do in the U.S. will cause the U.S. to fall back into a recession.

Meanwhile, the Recovery Act passed by Congress here in the U.S. boosted GDP in 2010 by between 1.5 and 4.1 percent, according to the Congressional Budget Office, while economists predict that U.S. GDP grew at 3.5 percent last quarter. Of course, the U.K. numbers are early, and there’s no telling where later revisions may take them, but its worth pausing for a moment to consider the contrast between the two nations’ fiscal responses and growth numbers.

The GOP would likely blame the U.K.’s tax increases — adopted as part of its austerity plan — for the GDP fall. However, most of them don’t come into effect until sometime in 2011. As James Meadway, Senior Economist at the New Economics Foundation, wrote regarding Cameron and co.’s cuts, “it’s a marvellous story. Our brave young prince sends the big bad ogre of state spending packing. The magic free market fairy waves her wand. Jobs, growth and the good times return. We all live happily ever after. Alas, reality is starting to look less appealing.”

When the Obama administration first decided it would rescue the U.S. automakers General Motors and Chrysler, Republicans exploded with warnings that such a move would be an inevitable failure, if not the beginning of the end of capitalism. Here are some examples:

SEN. JOHN MCCAIN (R-AZ): “We should have let them go into bankruptcy, emerge and become viable corporations again. The unions didn’t want to have their very generous contracts renegotiated, so we put $80 billion into both General Motors and Chrysler, and anybody believes that Chrysler is going to survive, I’d like to meet them.” [11/19/2009]

SEN. JIM DEMINT (R-SC): “The government has forced taxpayers to buy these failing companies without any plausible plan for profitability.” [06/01/2009]

REP. PAUL BROUN (R-GA): “This is an unprecedented takeover from the private sector by this administration…It is totally unconstitutional, it’s totally against freedom, it’s totally unprecedented, and it’s exactly the same thing that Hugo Chávez is doing down in Venezuela.” [06/09/2009]

REP. TRENT FRANKS (R-AZ): When Washington gets involved in a company, “the disaster that follows is predictable.” [07/22/2009]

REP. LAMAR SMITH (R-TX): The government-led bankruptcy reorganizations of the companies “have been the leading edge of the Obama administration’s war on capitalism.” [7/22/2009]

REP. MICHELE BACHMANN (R-MN): “I’m very concerned again about these motor takeovers from the federal government…We have a gangster government when the federal government has set up a new cartel and private businesses now have to go begging with their hand out.” [06/09/2009]

Aside from the obvious continued existence of capitalism, reality has revealed a very different tale, as The Hill outlined today:

The smallest of the Big Three U.S. automakers appears poised for a comeback less than two years after the government saved it from extinction. Chrysler made a $569 million net profit last year and has $10 billion in hand. It is adding jobs in the U.S. and slowly countering impressions in Washington and elsewhere that it can’t survive. “Over the course of the last 12 months, we’ve raised our outlook significantly,” said George Magliano, senior auto analyst for IHS Global Insight. “Their whole tone has changed over the last six to eight months.”

Of course, Republicans made similar claims about the rescue of GM, saying that it was the “road to socialism.” According to the Center for Automotive Research, “if the government had not invested in the automotive industry, up to 80,000 automotive jobs would have been lost…Once Chrysler and GM emerged from their ‘orderly’ bankruptcies, the growth of automotive sector employment has been strong, with 52,900 workers added since July 2009. Had GM and Chrysler not successfully emerged, those jobs would have been permanently lost.”

ThinkProgress intern Kevin Donohoe contributed research to this post.

Today, the Financial Crisis Inquiry Commission — which was charged with examining the causes of the 2008 financial meltdown — released its final report. The Commission laid out all the excruciatingly painful details of a financial system marred by poor incentives and excessive risk, while explaining all the ignored warnings, regulators asleep at the wheel, and predatory loans which fed into a pipeline of shadowy investments that imploded the balance sheets of the country’s biggest banks. The ultimate message of the report is “this financial crisis was avoidable.”

Of the many things that contributed to the crisis, the Commission noted that derivatives — the financial instruments that brought down, among others, American International Group — “were at the center of the storm“:

The enactment of legislation in 2000 to ban the regulation by both the federal and state governments of over-the-counter (OTC) derivatives was a key turning point in the march toward the financial crisis…One type of derivative — credit default swaps (CDS) — fueled the mortgage securitization pipeline. [...]

