Today, marks the one year anniversary of the day that the American Recovery and Reinvestment Act (ARRA, i.e the stimulus package) was signed into law. So of course, Republicans are marking the occasion by lambasting the act and continuing to falsely claim that it has done nothing to reverse the country’s economic freefall:

– Rep. Mike Pence (R-IN): One year later, one thing is clear: the stimulus bill has failed. One year later, not one net job has been created as unemployment rose from 7.6 percent to nearly 10 percent nationwide. Mr. President, millions of Americans are asking, ‘where are the jobs?’

– Sen. Mitch McConnell (R-KY): In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10 percent, the deficit continues to soar and we’re inundated with stories of waste, fraud and abuse. This was not the plan Americans asked for or the results they were promised.

– Rep. John Boehner (R-OH): Americans are asking ‘where are the jobs’ but all they are getting from Washington Democrats is more government, more borrowing, and more debt piled on the backs of our kids and grandkids.

– Rep. Eric Cantor (R-VA): It’s been a year, and the President and Speaker Pelosi are still trumpeting a stimulus program that most Americans intrinsically know has failed to achieve the goals that were set for it.

The National Republican Senatorial Committee even put together a web video about the stimulus “boondoggle.” But as the New York Times’ David Leonhardt pointed out today, independent analyses tell a quite different story. “Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs,” Leonhardt wrote. “The Congressional Budget Office, an independent agency, considers these estimates to be conservative.”

The economy also expanded at an inflation-adjusted annual rate of 5.7 percent last quarter, much of which can be attributed to the stimulus package.

And of course, as Lee Fang has exhaustively documented, Republicans are not so down on the stimulus when it comes to money sent to their home states and districts. In fact, 110 Republican lawmakers — more than half of the GOP caucus — are “guilty of stimulus hypocrisy.” These include McConnell, who has returned to Kentucky to brag about stimulus projects, and Cantor, who has hosted job fairs populated by stimulus recipients looking to hire.

So the stimulus is doing exactly what it was projected to do, albeit in a worse economy than proponents were predicting at the time. And possibly the worst result of the GOP’s steady stream of misinformation is that it has clouded public perception (with just 6 percent of Americans believing that it has created jobs), which is imperiling new job creation efforts. As of right now, the bills before the Senate are nowhere near ambitious enough to deal with unemployment that is still too high.

Tomorrow, President Obama is expected to formally announce the creation of a commission charged with formulating a plan to address the country’s long-term budget deficits. Obama will reportedly name former Republican senator Alan Simpson and former Clinton White House official Erskine Bowles as the commission’s chairmen.

When Obama first made his intention to create a deficit commission known and said that he was “agnostic” regarding the proposals that it would consider, many Republicans went on the offensive, claiming that the commission was simply a way to push through tax increases. Instead, the GOP has been advocating for a commission that is explicitly barred from considering taxes and can only focus on cutting spending.

Fortunately, Simpson isn’t buying that argument, and in an interview with the New York Times he “dismissed claims from Republicans that reining in deficits would be easy or accomplished with spending cuts alone”:

“But they don’t cut spending,” he said, citing the administration of President George W. Bush when Republicans also controlled Congress. “Don’t forget the Republicans never vetoed a single bill in six and a half years. How is that for cutting spending?” “To say that all we have to do is take care of waste, fraud and abuse, and foreign aid is a like a sparrow’s belch in the midst of typhoon,” he said. “That is nothing, less than 1 percent of the budget.”

“There isn’t a single sitting member of Congress — not one — that doesn’t know exactly where we’re headed,” Simpson added. “And to use the politics of fear and division and hate on each other — we are at a point right now where it doesn’t make a damn whether you’re a Democrat or a Republican if you’ve forgotten you’re an American.”

Simpson is exactly right. Not only are our current deficits overwhelmingly the result of Bush administration policies and the economic downturn (which has seriously depressed tax revenue), but trying to address long-term deficits on the spending side alone can’t be done. Those who blame the deficit on earmarks (which make up less than one percent of the budget) or think that the budget can be balanced by simply freezing spending are, as CAP’s Michael Linden has put it, “peddling fiscal snake oil.”

As former Reagan economic official Bruce Bartlett wrote, “every serious budget analyst — I mean every — knows that revenues must be part of the solution to our deficit problem…[T]he idea that we can or even should embark on serious deficit reduction with no tax increase whatsoever is grossly immature and unworthy of consideration.” But the Republican leadership is still waffling about whether or not it will even agree to name members to the commission, crystallizing its insistence on staying on budget fantasy-land. It’s good to see that, at least, the Republican chairman of the commission is refusing to play the same game.

Last week, in the same interview that produced his cringe-worthy assessment of Wall Street executives as “savvy businessmen,” President Obama responded to outsized bank bonuses by pushing for “say on pay,” which would institutionalize shareholder votes on compensation packages. “I guess the main principle we want to promote is a simple principle of ‘say on pay,’ that shareholders have a chance to actually scrutinize what CEOs are getting paid,” Obama said. “And I think that serves as a restraint and helps align performance with pay.”

Today, Royal Dutch Shell provided some evidence that this approach might work. After the oil giant missed performance targets in 2008, but still saw fit to award performance-based bonuses, the company’s shareholders rejected its compensation plans in what the Wall Street Journal called a “stunning rebuke.” And Shell seems to have gotten the message, as its 2009 compensation plan has some major structural changes, including a bigger emphasis on long-term incentives:

The proposals constitute a significant step toward greater pay restraint at one of the world’s largest companies at a time when excessive awards to executives, particularly at banks, are a political hot potato. The salaries of Shell Chief Executive Peter Voser and Finance Chief Simon Henry will be 20% lower than those paid to their predecessors and will be frozen from July 2009 until January next year, according to proposals outlined in a letter from the chairman of Shell’s remuneration committee, Hans Wijers. However, the maximum shares the CEO could be awarded under the performance-related long-term incentive program would be increased from two times to three times salary.

