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.