Second, CDS were essential to the creation of synthetic CDOs. These synthetic CDOs were merely bets on the performance of real mortgage-related securities. They amplified the losses from the collapse of the housing bubble by allowing multiple bets on the same securities and helped spread them throughout the financial system. Goldman Sachs alone packaged and sold $73 billion in synthetic CDOs from July 1, 2004 to May 31, 207.

“The existence of millions of derivatives contracts of all types between systemically important financial institutions — unseen and unknown in this unregulated market — added to uncertainty and escalated panic, helping to precipitate government assistance to those institutions,” the Commission found.

Fortunately, the Dodd-Frank financial regulatory reform law passed last year included a significant upgrade in the regulation of derivatives. In fact, the derivatives title is one of the strongest parts of the law.

However, House Republicans have taken it upon themselves to undermine derivatives reform by both refusing to fund the agency charged with implementing the new rules, the Commodity Futures Trading Commission, and trying to publicly shame the CFTC into slowing down its efforts. Bloomberg reported today that House Agricultural Committee Chairman Frank Lucas (R-OK) and Rep. Michael Conway (R-TX) are accusing the CFTC of “‘prioritizing speed’ and creating an ‘irrational sequence’ of rules” as it attempts to rein in the derivatives market.

The derivatives market was essentially the Wild West of the financial world before the financial crisis: unregulated, unrestrained, and ultimately unsustainable. But with the effects of the financial meltdown and the Great Recession that followed still being felt by families across the country, the GOP is throwing up roadblocks to prevent new rules from coming online.

As I noted back in December, the continuing resolution under which the federal government is currently operating does not contain funding for federal financial markets regulators — particularly the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — to implement the Dodd-Frank financial reform law. Due to budget constraints, the SEC has already put on hold certain aspects of implementation, while also “failing to follow up on tips about potential wrongdoing and postponing examinations of money managers and brokers who are far from their offices.” The CFTC is facing similar trouble.

This is all part and parcel of the Republican plan to undo financial regulatory reform by simply starving the regulators, preventing them from implementing or enforcing the Dodd-Frank law. And Republicans on the House Financial Services Committee are digging in their heels:

Rep. Scott Garrett (R-N.J.) told The Hill in an exclusive interview that it is “troubling” that financial regulators want to be given more funds and staff after failing to prevent the worst financial crisis since the Great Depression. “It’s only in government, especially in Washington, where you have agencies that failed in their core assignments in the past, and yet they are rewarded with more authority and bigger budgets,” Garrett said during an interview Thursday.

So the Republicans (and not a few Democrats) spent years pulling the threads out of the regulatory framework and appointing regulators who actively ignored their agencies’ missions, and now that a new law is in place to resurrect common-sense safeguards and rules, the GOP says it won’t fund that effort, because the regulators failed last time. It’s a classic case of blaming the government for being ineffective after implementing policies rendering government effectiveness impossible.

Yesterday, Rep. Maxine Waters (D-CA) laid out in stark terms how truly overwhelmed the SEC currently is:

From 2005 to 2007 (during the build up to the crisis that imploded in 2008), the SEC lost 10 percent of its staff. In addition, from 2005 to 2009 the SEC’s investments in information technology declined 50 percent. Let’s put these numbers into perspective. The SEC’s 3,800 employees currently oversee approximately 35,000 entities — including 11,450 investment advisers, 7,600 mutual funds, 5,000 broker-dealers, and more than 10,000 public companies. Furthermore, these staff police companies that trade on average 8.5 billion shares in the listed equity markets alone every day.

As Rep. Barney Frank (D-MA) said yesterday, the funding levels that Republicans want for the regulatory agencies “predate financial regulation, predate regulation of derivatives, and predate investor protection.” Indeed, a 21st-century financial system requires a 21st-century regulatory framework, and the Republican push to starve regulatory agencies of the money they need to operate is simply deregulation by another name.

While there were plenty of noteworthy ideas in President Obama’s State of the Union last night about boosting economic growth and international competitiveness, he did not mention one of the important drags on the current economy: the ongoing housing crisis. In the Republican response, Rep. Paul Ryan (WI) also neglected to mention housing or foreclosures.