While the overall pay level may not change, the emphasis is on a longer-term window for determining success, and bonuses can now be clawed back even after they’ve been awarded. The chairman of Shell’s remuneration committee said that the goal was “greater alignment with shareholders’ interests.”

For an example of a company that could use some reining in in terms of compensation, look at Citigroup, which literally paid so much to its employees that it “wiped out every penny of profit.” Other Wall Street banks are paying 80 or 90 cents out of every dollar they earn in employee compensation. “It’s not a fair shake,” said John Hill, chairman of the trustees at Putnam Funds, a mutual fund company. “I think the shareholders who paid for building that franchise should be getting a bigger share of the franchise’s profits.”

Some Wall Street banks, including JP Morgan Chase and Bank of America have voluntarily implemented shareholder votes on compensation. But the wider business community, led by the Chamber of Commerce, opposes mandating the measure, even though, in terms of instituting these sorts of shareholder rights, the U.S. is lagging behind other nations. For instance, Great Britain and Australia both mandate say on pay, and CEO compensation there “grew 2.4 percent and 25.3 percent, respectively, from 2002 through 2006, while pay in the United States soared 59.9 percent in the same period.”

It makes sense that more accountability to shareholders would lead to pay packages that are better aligned with the interests of the company, instead of the interest’s of management’s personal bank accounts. Say on pay won’t solve all of the problems that we are seeing in terms of executive compensation, but it is one small step that, as Shell’s experience reveals, can make a difference.

Publicly, Republicans are hinging their opposition to financial regulatory reform on their adamant refusal to create a new Consumer Financial Protection Agency (CFPA) or to implement a tax on the biggest banks, aimed at recouping money lost on the Troubled Asset Relief Program (TARP). But the Financial Times reported that, in private, Republican senators are also opposed to one of the more basic facets of the reform effort — strengthening capital standards for banks that are “too big to fail”:

Senate Republicans are resisting a fundamental tenet of the Obama administration’s financial regulatory reforms in another obstacle for the stalled legislative process. Several aides from both parties involved in reform negotiations told the Financial Times that Republicans had opposed in private a plan to impose tougher capital and liquidity requirements on companies that posed a risk to the financial system.

Capital requirements stipulate the amount of money that banks need to have on reserve against losses, and are calculated according to the riskiness of a particular bank’s assets. The administration has proposed hiking the requirements significantly for “Tier 1″ companies, which are, for all intents and purposes, the very biggest banks that are “too big to fail.”

The administration’s plan is really a no-brainer. As Elizabeth Warren’s Congressional Oversight Panel has pointed out, “one of the key lessons that has emerged from this crisis is that our financial institutions did not have adequate capital reserves to weather the turmoil in the housing market,” as current capital rules “are out of date, subject to manipulation, and do not accurately reflect the risks associated with lending activities.” Even conservative economists like Gary Becker support increasing capital requirements for the largest firms, as it would make those firms “better prepared to deal with aggregate shocks to the financial system than they were during this crisis.”

And it’s not as if the administration is proposing particularly onerous new standards. Currently, banks have to have Tier 1 capital amounting to 4 percent of their assets, which the administration wants to double to 8 percent. For some perspective, Swiss regulators are pushing their banks into double-digit capital levels.

So what do Republicans gain by opposing these proposals? Well, it could be part of their rush “to capitalize on what they call Wall Street’s ‘buyer’s remorse’ with the Democrats.” Republicans are actively courting Wall Street donors, by promising to oppose financial reform. And if the latest lobbying reports are any indication, banks are ready and willing to spend. According to data compiled by the LA Times, “lobbying expenditures jumped 12% from 2008 to $29.8 million last year among the eight banks and private equity firms that spent the most to influence legislation,” with much of the increase coming in the last three months of the year as Congress considered regulatory reform.

Yesterday, Senate Finance Committee members Max Baucus (D-MT) and Chuck Grassley (R-IA) released what they were calling a jobs bill, an $85 billion piece of legislation composed of tax incentives for businesses to hire as well as a handful of extenders to expiring tax provisions (that had nothing to do with job creation). Sens. Byron Dorgan (D-ND) and Dick Durbin (D-IL) had been working on a jobs package, but as Ezra Klein put it, “the Finance Committee wants control of the process, so it’s trying to muscle its way in front of them.”

The Baucus/Grassley bill was roundly panned by the rest of the Democratic caucus. “It looks more like a tax bill than a jobs bill to me,” said Sen. Sherrod Brown (D-OH). So Majority Leader Harry Reid (D-NV) scrapped it in favor of a $15 billion bill with four pieces: a payroll tax break, and one-year extension of highway funding, an extension of the Build America bond program, and a business tax break for equipment expensing.

Republicans, who were keen on many of the tax provisions in the Baucus/Grassley bill, immediately cried foul, complaining that Reid was undermining economic recovery with his actions. Grassley spokeswoman Jill Kozeny said that Reid “pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”

But it’s funny that the GOP suddenly feels that the legislation is must-pass to boost an economic recovery considering that earlier in the week they said that it wouldn’t create a single job:

Kyl, a member of Finance, said he most definitely “would not call it a ‘jobs bill’,” though…“No, I dont call that a jobs bill,” Kyl said emphatically…”All of that has to be done, but it does not create one job.”

And even though they readily admitted that the bill was full of stuff “that has to be done,” Republicans were placing all sorts of conditions on their support, including unanimous consent to vote on a huge cut in the estate tax that would give billions in tax breaks to the heirs of wealthy families.

