The Federal Reserve last week released a set of proposals for aiding the battered American housing market, including a series of ways to help homeowners who are buried under the weight of unsustainable mortgage payments or who now find themselves significantly underwater on their home (meaning they owe more on their mortgage than their house is worth). New York Federal Reserve President William Dudley added to the list a proposal for reducing mortgage principal (the outstanding amount on the loan) for underwater homeowners.

The Senate GOP, which had obstructed all manner of help for homeowners, reacted with outrage, saying that helping homeowners in such a way would be, in the words of Sen. Bob Corker (R-TN), “completely egregious“:

Republican Senators Orrin Hatch of Utah and Bob Corker of Tennessee criticized the Federal Reserve for overstepping its role by making policy recommendations on how the U.S. government should try new ways to spur the housing market.

Hatch, the top-ranking Republican on the Senate Finance Committee, said the housing study sent by Chairman Ben S. Bernanke to Congress last week, along with recent Fed speeches, “intrudes too far into fiscal policy advice and advocacy.” Corker said New York Fed President William C. Dudley’s suggestion last week that Fannie Mae and Freddie Mac reduce the principal of the loans they guarantee was “absolutely egregious.”

Reducing principal is one of the most effective ways to keep troubled borrowers — many of whom are underwater or behind on their mortgage payments through no fault of their own — out of foreclosure, and it would also boost the economy. A report from the The New Bottom Line — a coalition of community, faith-based and labor groups — found that “if banks wrote down all underwater mortgages to market value and refinanced the homeowners into 30-year, fixed-rate loans at current market interest rates, that would pump $71 billion into the national economy.”

The Senate GOP, instead, derides the idea, after filibustering an Obama administration nominee because he may have been sympathetic towards principal reductions. But, perhaps that’s not surprising from a party that thinks foreclosure prevention efforts simply “need to stop.”

Billionaire investor Warren Buffet is telling congressional Republicans it’s time to put up or shut up on deficit reduction.

For the past year, Republicans have doggedly insisted that the nation’s deficit is a crisis that eclipses high unemployment. But they’ve only been willing to reduce the deficit through drastic spending cuts — and have denounced Buffett for saying tax increases on the rich need to be part of the solution.

Last fall, Sen. Mitch McConnell (R-KY) said that if Buffett was feeling “guilty” about paying too little in taxes, he should “send in a check to the Treasury. Now, Buffet says he’s willing to do just that to pay down the national debt — if Republicans will do their part too:

The billionaire investor, in the new issue of Time magazine, says he will donate $1 to paying down the national debt for every dollar donated by a Republican in Congress. The only exception is Senate Republican leader Mitch McConnell – for whom Buffett said he would go $3-to-$1.

The idea stems from a New York Times opinion piece Buffett wrote last August in which he said the rich ought to pay more taxes. It sparked an instant controversy, with some Washington conservatives calling on the 81-year-old “Oracle of Omaha” to voluntarily pay extra.

“It restores my faith in human nature to think that there are people who have been around Washington all this time and are not yet so cynical as to think that can’t be solved by voluntary contributions,” the Berkshire Hathaway CEO told Time…

McConnell certainly has the resources to meet Buffett’s challenge — he’s worth at least $10 million. Buffett went on to say that the U.S. needs a system that “takes very good care” of citizens who work hard but don’t happen to make millions in the financial sector.

As GOP presidential candidate Mitt Romney begins to solidify his frontrunner status, his pitch as the “business” candidate who understands the “real economy” is faltering under heavier scrutiny of his time at Bain Capital. As CEO of the private equity firm, Romney “maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits” while a significant number of those companies went bankrupt and thousands of workers lost their jobs. “Make a profit. That’s the name of the game, right?” he said.

Now even members of his own party are damning the callous nature of his work. Chafing from the criticism, Romney blasted his “desperate” opponents yesterday for joining President Obama in “put[ting] free enterprise on trial” and engaging in “the bitter politics of envy.”