Meanwhile, things are only getting worse on the housing front:

A new slide in housing prices has begun in earnest, with averages in major cities across the country falling to their lowest point in many years…Nine of the 20 cities in the index sank in November to new lows for this economic cycle: Chicago; Las Vegas; Detroit; Atlanta; Seattle; Charlotte, N.C.; Miami; Tampa; Fla.; and Portland, Ore.

And the Obama administration’s signature foreclosure prevention program — the Home Affordable Modification Program (HAMP) — continues to underwhelm:

Troubled borrowers continue to fail out of the program at a faster rate than they join. A total of 58,020 loan modifications have been canceled, a nearly 30 percent increase from the 44,972 reported in November, the Treasury report said.

There were more than one million foreclosures last year and there will be more than one million again this year, barring some unforeseen development. Federal foreclosure prevention programs have been woefully inadequate, banks have institutionalized procedures (like the use of “robo-signers”) biased in favor of foreclosures, whole neighborhoods are being blighted by lost homes, and yet neither Obama’s nor Ryan’s address included a word on housing policy.

It’s not like there aren’t decent ideas out there for fixing broken foreclosure prevention programs to make them more effective, fair, and less focused on the bottom line of banks. For instance, we could allow housing counselors to approve HAMP modifications (instead of waiting months as banks lose paperwork and punt the problem down the road). We could make more of a push to implement automatic foreclosure mediation programs, which have been quite successful across the country in preventing foreclosures.

Finally, we could end the absurd practice of “dual-tracking,” under which the foreclosure process continues even while homeowners are under evaluation for a loan modification, which results in families who are eligible for modifications losing their homes anyway. “Can’t we just change this policy and suspend the foreclosure proceedings when a modification is underway, not keep it going forward and create this enormous confusion and stress for America’s families?” asked Sen. Jeff Merkley (D-OR).

Of course, Republicans have essentially ignored the housing crisis since it began, except to blame low-income homeowners for causing both it and the wider global financial meltdown, so its not totally surprising that Ryan avoided the topic in his response.

As expected, President Obama endorsed corporate tax reform in his State of the Union address last night, emphasizing that he is open to lowering the corporate income tax in return for the elimination of the loopholes and credits that are clogging up the corporate tax code, and as long as such reform is revenue neutral (meaning it doesn’t add to the deficit). “Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries,” Obama said. “Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years –- without adding to our deficit.”

As I’ve noted before, the U.S. is facing huge deficits and incredibly shrinking corporate income tax receipts, meaning that failure to raise revenue via corporate tax reform constitutes a missed opportunity. Citizens for Tax Justice agrees. But Republicans are already trying to play down the notion of raising money via corporate tax reform:

Republicans – as Rep. Kevin Brady (R-Texas) put it – said crafting a revenue-neutral plan would be a “challenge.” “We actually need a lower tax rate, rather than just rearranging the complicated code we have,” said Brady, a senior member of the Ways and Means Committee.

For his part, Sen. Rob Portman (R-Ohio) made a similar point, saying that forcing a tax reform package “to be revenue-neutral takes away some of the very benefit you would get from serious tax reform on the corporate side –- which is to make our code more competitive by lowering the cost of doing business in America.”

Senate Minority Leader Mitch McConnell (R-KY) also scoffed at the notion of revenue-neutral reform on MSNBC today:

I think getting the corporate tax rate down to a competitive level is extremely important if we want to create additional American jobs in America, for Americans. How you structure it is something we’ll take a look at. Most tax reform, when you lower rates, does have a goal of being revenue-neutral, but we’ll look at how the administration would propose to, quote, pay for, lowering the tax rate. Most members on my side of the aisle, myself included, are typically skeptical about the Democrats suggested, quote, pay fors, when they’re willing to go alone with a tax decrease.

Watch it:

The fact remains that corporations are hauling in record profits and sitting on nearly $2 trillion in cash reserves, while, corporate tax receipts account for about seven percent of federal revenues. Fifty years ago, corporate tax receipts were 23 percent of federal revenue. The U.S. collects less in corporate tax revenue than the OECD average.

By implementing corporate tax reform that is revenue-positive, Congress would simply be following in the footsteps of Ronald Reagan’s 1986 tax reform. “Despite lowering the statutory corporate tax rate from 46 percent to 34 percent, the 1986 act closed so many corporate loopholes that, it increased corporate income taxes by more than a third,” Citizens for Tax Justice noted. Or is Reagan now too radical on taxes for today’s Republicans?