So Reid was wise to pitch the Baucus/Grassley bill overboard and to say that he’d revisit the tax extenders later. Even before it came out, economic analysts and members of the administration were saying that it would “only work on the margins” in terms of boosting employment. The New York Times’ editorial board noted that “it was not even in the same league as the modest House-passed $154 billion jobs bill.” There was no reason to allow the GOP to wring out concessions in order to pass a bill that wouldn’t have done anything.

Which isn’t to say that Reid’s $15 billion effort will do all that much either. With the administration’s Council of Economic Advisers estimating that unemployment is still going to be above eight percent in 2012, a much more concerted effort is necessary, including aid to states and some sort of direct job creation.

Last week, Senate Banking Committee Chairman Chris Dodd (D-CT) said that he was going to go ahead and draft a financial regulatory reform bill without Republican support, after talks between him and ranking member Sen. Richard Shelby (R-AL) reached an “impasse.” “We were stuck,” Dodd said. “I just feel like we weren’t getting anywhere.”

But Sen. Bob Corker (R-TN) has now stepped forward as the new Republican face of regulatory reform, telling Shelby and Minority Leader Mitch McConnell (R-KY) that he is going to work with Dodd to craft some sort of bipartisan agreement. “I feel like it’s an issue we need to deal with,” Corker said. “A bipartisan solution is going to be far better for the American people.”

One of the main hurdles that Dodd and Shelby couldn’t get over was whether or not to create an independent Consumer Financial Protection Agency (CFPA) that would be on equal footing with the bank regulators. The CFPA is an administration priority, but Shelby — along with the rest of the Republican caucus — has been blasting the agency as “folly and dangerous.”

When it looked like he would have to go it alone, Dodd seemed prepared to include the agency in his bill. However, Corker seems to have other ideas:

I know Sen. Dodd knows and everybody else knows that a free-standing agency is a non-starter on our side of the aisle. But I think there is a way to have a program to deal with it in another fashion that doesn’t bump up against or undermine the safety and soundness function of a bank or a regulator looking at a bank.

So if the main sticking point in the effort has already been called a “non-starter” by the GOP’s new point man, what’s the hope here? Corker is taking the same line on the agency that other Republicans have, claiming that breaking consumer protection away from regulating banks for “safety and soundness” is a problem. Rep. Barney Frank (D-MA), who managed to move legislation creating an independent CFPA through the House, ably took on this line of thinking:

No one familiar with the track record of the bank regulatory agencies with respect to protecting consumers can deny the need for an independent agency if we are going to have effective consumer protection. Bank regulators have traditionally treated their responsibilities for consumer protection as a second priority. Those who cite safety and soundness as a major reason to oppose increased consumer protection have it exactly backwards. In fact, the inability to protect consumers from abuse was a major cause of the financial crisis from which we are just emerging.

In the latest ABC News/Washington Post poll, 62 percent of respondents (and a majority of each party) said that they favored stricter federal regulation of banks and financial institutions. But Dodd seems to be heading down the same road that Sen. Max Baucus (D-MT) went down with his “Gang of Six” health care negotiations: stalling a bill in the hope that a Republican will buy in sometime.

In the same Bloomberg BusinessWeek interview in which he compared Wall Street bonuses to extravagant professional baseball salaries, President Obama said that he wants his proposed fiscal commission — which would be charged with determining ways to reduce long-term deficits — to consider all options, adding that he wants to be “completely agnostic” regarding what it considers:

“The whole point of it is to make sure that all ideas are on the table,” the president said…“So what I want to do is to be completely agnostic, in terms of solutions”…“What I can’t do is to set the thing up where a whole bunch of things are off the table,” Obama said. “Some would say we can’t look at entitlements. There are going to be some that say we can’t look at taxes, and pretty soon, you just can’t solve the problem.”

This has led to predictable crows of victory from the right-wing, which is taking Obama’s statement as an admission that he is backtracking on his campaign pledge not to raise taxes for any household making less than $250,000 per year. “I’m sure you remember this pledge, and how there were no hedges, no exceptions, no ‘maybes’ in his promise on the campaign trail,” wrote the National Review’s Jim Geraghty.

As far as critiques go, this is pretty weak sauce. For one thing, the budget that the administration submitted earlier this month kept tax rates steady for the middle class, just as Obama promised. So it’s not like his legislative proposals aren’t reflecting his pledge.

What Obama is really doing is refusing to engage in the fantasy-land approach to deficits that the right-wing has been pushing. Ever since the creation of a deficit commission became a distinct possibility, conservatives have been advocating that the commission be explicitly barred from considering tax increases of any kind. Seven Republican senators who co-sponsored the Conrad-Gregg legislation to create a commission wound up voting against it because they decided at the last second that they wanted a commission that would only consider spending.

Counting on a commission to come up with ways to address the deficit is an already dubious way to cope with the problem, as it simply inserts more veto points into a dysfunctional congressional process. To rule something off the table before the process even begins makes it that much harder. As Sen. Judd Gregg (R-NH) put it, “the point here is that neither side is going to come to the table on this unless everybody is at the table. If I say no taxes on the table, why would anybody on the other side come to the table?”

And the simple point remains: long-term deficits can’t be fixed on the spending side alone. Dealing with long-term health care costs, as well as finding ways to raise revenue, have to be part of the solution. It seems to me that Obama understands and simply doesn’t want to undercut the work of the commission before it even begins.

There has been a lot of consternation recently regarding the Obama administration’s continuing commitment to allow the Bush tax cuts to expire for the wealthiest American households. House Democrats are pushing to leave “well-enough alone for now” — with Rep. Mike McMahon (D-NY) even saying that those making $250,000 per year are “barely making ends meet” — while Republicans are trying to convince the President to “back off the marginal rate tax hikes.”

