Our guest blogger is Michael Linden, Associate Director of Tax and Budget Policy at the Center for American Progress Action Fund.

Yesterday, Grover Norquist, president of Americans for Tax Reform and an anti-tax zealot, bragged that Republican leadership in both the House and the Senate have pledged to him that they will oppose any deficit reduction proposal that includes increased taxes:

“I’ve talked to the Senate leadership and House leadership. They’re not voting on tax increases and they know that,” Norquist told The Hill Friday.

Norquist said he has received the same promise from Sens. Tom Coburn (Okla.), Mike Crapo (Idaho) and Saxby Chambliss (Ga.), who are negotiating a deficit reduction package with Democrats.

Let’s put aside, for the moment, that a promise of this nature marks Senate Minority Leader Mitch McConnell (R-KY) and Speaker of the House John Boehner (R-OH) as deficit peacocks of the highest order. Given Norquist’s apparent veto-power over Congressional Republicans, what kind of deficit reduction package will they be allowed to support?

It’ll be ugly, that’s for sure. We can safely assume that Mr. Norquist will give the thumbs down to any proposal that would allow currently “temporary” tax cuts to expire. Of course, that includes the entire panoply of Bush tax cuts, but it also includes dozens of other tax cuts that are routinely extended at the end of every year. Keep all these tax cuts in place, and the deficit in 2015 will be about $1.1 trillion — that’s almost $600 billion higher than the Congressional Budget Office’s baseline, and nearly $300 billion higher than the president’s budget proposal. To get that deficit down to under $500 billion, without any tax increases, would mean a 15 percent across the board spending cut.

To put that number in perspective, the current proposal from the House Republicans to cut $61 billion from discretionary spending — which would mean hundreds of thousands of job losses, slower economic growth over the long term, massively rolling back services for children, undermining the safety and health of all Americans and seriously fraying the social safety net — amounts to 6 percent of discretionary spending.

For Republicans to keep their promise to Norquist, they’ll need cuts more than twice as big, and not limited to just discretionary spending.

But Norquist isn’t the only one taking promises from Republicans. GOP budget chief Paul Ryan (R-WI) has also promised “no changes” for current retirees or for those near retirement. That means a true across the board spending cut is pretty much out of the question, since you can’t cut Social Security, Medicare and Medicaid by 15 percent without making a few rather substantial changes.

To keep both of their promises, then, the GOP will need to cut the rest of the budget by more than 30 percent just to get the deficit down to under $500 billion. If the Pentagon gets exempted from massive cuts, then everything else will have to be cut by 50 percent. Read more

Our guest blogger is Heather Boushey, Senior Economist at the Center for American Progress Action Fund.

Unemployment insurance provides benefits to workers who are unemployed through no fault of their own and are actively seeking re-employment. In the wake of the Great Recession, the unemployment insurance system has been effective in helping families hardest hit by unemployment. In 2009 alone, unemployment benefits lifted 3.3 million families out of poverty.

Even though the unemployment rate remains at a near record high, CNN Money is reporting that a number of states are looking to cut back on benefits:

The jobless may soon find their state unemployment check is not in the mail. A growing number of states are looking to cut back on jobless benefits to minimize the increase in unemployment taxes businesses pay. State officials are concerned that these tax hikes could deter companies from hiring.

Some states, such as Florida and Arkansas, are debating reducing the number of weeks that the jobless can collect state unemployment. Others, including Indiana, want to limit the number of people eligible for benefits.

We knew this day it was coming. The unemployment insurance system is just that, an insurance system and, quite simply, not enough in “premiums” were paid in advance during the years the economy was growing in the 2000s to cover benefits if unemployment rose. During the Great Recession, states did not have enough money saved up to pay out benefits to the millions of unemployed and, as a result, they’ve been borrowing to the tune of tens of billions of dollars from the federal government.

As of March 21, 2011, 32 states and the Virgin Islands had insolvent trust funds and owed $45.9 billion to the federal government. The U.S. Department of Labor estimates that by fiscal year 2013 the amount of outstanding loans could grow to over $68.3 billion. These loan balances are significant, ranging from around one percent to over six percent of state’s total budgets. Now, those loans are coming due.