In last night’s State of the Union, President Obama spent a significant amount of time on matters pertaining to the country’s deficit and debt, committing to continue important investments in things like education and energy while also suggesting a five-year freeze in “non-security” discretionary spending. (Once upon a time, Obama mocked budget gimmicks of this sort.) But overall, the speech was about maintaining a government that can serve an important role in helping America progress the 21st century.

The official Republican response, from House Budget Committee Chairman Paul (R-WI), laid out a very different picture, in which America is headed for a debt crisis and the sort of ugliness associated with European nations like Greece and Ireland. Ryan warned that unless the U.S. immediately starts hacking its budget to bits, “large benefit cuts to seniors and huge tax increases on everybody” will be the only remaining solution:

Speaking candidly, as one citizen to another: We still have time… but not much time. If we continue down our current path, we know what our future will be. Just take a look at what’s happening to Greece, Ireland, the United Kingdom and other nations in Europe. They didn’t act soon enough; and now their governments have been forced to impose painful austerity measures: large benefit cuts to seniors and huge tax increases on everybody. Their day of reckoning has arrived. Ours is around the corner. That is why we must act now.

But Ryan conveniently failed to mention that his preferred vision for addressing the country’s fiscal issues — his Roadmap for America’s Future — involves…wait for it…benefit cuts and huge tax increases! In fact, he plain aims to balance the budget via privatizing Social Security and turning Medicare into a voucher system that doesn’t come close to keeping up with the cost of health care.

At the same time, the plan raises taxes on 90 percent of Americans, and ultimately would result in the effective tax rate for a middle class family being higher than the rate for a millionaire. But still, using Ryan’s own overly optimistic assumptions, the plan wouldn’t balance the budget for 50 years. Why? Because of dramatic reductions in taxes for the very richest Americans and the complete elimination of the corporate income tax.

Though he didn’t deign to mention it, Ryan’s ultimate vision is staving off benefit cuts and tax increases by implementing benefit cuts and tax increases. And while he was at it, Ryan drew a messy comparison between the United States and European countries that bears no resemblance to reality. As Paul Krugman put it, “I guess we’re supposed to take heed of what Ryan believes happened in Europe, never mind that it isn’t what actually happened.”

Today, the House of Representatives voted on a resolution granting House Budget Committee Chairman Paul Ryan (R-WI) the ability to unilaterally set non-defense discretionary spending, at least in the eyes of the House, at the 2008 level (while conveniently punting any specific spending cuts until later in the process). Every Republican (along with 17 Democrats) voted in favor of the resolution.

This vote, of course, comes on the heels of a campaign which the Republicans made “where are the jobs?” their mantra. As I noted earlier, they followed up that campaign by bringing multiple pieces of legislation to the floor that had nothing to do with job creation, while proposing to cut job training programs. But the discretionary spending cut they voted for today would be even worse for job creation.

In fact, as the Economic Policy Institute calculated, “making these cuts to the discretionary budget would reduce the number of jobs available significantly,” to the tune of almost 600,000:

Okun’s rule of thumb states that when gross domestic product (GDP) declines, there is a correlating increase in unemployment. A $60 billion cut, when assigned a fiscal multiplier of 1.5, would impact GDP by roughly $90 billion for the rest of this fiscal year alone. This would result in a decline in output by a little more than one-half of a percentage point of GDP, resulting in a loss of around 590,000 jobs.

“While the GOP leadership has been busy labeling many of the opposing party’s initiatives as ‘job-killing,’ their very own proposal to cut discretionary spending for the rest of this fiscal year would have a very clear negative impact not only on important social programs, but also on our jobs picture,” wrote EPI’s Rebecca Thiess. The Republican Study Committee, in which 175 House Republicans claim membership, has released an even more destructive plan, which would cut discretionary spending back to the 2006 level and hold it there until 2021 (the RSC’s plan also, conveniently, leaves most of the specific cuts to be identified at a later date).

In addition to the lost jobs, these cuts would hack into important and popular programs that are important to long-term economic development, like Pell Grants. As the Center for American Progress’ Adam Hersh wrote, “budget policy requires careful attention to the country’s immediate economic needs — securing the economic recovery and creating jobs for the nearly 15 million people unemployed and looking for work — while ensuring we make the investments necessary for America’s long-run competitiveness and economic prosperity.” With today’s vote, the House Republicans accomplished neither.