But today the administration’s Council of Economic Advisers released its annual Economic Report of the President, which bolsters the case for allowing the cuts to expire. For instance, the report notes that “in recent years nearly half of all income — including both wages and salaries and nonlabor income — has gone to 10 percent of families. The top 1 percent of families now receive nearly 25 percent of income, up from less than 10 percent in the 1970s.”

And at the same time that more and more income has become concentrated at the top of the scale, tax rates on the highest earners have been falling.

In the 2010 fiscal year, the Bush tax cuts will actually give millionaires more in tax breaks than 90 percent of Americans will earn in income. So the result of all of this is “a compression in the tax burdens applied to taxpayers with different incomes — the difference between the average tax rates on high-income groups and those on middle-class households is narrower than at any other time in modern history.”

And it’s not as if the administration is proposing any sort of radical tax increase. The expiration — which is a part of current law, mind you — merely returns tax rates for the highest earners to the level at which they were in the 1990′s, which is still far below their historical level. If we want to seriously address long-term deficits, which we have to in order to keep the country in some semblance of fiscal shape, revenue increases have to be part of the equation, and it makes sense to both look to where the money is and to address historic levels of income inequality and a shifting tax burden.

Earlier this week, the New York Times detailed how student loan companies are “using sit-downs with lawmakers, town-hall-style meetings and petition drives” as part of a multi-million lobbying campaign aimed at torpedoing the Student Aid and Fiscal Responsibility Act (SAFRA), which would cut the companies’ federal subsidies. SAFRA, which is an Obama administration priority, has bogged down in the Senate due to the loan companies’ efforts, particularly that of Sallie Mae, which last year spent $8 million lobbying.

So yesterday, Education Secretary Arne Duncan fired back:

“Working Americans pay while bankers get rich,” Duncan said in a prepared statement. “Sallie Mae executives have paid themselves hundreds of millions of dollars in the last decade while teachers, nurses, and scientists — the backbone of the new economy — face crushing debt because of runaway college tuition costs.”

“I think banks have had a sweet deal. They’re a powerful lobbying force, and working-class families don’t have lobbyists working for them,” said Duncan in an interview with the Huffington Post. “And so you have strong, entrenched interests that have lobbied and continue to lobby to this day, and they’re running ads in states. And you have, on the flip side, millions of working-class families trying to do the right thing and go to school.”

It’s nice to see Duncan inject some fire into the student loan reform debate, because adopting SAFRA makes complete sense in an era of rising tuition, record student debt, and long-term national deficits. The measure would save more than $80 billion over ten years, which the administration plans to redirect toward Pell Grants and other education initiatives.

SAFRA opponents are making two arguments against reform. The first is that the measure constitutes a “government takeover” of student lending, which is pretty silly considering that federal subsidies already keep the lenders afloat and the government guarantees them against losses.

The second argument is that the move will cause student loan companies to slash jobs, putting people out of work with the labor market still incredibly weak. But as the Scranton (PA) Times-Tribune noted, this doesn’t hold water:

Sallie Mae and three other lenders already have signed contracts with the government to service loans under the direct loan reform. In order to get that contract, Sallie Mae eliminated 2,000 overseas jobs and returned them to the United States. They are servicing jobs. Under the reforms, the servicing part of the industry will grow.

So as the Washington Monthly’s Daniel Luzer put it, “at least in Sallie Mae’s case, it looks like direct lending might actually bring more jobs to America.”

Rep. George Miller (D-CA) has said “it’s inconceivable to me that the Congress would continue unwarranted subsidies to these lenders,” but many senators are still hesitant to back the effort. Given the lengths that the student loan companies are putting into retaining the status quo, the administration needs to continue lending weight to the cause.

In an interview with Bloomberg BusinessWeek, President Obama, who had been characterizing Wall Street bonuses as “obscene” and the “height of irresponsibility,” took a different tone, lauding Goldman Sachs CEO Lloyd Blankfein and JP Morgan Chase CEO Jamie Dimon as “very savvy businessmen,” and saying that he doesn’t “begrudge” their recent success:

QUESTION: Let’s talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?

THE PRESIDENT: Well, look, first of all, I know both those guys. They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system. I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance.

“$17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don’t get to the World Series either. So I’m shocked by that as well,” Obama added. He also pushed for some specific reforms to compensation practices, including institutionalizing say-on-pay, where shareholders vote on their company’s pay packages. “I guess the main principle we want to promote is a simple principle of ‘say on pay,’ that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay,” he said.

Of course, one big difference here is that baseball players didn’t contribute to the near collapse of the financial system. And while say on pay is a good idea, and should definitely be implemented, the problem with the latest round of Wall Street bonuses is that they came after banks were able to make sky-high profits courtesy of their access to government support. As Paul Krugman put it, “these bank executives are not free agents who are earning big bucks in fair competition; they run companies that are essentially wards of the state. There’s good reason to feel outraged at the growing appearance that we’re running a system of lemon socialism, in which losses are public but gains are private.”

And compare Obama’s stance to that of former Treasury Secretary and Goldman Sachs CEO Hank Paulson, who is vilified for having been too close to Wall Street during his tenure at Treasury, but who is now criticizing “out of whack” bank pay and calling for restraint on the part of executives:

“Today, restraint is very much in order by the top people,” Paulson, 63, said yesterday…“If you have losses, you are supposed to bear responsibility”…“During benign periods, I think compensation levels on Wall Street are out of whack.”

Obama has been making a lot of right moves with regard to the banks recently — like pushing for a bank tax and proposing the “Volcker rule” to break proprietary trading away from commercial banking — but there’s no reason to act as if the banks are seeing booming profits due solely to the business acumen of their CEOs.

