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.”