To address the problem, the Center for American Progress has laid out a comprehensive plan that not only addresses the immediate solvency crisis in the hopes of limiting unemployment benefit cuts in the near term, but also shores up the system for the next recession. Read more

A Superior Court judge found yesterday that the $820 billion in public education cuts implemented by Gov. Chris Christie (R-NJ) last year violated the New Jersey state constitution. As George Zornick explained, New Jersey law requires the state “to equalize public education funding for all students, meaning that poor, urban districts must receive the same relative amount of funding as wealthy suburban districts.” Christie, predictably, has derided the judge’s finding as “crazy,” and said that he has no idea how he will balance the New Jersey budget if he is not allowed to gut public education.

But there is one simple solution that Christie is still standing firm against: a millionaire’s tax. Christie cut $820 billion from the education budget last year, but restored $250 million this year, leaving him $570 million shy of fully reversing the cut. Conveniently, a income tax increase for millionaires that was recently introduced in the state legislature would raise more than $600 million:

The measures would increase the rate of the New Jersey gross income tax for taxpayers with taxable incomes exceeding $1,000,000 in taxable years beginning on or after January 1, 2011. The bill provides for adjusted income taxation at the following bracket at the following rate: over $1,000,000 is adjusted from 8.97% to 10.75%…According to the non-partisan Office of Legislative Services the tax hike would generate between $600 million and $637 million in annual revenues.

Last year, the New Jersey legislature passed a millionaire’s tax that Christie vetoed, but state Democrats say they may insert the measure into their budget this year. “Unquestionably it should [be in the budget],” said state Rep. John McKeon (D). “We all believe that those who earn a million dollars or more should be a part of the solution.”

Christie, however, has reiterated his opposition to the tax, with state Treasurer Andrew Sidamon-Eristoff saying that Christie will veto the measure again if it comes to his desk. Overall, the judge’s report found that New Jersey’s budget has been shortchanging poorer school districts by about $1.6 billion, meaning that students from poorer parts of the state were not having their funding requirements met even before Christie took out his meat cleaver.

In response to the the “robo-signing” scandal and other mortgage abuses perpetrated by the nation’s biggest banks, a group of state attorneys general have floated a settlement that would involve the banks writing down $20 billion in underwater mortgages, in exchange for avoiding litigation. (Underwater homeowners owe more on their mortgage than their house is currently worth.) The effort is being led by Iowa Attorney General Tom Miller (D).

The banks, of course, have cried bloody murder over the proposed settlement, calling it a “naked shakedown” by regulators. Congressional Republicans parroted the banks’ language, and one Republican attorney general, Ken Cuccinelli (VA), broke with his colleagues and likened the idea of reducing mortgage principle for underwater homeowners to “welfare.”

Now, six more Republican attorneys general have sided with the banks and against homeowners. First, attorneys general Greg Abbott (R-TX), Pam Bondi (R-FL), and Alan Wilson (R-SC) co-signed a letter with Cuccinelli objecting to the mortgage modification portion of the settlement:

Yesterday’s letter, a copy of which was obtained by Bloomberg News, was signed by attorneys general Kenneth Cuccinelli of Virginia, Greg Abbott of Texas, Pam Bondi of Florida and Alan Wilson of South Carolina…The settlement offer “appears to reach well beyond the scope of our enforcement role, and, in some instances, far exceeds the scope of the misconduct which was the subject of our original investigation,” according to the letter, which was verified by Brian Gottstein, a spokesman for Cuccinelli.

A key objection is the “moral hazard” created by the proposal to reduce homebuyers’ loans because it “rewards those who simply choose not to pay their mortgage,” the attorneys general said.

The Republican attorneys general of Oklahoma, Alabama and Nebraska sent a similar letter last week. In reality, the proposed settlement lets the banks off too easy, as $20 billion in mortgage reductions won’t actually go that far, considering the extent of damage the housing market has suffered.

Many homeowners are underwater through no fault of their own: Wall Street malfeasance and a lack of prudent regulation caused a housing bubble to grow and burst, plunging home prices steeply downward. Also, as Paul Krugman noted, the settlement only calls for modifications that benefit bank and homeowners alike:

The proposed settlement only calls for loan modifications that would produce a greater “net present value” than foreclosure — that is, for offering deals that are in the interest of both homeowners and investors. The outrageous truth is that in many cases banks are blocking such mutually beneficial deals, so that they can continue to extract fees.

But even this modest proposal has earned nothing but scorn from Republicans, who are once again content with allowing Wall Street to avoid paying for its sins.