Senate Majority Leader Harry Reid (D-NV) had hoped to bring a jobs bill to the Senate floor this week, but the snowfall that is still hammering DC has led to the cancellation of all congressional action for the moment. In the meantime, Reid is wrangling to pick up some Republican votes for the legislation, which the GOP is hinging on the inclusion of tax provisions, a promise on Reid’s part to address the estate tax in a timely fashion, and the exclusion of some spending initiatives.

But now some on the Democratic side are questioning the basic contours of the jobs bill, which according to a draft version that’s been circulating, is composed mainly of tax breaks to incentivize hiring and extensions of social safety net provisions (like unemployment benefits). House Speaker Nancy Pelosi (D-CA) is rightly questioning the efficacy of the hiring incentives, as “no one she’s consulted believes that the plan will actually lead to the creation of new jobs.” Sen. Sherrod Brown (D-OH) is also questioning the bill’s “heavy emphasis on tax breaks“:

“Why not think about things like taxing bonuses and send money directly into small-business loans?” Brown said. “Things like that we need to be talking about, not some of the same old, same old.”

Brown’s criticism sounds like that of Rep. George Miller (D-CA), who last week said that the jobs proposals before congress are “not adequate to the scope of the problem.” And notably absent from the Senate bill are aid to states and new infrastructure spending. Both of these measures could help spur additional job growth.

But more importantly, the economy is still suffering from a lack of demand. According to the latest National Federation of Independent Business small business survey, “shortage of customers” is the number one problem impeding small business hiring. And until those businesses feel secure that they will have customers for their products, they aren’t going to hire, no matter the various tax breaks.

Some sort of direct job creation, or using money to help national service organizations hire and increase their services, would put funds directly into the hands of consumers, who can then spend it and increase demand. Investments in clean energy could have the same effect.

Limiting the bill to tax breaks that will sit well with Republicans may be a worthwhile effort if bipartisanship is the ultimate goal. But we need to create 350,000 jobs per month for the next two years just to recover what we have lost since the recession began. Fixing the labor market is going to take a monumental effort, so this is no time to simply tweak at the margins with tax breaks that are questionable at best in terms of boosting employment.

Last week, Senate Banking Committee chairman Chris Dodd (D-CT) announced that Democrats are going to go it alone on financial regulatory reform, as negotiations with the committee’s ranking member, Sen. Richard Shelby (R-AL), were at an “impasse.” One of the sticking points has been the Obama administration’s proposal to levy a $90 billion tax on the largest financial institutions, which Shelby said he opposes outright, adding that if the Democrats were to pursue implementing the tax, they would “risk unravelling much of the bipartisan support already reached.” Republicans as a whole, in fact, have been courting support from the banks, on the grounds that they will block significant regulatory reform.

If ditching a tax on the very biggest banks is the price of bipartisanship, than it was wise for Dodd to move on. After all, the tax is pretty tame, and is only aimed at recouping the money lost on the Troubled Asset Relief Program (TARP). I’ve argued that the tax can go further (maybe by making it permanent) and the regulatory reform bill that the House passed in December had a smart provision mandating that banks pay into a fund, which will be used to unwind failing firms without using taxpayer money.

Today on CNBC, former New Jersey governor and Goldman Sachs CEO Jon Corzine said very much the same thing, endorsing the bank tax and likening it to the deposit insurance that commercial banks pay:

Nobody watching this is going to like this, but I basically think the idea, this bank tax, is just another form of FDIC insurance. I think that the industry ought to both pay back but also prepare for the next financial crisis…There was a huge tax to get us out of Long-Term Capital [Management], Goldman Sachs had to put, I can’t even remember, $350 million at the time. This is pay-me-now or pay-me-later. I would rather set up the systems to deal with resolution of the problems over a period of time, which is what the FDIC insurance rates are about.

Watch it:

Rep. Luis Gutierrez (D-IL) put it similarly in pushing for the House’s version of the tax, saying “let’s create the fund, just like the FDIC, so when we need to resolve [a financial institution], it stands.” And FDIC Chairman Sheila Bair also agreed, saying that “Congress should establish a Financial Company Resolution Fund (FCRF) that is pre-funded by levies on larger financial firms — those with assets of at least $10 billion…We believe that a pre-funded FCRF has significant advantages over an ex post funded system.”

The levy makes sense on a few levels, as it will act to level the playing field a bit between the biggest financial firms and the rest of industry and will ensure that taxpayers do not bear the brunt of future failures. Dodd should listen to those like Corzine, who are correctly characterizing this proposal as a common sense reform that doesn’t place much of a real burden on the firms it will affect.

Late yesterday, Sen. Ben Nelson (D-NE) announced that he would not vote for cloture on the nomination of former AFL-CIO and SEIU attorney Craig Becker to the National Labor Relations Board (NLRB), effectively joining a Republican filibuster. Republicans have been using Becker’s nomination as a proxy battle over the Employee Free Choice Act (EFCA) — which would level the playing field for workers who want to form a union. And Nelson bought into that frame in his statement against Becker:

Mr. Becker’s previous statements strongly indicate that he would take an aggressive personal agenda to the NLRB, and that he would pursue a personal agenda there, rather than that of the Administration. This is of great concern, considering that the Board’s main responsibility is to resolve labor disputes with an even and impartial hand. In addition, the nominee’s statements fly in the face of Nebraska’s Right to Work laws, which have been credited in part with our excellent business climate that has attracted employers and many good jobs to Nebraska.

For one thing, as Michael Whitney pointed out, “Nelson claims that Becker would bring ‘an aggressive personal agenda to the NLRB,’ rather than that of the Obama Administration. How does that make any sense, when it’s the Obama administration that nominated him twice?”

Nelson also lists three pieces of evidence as justification for opposing Becker. All of them point to Becker’s academic work asserting that elections for union representation should look more like, well, elections, free from employer interference and without allowing workers to opt-out of representation that the majority has voted for. These are common sense positions that evidence a belief that employees should be able to form unions when they want to, not only when employers deign to allow them.

