Republican members of the House Financial Services Committee have made a lot of noise about finding ways to defund the Consumer Financial Protection Bureau, the new regulatory agency created as part of the Dodd-Frank financial reform law. Incoming Financial Services Committee Chairman Spencer Bachus (R-AL) has said that he wants to, at the very least, subject the Bureau to the annual Congressional appropriations process (whereas the Dodd-Frank law stipulates that the Bureau receive an independent stream of funding from the Federal Reserve).

And it seems that Bachus has earned at least one ally in the upper chamber — outgoing Sen. Judd Gregg (R-NH):

Republicans will “try to take a look at some of this stuff such as the consumer agency for example, making it at least at a minimum subject to appropriation oversight so it’s not a totally independent relative stream of revenue,” said Sen. Judd Gregg, a retiring New Hampshire Republican who serves on the Banking Committee. Gregg said such a move should be popular since lawmakers would prefer having more oversight power. “It shouldn’t be very difficult at all, because why wouldn’t the Congress want oversight of an agency that important?” he said.

In two days, Gregg will become a former senator, and he’s using his final days in office to take one last whack at a good law that he fought strenuously against.

Of course, Congress already does have an oversight function when it comes to the Bureau: it has to confirm the Bureau’s director. Harvard Law Professor Elizabeth Warren — who is currently heading the agency as it gets off the ground, under the umbrella of the Treasury Department — is reportedly searching for the person who will become the first official director, and who will have to come before the Senate.

But oversight is very different from politicizing the agency, which could occur if the Bureau were subjected to the annual appropriations process. The rationale for giving the Bureau an independent stream of funding is to prevent appropriators from pushing a political agenda through the agency by threatening funding cuts. The Federal Reserve and the Securities and Exchange Commission have independent budgets for the same reason.

There are plenty of other ways in which a regulatory agency can still be rendered useless: the Bush administration, for instance, simply appointed regulators, like former SEC Chairman Chris Cox, who didn’t have any interest in actually regulating. But an independent source of funding at least ensures that an agency doesn’t have to agree to whatever policy prescriptions will please Congress and enable it to keep the lights on.

As various parties pointed out last week, the new House rules proposed by the incoming Republican majority would endow House Budget Committee Chairman Paul Ryan (R-WI) with what the Center on Budget and Policy Priorities characterized as “stunning and unprecedented” new powers to set federal spending limits that are binding on the House. As David Dayen explained, the rule change is “really a way for a budget resolution to pass without anyone having to take a vote on it,” and then House appropriators will be bound by whatever spending level Ryan thinks is appropriate.

It seemed likely that Ryan’s first step would be to embrace the spending limit set out in the House GOP’s “Pledge to America,” which calls for immediately reducing non-defense discretionary spending to the 2008 level. In a statement, Ryan has now confirmed his plan is exactly that:

When we get those projections, as outlined in the House Republicans’ Pledge to America, I plan to file a discretionary spending limit that would take non-security spending back to its pre-bailout, pre-stimulus spending levels. Other Federal spending and revenue levels will be established as outlined in the Congressional Budget Office’s forthcoming baseline, with the adjustments provided in the Rules package to prevent taxes from rising and to make possible a repeal of the costly health care overhaul.

The second half of Ryan’s pronouncement is a sneaky way of saying that the new rules exempt repeal of the Affordable Care Act from the budget restraints, since repealing the Affordable Care Act will actually increase the deficit.

As I’ve explained quite a few times, a literal reduction in all programs to the 2008 level is going to take a huge chunk out of vital and popular programs and agencies like Pell Grants, federal highway funding, the National Park Service, federal education funding, cancer research, Immigration and Customs Enforcement, the Drug Enforcement Administration, and the FBI. And every exemption that the GOP offers means that a larger chunk must be taken out of everything else to get total spending to the arbitrary 2008 level.

Of course, no matter what cockamamie scheme the House GOP adopts to empower Ryan as budget overlord, the Senate can’t be bound by House rules. Thus, anything that the House passes will still be subject to negotiations with the Senate. But still, the new rules would leave the House Budget process in the hands of a lawmaker whose ideal budget privatizes Social Security and Medicare, and reduces taxes on the richest 10 percent of households while raising them for the other 90 percent.

A handful of Republican Congressmen — including Sen.-elect Mike Lee (R-UT) and Rep. Michele Bachmann (R-MN) — have announced that they will oppose increasing the nation’s debt ceiling the next time it comes up for a vote, essentially saying that they are okay with a government shutdown or the myriad consequences of the U.S. defaulting on its debt obligations. RNC Chairman Michael Steele even drew a hard line in the sand, saying “we’re not going to compromise on raising the debt ceiling.”

Other Republicans, however, are planning to use the debt ceiling vote and imminent economic chaos as an opportunity to wring concessions from Senate Democrats and President Obama. On Meet the Press yesterday, Sen. Lindsey Graham (R-SC) said that he would not vote to increase the debt limit unless a plan is adopted to cut Social Security benefits via raising the retirement age:

GRAHAM: This is an opportunity to make sure the government is changing its spending ways. I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means-tests for benefits. [...]

GREGORY: That’s a big condition just on Social Security alone.

GRAHAM: Yeah, it is!

GREGORY: You think Republicans are prepared to follow you and two things you said: raise the retirement age and means-test benefits for older Americans?

GRAHAM: I would suggest that if we’re serious about taking America in a new direction and you’re not putting entitlement reform on the table, you’ve missed a great opportunity to change the course of America’s future.

Watch it:

Graham added that he’d also vote against increasing the debt limit unless non-defense discretionary spending is reduced to the 2008 level, which is a key plank in the House Republican “Pledge to America.” But it’s Graham’s insistence that regressive cuts to Social Security be the price of avoiding government default that should be the headline-grabber.

Remember, the Social Security program can’t add to the national debt, and in its present state will pay out full benefits until 2037 (and close to full benefits for decades after that). Tying Social Security to a debate over the national debt simply makes no sense.

And while there are progressive changes to Social Security that can be made to guarantee its long-term solvency and increase benefits for those who most rely upon the program, raising the retirement age is the most regressive step available to would-be Social Security reformers. Such a move would ultimately “cut benefits for tens of millions of middle class workers who are overwhelmingly dependent on Social Security for their retirement income.”