House Republicans rode into the majority on campaign promises to “focus on jobs.” “I got to tell you, when I’m home in Muncie, Indiana, people are asking the question, ‘Where are the jobs?’” said Rep. Mike Pence (R-IN), parroting the popular Republican refrain.

However, once in office, the GOP has all but ignored the issues of job creation and the economy. Their very first bill was a symbolic repeal of the Affordable Care Act that is destined to languish in the Senate or fall to Obama’s veto pen, while their second bill had to do with restricting the rights of private health insurers to cover abortions.

Not only are Republicans completely ignoring job creation, but they are also actively trying to undermine important efforts to boost employment. For instance, Rep. Michele Bachmann (R-MN), who is delivering the Tea Party response to President Obama’s State of the Union tonight, suggested in a list of proposed spending cuts that the government “eliminate federal job training programs.”

Sen. Tom Coburn (R-OK) said on MSNBC today that he also has his eye on job training programs, which were on his list of items that he claims he can “whack from this budget and [have] nobody feel it.” Watch it:

It seems fitting that, while paying lots of lip-service to job creation, Republicans would actively abandon programs meant to help people find jobs. Particularly at a moment when long-term unemployment is sky high (with 44.3 percent of the unemployed having been out of work for six months or more) it is critical that people be aided in learning new skills that might enable them to transition into a new industry.

But there are plenty of valid criticisms regarding current job training programs, which seem to be almost universally terrible. The main avenue for these programs — the Workforce Investment Act — was written in 1998 when, as the New York Times put it, “simply teaching jobless people how to use computers and write résumés put them on a path to paychecks.” Current programs are too short, and don’t give workers real technical skills, leaving them in a thankless cycle of low-paying, low-skill jobs.

But, contrary to the GOP’s wishes, the answer isn’t to abolish these programs and leave unemployed workers to the wolves, but to find successful programs and emulate them. The I-BEST program in Washington state, for instance, is doing good things providing unemployed workers with technical skills for higher-paying jobs. Louis Soares explains how training programs at community colleges can be a successful model here, while Liz Weiss explains how to make training programs more effective for women workers here.

In his State of the Union address tonight, President Obama is expected to make the case for government investment in areas that promote economic growth: infrastructure, education, and energy. And House Republicans have seized on this intention in an interesting way.

As George Zornick noted yesterday, the GOP seems to believe that “Obama’s calls for ‘investment’ are simply a conspiracy to increase federal spending.” “When we hear invest from anyone in Washington, to me that means more spending,” said House Majority Leader Eric Cantor (R-VA). “When the President talks in his speech about investment, the American people need to understand that translates into spending,” reiterated Sen. John Thune (R-SD).

As Zornick put it, “obviously, government investment in education, energy, infrastructure and other areas would necessarily involve federal spending, and Obama is not attempting to hide that.” And Cantor himself admitted in an interview yesterday that the state of U.S. infrastructure is unacceptable:

Cantor acknowledged the need to “address” the nation’s aging transportation system, and cited congested and outmoded aviation networks and crumbling roads and bridges as national concerns. “I don’t think anybody would tell you that our nation’s transportation infrastructure is in a state of existence that we would accept,” he said.

Cantor is certainly correct that the state of U.S. infrastructure is shameful, though he dodged on the obvious solution (Hint: government investment!). According to the latest Report Card for America’s Infrastructure from the Army Corps of Engineers, it would take a $2.2 trillion investment to get America’s infrastructure into good condition, including $930 billion for roads and bridges and another $160 billion for schools.

But even as Cantor acknowledges this reality, House Republicans are ready to take a hatchet to the infrastructure budget (while their states crumble around them). The Republican Study Committee last week proposed cuts to passenger and high-speed rail, while Rep. Michele Bachmann (R-MN), who is delivering the Tea Party response to the State of the Union, wants to cut the federal highway program and federal grants to airports. These suggestions come at a time when “some 85 percent of all transit agencies across the country have been forced to cut service, raise fares, lay off employees or all three during this economic downturn.”