Now, maybe Nelson doesn’t like these stances, but they don’t seem to justify sustaining a GOP filibuster. As the Huffington Post’s Sam Stein pointed out, Nelson had no problem voting to invoke cloture on Bush administration nominees like UN Ambassador John Bolton and EPA Administrator Stephen Johnson.

Bush’s last nominee to the NLRB — Peter Schauber — was confirmed uncontroversially, along with a boatload of nominees for various positions. But Sen. John McCain (R-AZ) placed a hold on Obama’s NLRB nominees last year, and also called for a hearing on Becker’s nomination, which was the first on an NLRB nominee since 1994 (and even that hearing was for an NLRB chairman).

Confirming Becker (and the other NLRB nominees) is important because for two years now, the NLRB has been crippled. Only two of the board’s five seats are filled, which not only leaves many disputes deadlocked at a 1-1 vote, but also calls into question the validity of any cases on which the two members have agreed. As the New York Times reported, “a pending Supreme Court case could ultimately vacate 80 of the [Board's] decisions,” because the two members do not technically constitute a quorum.

Last week, NLRB chair Wilma Liebman released a statement saying “I am disappointed that we still do not have a fully constituted Board despite the naming of three nominees last summer…I look forward to a time in the near future when the Board is back at full capacity resolving issues vital to American workers and their employers.” By joining a filibuster, Nelson is taking a step toward ensuring that that won’t happen.

There has recently been a slew of conservative voices arguing that the Bush tax cuts for the wealthy should be extended because $250,000 in yearly income is really not that much money. For instance, Fox News’ Martha MacCallum said “people who make $250,000 — in some parts of this country, they may not consider themselves rich,” while CNN’s Karin Chetry added that “some would argue that in some parts of the country that [$250,000] is middle class.” Republican National Committee Chairman Michael Steele even said “trust me, after taxes, a million dollars is not a lot of money.”

But this line of reasoning is no longer the sole property of conservative commentators. Rep. Mike McMahon (D-NY), who is one of the House Democrats joining the charge to extend all of the Bush cuts, had this to say:

“I think it is a political liability because it’s a [bad] policy right now for the economy and could have a bad impact on jobs,” said McMahon…“A working couple making $250,000 is barely making ends meet,” he said, adding, “If you have a partnership or an S. Corporation you are definitely affected… As professionals or shop owners or restaurant owners, you get hammered.”

Now, to be fair, McMahon’s district — the New York 13 — encompasses parts of Staten Island, where there are sure to be some well-off families. It’s also New York City, so the cost-of-living is one of the highest around. But still, median income in the district is $60,137. So families in his district that are making $250,000 are still doing very well.

In fact, as Daniel Gross pointed out, “$250,000 puts you in pretty fancy company, especially after the collective pratfall the economy took in 2008″:

The Census Bureau last summer reported that real median household income was $50,303 in 2008, down 3.6 percent from 2007. It’s likely that figure fell further in 2009. So a household that’s making $250,000 today is making about five times the median…And even if you look at the wealthiest metropolitan areas — Washington ($85,236), San Francisco ($76,068), Boston ($70,334), and New York ($63,957) — a quarter of a million dollars a year dwarfs the median income.

Less than 2 percent of the country makes more than $250,000, and you literally need to begin looking at individual neighborhoods to find parts of the country where that much money is not going to cut it.

The point here is not to demonize the rich, but to note that, in a time of economic hardship and worrying long-term deficits, we have to look at raising revenue from somewhere, and letting the Bush tax cuts expire for the very wealthiest makes sense. In fact, as the Center on Budget and Policy Priorities found, allowing these cuts to expire “will avert $826 billion in added deficits and debt over the next ten years.”

And as for McMahon’s charge that small business owners will be affected, the numbers haven’t changed: less than 3 percent of Americans who collect any business income at all (whether from a small businesses or a corporation) will see their taxes affected by the expiration of the Bush tax cuts.

Last month, the unemployment rate fell to 9.7 percent (even as 20,000 more jobs were lost in January) and the wider U6 measure of underemployment fell for the first time in months to 16.5 percent. While those numbers do reveal the beginnings of a stabilization in the labor market, according to Kirsten Downey, a former economics reporter at the Washington Post, they also vastly understate the extent of the employment problem, because of who the statistics do not include.

In fact, she wrote, while policymakers are celebrating the avoidance of a second Great Depression, the standard measures of unemployment reveal very little in terms of good comparisons to the 1930′s:

Now, the federal government says we have an estimated 14.8 million unemployed, out of a work force of about 154 million. But that number is artificially lower than in the Great Depression because 33 million senior citizens are on Social Security — and not seeking jobs as they were then. An additional 7.4 million adults receive disability payments under Social Security, and some would also have been seeking work in 1933…We have a far larger standing military than in 1933 — about 1 percent of the work force, or 1.4 million men and women…In other words, 43.4 million people are paid for government employment in the military, or supported through government programs. If added to the jobless numbers, it equals about 58 million people.

Of course, I think it’s kind of silly to throw the military into this pot, because they’re government employees like any other. (Why not include employees of government agencies?) Also, it’s a vindication of the Social Security system that seniors no longer have to be out looking for work.

But the point remains that we have a significant unemployment problem that is not fully explained by the simple unemployment rate. For instance, the unemployment rate for African-Americans is a stunning 24.3 percent. Only two-thirds of adult men have a job at the moment, which is the fewest since World War II. And long-term unemployment hit another record last month, as “over 41 percent of the unemployed have been looking for a job for 27 weeks or more.”