This morning on the Today Show, host Matt Lauer asked Romney — twice — whether he truly believed any questions regarding the practices of Wall Street or the distribution of wealth and power is merely “envious” or more about “fairness.” Both times, Romney insisted that it was solely an “envy-oriented” attack on “millionaires and billionaires and executives and Wall Street”:

LAUER: When you said that we already have a leader who divides us with the bitter politics of envy, I’m curious about the word ‘envy.’ Did you suggest that anyone who questions the policies and practices of Wall Street and financial institutions, anyone who has questions about the distribution of wealth and power in this country, is envious? Is it about jealousy, or fairness?

ROMNEY: You know, I think it’s about envy. I think it’s about class warfare. When you have a president encouraging the idea of dividing America based on the 99 percent versus one percent — and those people who have been most successful will be in the one percent — you have opened up a whole new wave of approach in this country which is entirely inconsistent with the concept of one nation under God. The American people, I believe in the final analysis, will reject it.

LAUER: Yeah but envy? Are there no fair questions about the distribution of wealth without it being seen as ‘envy,’ though?

ROMNEY: I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made it part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it will fail.

Watch it:

The exchange is indeed shocking in what it reveals. In a time when income inequality is at its worst level since the Great Depression and Americans are increasingly concerned over the shrinking middle class, Romney is insisting that anyone who questions — let alone tries to reform — the unfair advantages of the extremely wealthy or the destructive practices of the financial industry that single-handedly shoved America into a recession is nothing more than “envious” of these people’s success.

Perhaps his answer shouldn’t be so surprising given how myopic the view is from his high perch. Romney is, after all, a millionaire who is still making money from the predatory equity firm while paying little in taxes and owes much of his political viability to Wall Street’s pocketbook. Indeed, he suggested the public office should be the province of rich people. Perhaps he’s just defending his own.

As the Washington Post’s Greg Sargent points out, “Romney was twice given a chance to nod in the direction of saying that concerns about these problems have at least some legitimacy to them, that they are about something more than mere envy or class warfare, and that they are deserving of a public debate. And this is the answer he gave.” Fellow candidate Newt Gingrich had another description for Romney’s answer: “baloney.”

As the struggling economy forces more Americans to rely on social aid programs, more and more Republicans are ratcheting up the attacks on those in need. When it comes to unemployment insurance, the party’s presidential candidates, governors, and lawmakers are searching out ways to not only gut the program but belittle vulnerable Americans in the process.

In South Carolina, where unemployment is at nearly 10 percent, state Sen. Paul Campbell (R) introduced a bill forcing unemployed workers that can’t find a job in six months to volunteer for 16 hours a week in order to continue getting benefits because “it’s easier for people to get a job if they have a job of some sort”:

If unemployed workers in South Carolina can’t find a job in six months, they would have to volunteer 16 hours weekly to continue getting benefits from the state under a bill up for debate today by a Senate panel.

Its sponsor, Sen. Paul Campbell, said it’s easier for people to get a job if they have a job of some sort, and his intent is to match people’s skills with work that needs done in city or county governments and schools, from electrical work to assisting in classrooms.

“I just think if someone’s busy working, they’ll be more industrious and more likely to get a job,” said Campbell, R-Goose Creek. “Depending on the skill they’ve got, I think we can put that skill to work. I’m not talking about collecting garbage on the side of the highway.”

Campbell, a chemical engineer, says the unemployed would still have time to search for a paying job, while honing their skills.

In reality, people who receive unemployment insurance actually work harder to find jobs than those who don’t qualify for the program. But for the last 34 months, there have been more than four unemployed job seekers for every job opening. Forcing these workers to volunteer not only takes away from much-needed time to job search but also reinforces negative stereotypes of unemployed workers’ laziness.

Like many other states, South Carolina is pairing this bill with another likely unconstitutional bill that mandates laid-off workers pass a drug test to qualify for their benefits. That bill’s sponsor state Sen. Kevin Bryant (R) argued that because “those working to keep their jobs are susceptible to a possible drug test,” those that are unemployed should be too. “Hopefully, folks would make the better decision to not use drugs, and we can get them back to work,” he said.