On its face, the GOP assault on investment is a silly word game, but at its core, it reinforces the counterproductive belief that government has no role in providing roads that are drivable, water that is safe to drink, or schools that can educate a 21st century workforce. Hopefully Obama makes a strong case for the competing vision — that our long-term economic competitiveness means making smart investments now in the things that will pay off later.

In an address to the Cobb Country Chamber of Commerce today, Sen. Johnny Isakson (R-GA) called one of the most regressive changes that could be made to Social Security — raising the retirement age — a painless fix for keeping the program solvent in the long-term:

The deficit commission said, you know, if you just change [the retirement age] and by the year 2075 you make that 69 years for the eligibility age and you take the cap and raise the cap by five percent on the taxable income that you apply to the payroll tax, you save Social Security. Now there are people, interest groups that are out there, who don’t believe in shared sacrifice, are already saying that destroys Social Security. It doesn’t destroy it, it saves it…Social Security is fixable, actuarially and painlessly.

Watch it:

Contrary to Isakson’s assertion, an increase in the retirement age would actually be quite painful for many Americans. Raising the retirement age would cut benefits for middle-class retirees, exasperate income inequality and disproportionately affect low-income earners whose life expectancies have stagnated in the past three decades (as changes in life expectancy have largely mirrored changes in income inequality).

Yet Isakson and other Republican leaders such as Govs. Tim Pawlenty (R-MN) and Mitch Daniels (R-IN) have enthusiastically endorsed raising the retirement age while ignoring its impact on low-income workers. Isakson’s other proposed reform — raising the cap on taxable income for Social Security — would be a much more progressive and effective change that would help the program keep paying full benefits for the next 75 years. Even with no changes, Social Security will pay full benefits until 2037 and close to full benefits for decades after that.

Isakson — the 46th richest member of Congress — even went as far to call opponents of raising the retirement age “interest groups who don’t believe in shared sacrifice.” Yet recent polling has shown strong support even among Tea Party members for raising the income cap rather than cutting benefits.

– Kevin Donohoe

Last month, Rep. Spencer Bachus (R-AL) — who has now officially been named the chairman of the House Financial Services Committee — explained that, in his view, “Washington and the regulators are there to serve the banks.” And it seems that the rest of the Republicans on the Financial Services Committee are coalescing around their chairman’s philosophy.

Last week, Rep. Scott Garrett (R-NJ), who is chairing the Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, said that he wants to implement a mortgage finance system that is entirely private, jeopardizing the very existence of the 30-year mortgage on which so many families rely. And in a speech today, Rep. Randy Neugebauer (R-TX), Chairman of the Subcommittee on Oversight and Investigations, said that he wants all foreclosure prevention efforts to be halted immediately:

“All these foreclosure mitigation initiatives we’re taking need to stop,” he said, speaking at an event co-hosted by the University of Maryland’s Robert H. Smith School of Business and the NYU Stern School of Business. Neugebauer said the private market should be allowed to work through the problems in the housing market without “administration pressure” to avoid foreclosures. “Markets aren’t kind, but they’re very efficient,” he said. “There were people who were put in their homes that probably never should have been there before.”

Neugebauer is parroting the conservative vision of the housing crisis — which to them was caused entirely by government policies encouraging homeownership amongst those who couldn’t afford it — so it’s not surprising that he thinks the government should get out of the foreclosure prevention business. But the actual problems in the housing market bear little resemblance to those Neugebauer outlined.

For one thing, leaving aside that many of the borrowers who faced foreclosure early in the housing crisis were hoodwinked by predatory lenders, the foreclosure crisis long ago migrated out of subprime loans and into prime loans, as people lost their jobs in the Great Recession. So a crisis created in large part by the shenanigans of bankers then walloped homeowners, who become unemployed through no fault of their own. Neugebauer’s prognosis also ignores the problem of underwater homeowners, who, again, through no fault of their own, now owe more on their mortgage than their home is currently worth, due to plunging home prices.

Meanwhile, one million homes were foreclosed upon last year, and real estate analysts say that another one million will go into foreclosure this year. This not only harms the individual borrowers, but the wider economy, dragging down home values for everyone else and blowing holes in bank balance sheets.