All of which points to the necessity of Congress acting on a new jobs bill quickly. Majority Leader Harry Reid (D-NV) had hoped to bring legislation to the floor as soon as today, but the snowfall that buried DC has delayed action for now. Sen. Orrin Hatch (R-UT), meanwhile, has signaled that the Senate bill could garner some bipartisan support, telling CongressDaily “”I think my colleagues should support it…It’s basically a set of ideas that they can live with.”

But as Rep. George Miller (D-CA) said last week, all of the jobs proposals before Congress at the moment are likely to be “inadequate to the scope of the problem.” Indeed, as David Madland wrote, “to give a sense of how big this jobs hole is, we would need to create 350,000 jobs per month for the next 24 months just to recover what we have lost since the recession began, and that’s not even compensating for population increases.” That’s a big hill to climb, and as of right now, the Senate doesn’t seem willing to step up in a way that will make enough of a difference.

While people were focused on the fact that CBS allowed a pro-life advocacy ad by Focus on the Family to play during the Super Bowl, another one by a right-wing group slipped in unnoticed: a “Defeat the Debt” ad showing schoolchildren pledging allegiance “to America’s debt, and to the Chinese government that lends us money.” Watch it:

This ad has run on other national networks and is part of a campaign by the Employment Policies Institute (EPI) that has featured full-page ads in national newspapers and a billboard in Times Square. EPI is a project of right-wing, pro-business lobbyist Rick Berman, also known as “Dr. Evil.” Berman is “one of Washington’s most notorious PR operatives,” who uses his firm, Berman and Company, to fund non-profit front groups for his clients.

Over the years, Berman has gone after Mothers Against Drunk Driving, PETA, and right-wing bogeyman ACORN, and tried to convince Americans that healthier foods, raising the minimum wage, stopping smoking, getting rid of mercury in fish, and unions are bad for them. Berman refuses to reveal his clients, although in 2007, CBS’s 60 Minutes revealed that they included Coca-Cola, Tyson Chicken, Outback Steakhouse, and Wendy’s. According to the watchdog group CREW, Berman “runs at least 22 industry-funded projects, such as the Center for Union Facts, and holds 23 “positions” within these various entities.” Watch Rachel Maddow’s November 2009 report on Berman:

The New York Times reported that EPI, “a conservative research group with close ties to business,” launched its campaign last fall and planned to spend approximately $5 million.

Until recently, CBS and other networks said they had a policy against airing advocacy ads during the Super Bowl. In the past, ads by groups such as MoveOn.org, the United Church of Christ, and the pro-marriage equality group GetToKnowUsFirst.org were rejected (even though networks have selectively decided to air other advocacy ads). This year, CBS controversially decided to accept a pro-life ad from Focus on the Family, saying that it had changed its policy and was willing to accept appropriate advocacy ads.

Rep. Paul Ryan (R-WI), the ranking member of the House Budget Committee, recently released an updated version of his “Roadmap for America’s Future” — a radical budget proposal that eliminates long-term deficits by essentially privatizing Medicare and Social Security and placing arbitrary, non-specific freezes on all non-discretionary spending.

Yesterday, the Republican House leadership refused to endorse the plan (while not coming up with any substantive objections) but that hasn’t stopped other conservative from lending it their full-throated backing:

– Rep. Devin Nunes (R-CA), a co-sponsor of the legislation: We have a plan, [Democrats] have nothing.

– Former Congressional Budget Office Director and McCain adviser Douglas Holtz-Eakin: It’s commendable and very true to his conservative beliefs. I think it’s fabulous, it’s a great template for everyone that’s not just relying on smoke and mirrors.

– Rep. Tom Price (R-GA): Halting America’s slide into bankruptcy and economic stagnation will require bold solutions like Rep. Ryan’s Roadmap for America’s Future. The Roadmap uses common sense reforms to improve our health care system and bring Social Security and Medicare into the 21st Century.

While Price is willing to characterize Ryan’s proposal as common sense, the Atlantic’s Derek Thompson wrote that it’s “extremely serious — not as a budget proposal, but as a dystopian parable. It’s like reading 1984 for the next century, but with graphs.”

Ryan’s plan accurately reflects the reality that entitlements — and particularly health care spending — are the drivers of long-term budget deficits. But Ryan deals with those problems by simply dumping health care costs back onto the individual, throwing seniors into the wilds of the private insurance market, and subjecting Social Security to the roulette wheel of the stock market.

“This proposal would take Medicare from costing an expected 14.3 percent of GDP in 2080 to less than 4 percent. That’s trillions of dollars that’s not going to health care for seniors. The audacity is breathtaking,” noted the Washington Post’s Ezra Klein. Meanwhile, as I’ve pointed out before, private accounts of the sort Ryan proposes would have cost seniors tens of thousands of dollars in the 2008-2009 market plunge. And while Ryan emphasizes that the account money would only be put into investment funds approved “for soundness and safety,” as the the Cunning Realist has pointed out, failed investment banks Bear Stearns and Lehman Brothers were both “blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to.”

At the end of the day, everyone approving of this plan is signaling their support for gutting the social safety net as we know it. No wonder the GOP leadership doesn’t want to emphasize that in an election year.

Last week, after President Obama called for its passage in his State of the Union address, Pedro de la Torre noted that the the Student Aid and Fiscal Responsibility Act (SAFRA), “has stalled in the Senate because of the long and cantankerous health care debate and a multi-million dollar lobbying and PR campaign by student loan companies.” Indeed, as the New York Times reported today, lenders are “using sit-downs with lawmakers, town-hall-style meetings and petition drives to plead their case” and protect the senseless subsidies that the government currently gives them to originate loans:

The student loan industry, which would be forced out of the loan origination business if the proposal became law, is seeking to cast the administration’s plan as an ill-conceived government takeover that could put thousands of people out of work at private lending centers around the country at a time when unemployment is hovering around 10 percent…“We haven’t left any stone unturned — we’ll meet with anyone who will meet us,” [Sallie Mae CFO John] Remondi said in an interview. “We’re trying to identify at least 12 senators who would be helpful in this process.”