But as the National Employment Law Project pointed out, judging unemployed workers as lazy drug users severely mischaracterizes and marginalizes a large group of Americans: “The unemployed are just a slice of America. They’re you and I without a job…To suggest that the unemployed are lazy drug abusers who are just sitting around feeds a false, ugly stereotype.”

Virginia Gov. Bob McDonnell (R) appeared on MSNBC this morning and used the opportunity to misleadingly claim that the 1 percent “contributes most to philanthropy in this country.”

McDonnell was asked during an interview with Chuck Todd about his use of the term “class warfare.” The Virginia Governor hinted that President Obama was behind the 99 Percent Movement, before moving on to defend the 1 percent. “If you look at who contributes most to philanthropy in this country,” said McDonnell, “I guess it’s that 1 percent”:

TODD: You just used the phrase “class warfare.” Do you think Speaker Gingrich and Rick Perry are tiptoeing on the line of class warfare on these attacks on Bain?

MCDONNELL: No, but I think President Obama is. This 99 percent versus 1 is the epitome of that. If you look at who contributes most to philanthropy in this country, I guess it’s that 1 percent. I think these attacks are really unfounded and one that undermine the basic tenets of the American dream. We ought to celebrate more people being able to be successful and making it financially or politically or any other measure of success and not criticize. I think that’s not healthy for our country and people that have shown success in any walk of life ought to be uplifted as a model.

Watch it:

In fact, as a percentage of their income, poorer individuals tend to give at far higher rates than the wealthy. The 2000 Social Capital Community Benchmark Survey found that those making less than $20,000 per year gave away 4.6 percent of their income, while those making more than $100,000 gave just 3.1 percent.

In terms of overall dollars given, the top 0.5 percent in income earners (annual income over $1 million) donate approximately half of all charitable proceeds, but the percentage of their income donated significantly lags individuals of more modest means.

Portfolio has more:

But the fact that the working poor sacrifice the highest percentage of their income is also important. Charitable giving is more than just a source of money to fund nonprofit activities; it is an expression of how communities band together to meet common goals.

In a potentially game-changing shift, Republican presidential candidates, including former Utah Gov. Jon Huntsman, former House Speaker Newt Gingrich, and Texas Gov. Rick Perry, have tapped into the populist anger of the 99 percent, tearing into former Massachusetts Governor Mitt Romney’s tenure at the financial firm Bain Capital, which made billions while bankrupting a quarter of the companies it invested in.

Gingrich said Romney’s firm consisted of “rich people figuring out clever, legal ways to loot out a company;” Huntsman claimed Romney liked “firing people;” Perry said that Romney must’ve been worried that he would “run out of pink slips” to give people.

The attempt by these candidates to tap into the sentiments of Americans — many of whom are registered Republicans — who have been ripped off and mistreated by corporate executives like Romney is spawning a backlash from the Republican establishment. A number of prominent right wing individuals and groups rushed to defend Romney’s behavior at Bain Capital, saying that being critical of corporate greed is tantamount to betraying conservative values and being anti-capitalism. Here’s a roundup of just some of this conservative backlash:

– The Club for Growth: The Club for Growth called Gingrich’s critique of Bain “disgusting,” and said that “attacking Governor Romney for participating in free-market capitalism is just beyond the pale for any purported ‘Reagan conservative.’” [1/10]

– Former Pennsylvania Sen. Rick Santorum: Santorum accused those criticizing Bain of playing by the Democratic Party’s playbook: “[I] just don’t think as a conservative and someone who believes in business that we should be out there playing the games that the Democrats play, saying somehow capitalism is bad.” [1/9]

– The National Review: The National Review’s Avik Roy said the attacks on Bain were indicative of “Romney Derangement Syndrome,” and defended the practices of his company. [1/9]

Read more