The administration’s foreclosure prevention efforts have, admittedly, left a lot to be desired, but that’s because they involve lots of carrots for banks to modify mortgages, but few sticks, while banks have institutionalized systems biased in favor of foreclosure (like their use of “robo-signers“). Neugebauer’s approach would simply remove the limited help current foreclosure prevention efforts provide, leaving homeowners to the mercy of the very banks whose negligence helped drive the housing crisis in the first place. For some ideas on how to properly reform foreclosure prevention programs, visit here, here, and here.

Gov. Rick Perry (R-TX), who has raised his national profile by repeatedly criticizing the Obama administration’s response to the Great Recession, found out earlier this month that his state’s deficit for the 2012-2013 fiscal years is twice what he had thought. (Texas, unlike the federal government and many states, has a two-year budget cycle.) After months of criticizing the fiscal policies of the Obama administration and touting “the hard work that Texas and states like ours have done to make prudent fiscal decisions,” Perry wound up facing a budget fiasco on par with that in California.

Perry’s previous budget would also have been in significantly worse shape were it not for the American Recovery and Reinvestment Act (i.e. the stimulus), which the Texas legislature used to balance its budget, even as Perry scored tons of political points grandstanding against a small portion of the funds. And as it turns out, according to a report from the National Conference of State Legislatures, Texas relied more heavily on stimulus funding to fill its budget hole than any other state:

Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures. Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.

When he made a show of rejecting some Recovery Act money, Perry said “this was pretty simple for us…We can take care of ourselves.” In addition to filling nearly his entire budget gap with Recovery Act funds, Perry also used the Build America Bonds program — created as part of the Recovery Act — to fund billions of dollars in infrastructure projects. He also grandstanded against — and then promptly accepted — federal funding meant to prevent teacher layoffs.

Perry is hardly alone amongst GOP governors in bashing the stimulus and then turning around and taking advantage of the important funding it provided. Govs. Mitch Daniels (R-IN) and Chris Christie (R-NJ) have done much the same thing. But Perry was the only one threatening secession as a response to government spending, even as his state took advantage of that spending more than any other.

Last week, House Majority Leader Eric Cantor (R-VA) called for “elements” of House Budget Committee Chairman Paul Ryan’s (R-WI) radical “Roadmap for America’s Future” — which purports to balance the budget via draconian cuts to Social Security, Medicare, and Medicaid — to be included in the 2011 budget. Cantor’s call came after the Republican leadership spent the last congressional session backing away from Ryan’s plan.

On Meet the Press yesterday, the garbled message from the GOP continued, with Cantor telling host David Gregory that the “direction in which the Roadmap goes is something we need to embrace”:

CANTOR: David, we’ve–we have a program that we have seen one of our members, Paul Ryan, the chairman of the Budget Committee, put together called the “Roadmap.” And he and Kevin McCarthy and I wrote a book together, and in that book we reserved a chapter for a discussion about Social Security, about Medicare, and how we can begin to at least discuss to do that. [...]

GREGORY: How about–and the irony of Paul Ryan being introduced, the budget chairman, and he’s doing the response to the State of the Union, he is the one who’s proposed draconian cuts to Social Security and to Medicare and Republicans don’t stand behind him.

CANTOR: David, that’s not true. I just told you that we put a chapter in our book about it because the direction in which the Roadmap goes is something we need to embrace.

Watch it:

Gregory repeatedly pressed Cantor on which aspects of the Roadmap he wants to implement — including cutting Social Security benefits via privatization and a raise in the retirement age — but Cantor refused to specifically endorse anything. For the record, in addition to gutting Social Security, the Roadmap also calls for privatizing Medicare and implementing a tax reform package that manages to raise taxes on 90 percent of Americans and still lose $2 trillion in revenue over ten years due to dramatic tax reductions for the wealthiest Americans.

Under the Roadmap, effective tax rates will be higher on the middle class than for millionaires. Not only that, but the Roadmap would actually fail to stem the growing national debt. As the Center on Budget and Policy Priorities pointed out, under the Roadmap, “the debt would continue to grow in relation to the size of the economy for at least 40 more years — reaching over 175 percent of GDP by 2050. Even by 2080, the debt would still equal about 100 percent of GDP.”

It’s possible that Cantor — like his and Ryan’s co-author, Rep. Kevin McCarthy (R-CA) — doesn’t actually understand what the Roadmap would mean in practice. But the likelier story is that the Republicans would love to implement the Roadmap, but understand that such draconian cuts would be immensely unpopular, so they continually mention the document while leaving aside all of its specifics.