Sallie Mae alone spent more that $8 million lobbying last year, which was double its 2008 total. Political action committees for student lenders, meanwhile, made $2.1 million in campaign contributions. And if SAFRA ultimately fails to pass, the return on those investments could be huge, as SAFRA is expected to save taxpayers more than $80 billion over ten years.

Of course, the lenders are going all out to protect their federally guaranteed profits. But it’s really inexcusable to leave these subsidies in place with the current economic climate. Not only is student debt at an all-time high — with the average debt $23,200 per student – but given that long-term deficits need to be brought under control, it’s really senseless to continue giving student lenders subsidies to act as middlemen in the student loan process.

All of the senators who go to bat for the lenders are endorsing a measure that makes the deficit worse, but that doesn’t make the student loan process any better. One student loan company, Nelnet is “infamous for manipulating the federal government’s student loan subsidies to swindle American taxpayers out of $278 million,” but the company is still staunchly protected by SAFRA opponent Sen. Ben Nelson (D-NE), who recently has been griping about the administration’s budget not including enough spending cuts.

“We anticipated this,” Education Secretary Arne Duncan said of the lending industry’s lobbying efforts. “They’ve had this phenomenal deal that taxpayers have subsidized, and that’s a hard thing to give up.” But for the sake of the budget and students, the Senate needs to take that deal away.

One of the major problems with the Obama administration’s foreclosure prevention efforts has been that it does not include a mechanism for reducing principle (the total amount owed) for mortgages that are underwater (where the outstanding mortgage balance is greater than the worth of the house). Part of this is due to the demise of mortgage cram-downs, which the banking industry has managed to defeat time and time again in the last few years.

But according to senior Treasury Department adviser Seth Wheeler, the administration hasn’t been pushing for principle reductions because it’s been hoping that mortgage servicers would implement them voluntarily:

“When the administration came into office last year, from the get-go, it has certainly been aware of the link between negative equity and challenges in housing,” said Wheeler. “As the administration initially designed the modification program last year, it was aware of negative equity, was aware that some servicers were doing principal reductions”…So for the past year, the administration had a policy of “rather than us endorsing a uniform approach to principal reductions, let’s give flexibility to servicers and hope that they do it on their own in the right circumstances,” Wheeler said.

One big problem with the mortgage modification portion of the administration plan (which does not address underwater mortgages) is that it relied too much on voluntary servicer action. It’s unfortunate to see the administration acknowledging that it had the same expectation when it came to principle reduction.

Currently, about one in four homeowners is underwater, which amounts to 10.7 million households. By June, a staggering 5.1 million borrowers are projected have home value’s that are below 75 percent of their outstanding mortgage balances, which new research suggests is the point when “the owner starts to think hard about walking away, even if he or she has the money to keep paying.”

“Negative equity is the single most important driver of defaults,” said Laurie S. Goodman, senior managing director at Amherst Securities. “If the other measures in [the Home Affordable Modification Program] aren’t working, the government will have to look at principal reductions,” added Brian Bethune, chief financial economist at IHS Global Insight.

While the administration is reportedly examining ways in which to incentivize principal reductions, the assistant Treasury secretary for financial stability, Herbert Allison Jr., said in a recent briefing that “we haven’t yet found a way of dealing with this that would, we think, be practical on a large scale.” But as I pointed out last month, not only is finding a way to reduce principal good economically, but it is good politically, as it will show that the administration is willing to go toe-to-toe with the banks in order to keep homeowners in their homes. So it would behoove Treasury to find a way to make this work.

Today, the House will be voting on a debt limit increase, and as CAP’s Michael Linden wrote earlier, there’s sure to be plenty of demagoguery on the part of Republicans, despite the fact that much of the recent increase in publicly-held debt is attributable to their policies. In fact, only a small portion of the publicly held debt (about $600 billion) is attributable to President Obama.

When the Senate voted last month to increase the debt limit, Republicans voted no as a bloc, which was essentially a vote for the U.S. to default on its debt. Before the vote, the GOP portrayed its collective action as a stand against spending. “It’s like the drunken sailor asking to have the bar open all night,” said Sen. Judd Gregg (R-NH).

But Rep. Mike Simpson (R-ID) told it straight to Congress Daily, and explained the real reason for blanket GOP opposition:

On the other side of the aisle, Republicans contend it’s not their responsibility to take this unpopular debt vote and not to expect their help. Rep. Mike Simpson, R-Idaho, a member of the Budget Committee, said, “That is the burden of the majority.“

The Senate’s vote was the first time in more than a decade that no Republican supported an increase in the debt limit. Under President Bush, the debt was increased at least seven times, and the “publicly held debt went from $3.3 trillion at the start of fiscal year 2002 (his first full fiscal year in office) to $6.3 trillion on the day he left office.” That constitutes the largest increase under any President in history, and accounts for nearly 40 percent of the total publicly held debt.

As Open Congress pointed out, “worth noting, of course, is the sudden drop off in Republican support for raising the debt ceiling as soon as Obama took office”:

A little number crunching shows that under Bush the Republicans provided, on average, 39 of the 50 votes that were generally needed to raise the debt ceiling. But under Obama, the Republicans have provided only 1 vote on average each of the three times the Senate has voted on it.

Yes, Democrats did the very same thing when the GOP was in power, lending little support to debt limit increases. But it’s the height of hypocrisy to now lampoon debt increases as the product of Obama’s profligate spending after the last eight years. Voting against an increase is a crass political vote, since debt increases are easy to criticize, while defaulting on the debt is simply not an option. At least Simpson is willing to acknowledge that.