Walker was at the Sheraton Hotel in West Des Moines on Wednesday for a fundraising dinner benefiting the Heritage Foundation, a conservative think-tank located in Washington, D.C.

“Think about it. Historically, who pays for the expanse of government?” Walker asked. “The poor don’t pay for it. The wealthy, if they’re smart, have different ways of putting money other places and doing things like that. Who disproportionately pays for the expansive growth of government? It’s the middle class.”

Walker gained national attention earlier this year when he pushed a bill stripping most collective bargaining rights for public workers and requiring them to pay more for health insurance, among other things. Public safety officers — police and firefighters — were exempted from the new rules.

Tens of thousands of demonstrators came from around the country to protest the measure, which Walker thinks actually helped bring jobs to the state. He noted a business magazine that said the national focus on Wisconsin drew employers in.

“They said not only unlike other states around the country, but unlike Greece, Portugal and Spain and other places around the world, they saw a state that actually got its act together, that made long term decisions to put things in the right place,” Walker said.

The protests were ultimately not about protecting state workers, or even about state workers paying more for health care or pensions, Walker said.

“This was ultimately about big government union bosses who didn’t want us touching their money,” he said. “Not the peoples’ money, not the workers’ money. But the biggest thing they got upset about was the simple fact as part of these reforms I said no public employee in my state has to be forced to be part of a union.”

About 100 people gathered outside the hotel to express their displeasure with Walker, Iowa Gov. Terry Branstad and what they see as a nationwide attack on workers’ rights. Branstad said on Wednesday he and Walker aren’t anti-worker.

Walker made light of the demonstrators, saying “it’s not uncommon for me to have protestors from another sate. I had a lot of them earlier this Spring.”

“I also got a kick out of the fact that just to make me feel at home not only did I get to share some of the stories but you brought some of my fan club outside the hotel on the way in here tonight,” he said.

Walker said he understands a lot of people are frustrated right now and their voices should be heard. But he also noted he didn’t let the thousands of protesters in Wisconsin shift his focus.

A recall effort is now underway for Walker and some state lawmakers in Wisconsin, But Walker said he isn’t “looking at it as a drag or discouragement.”

“I look at it as a unique opportunity to go again go to the voters, the people of the state of Wisconsin and tell them the story of how our reforms are working,” he said.

Michele Bachmann

The campaign for U.S. Rep. Michele Bachmann issued a press release late Tuesday that was titled: ’9-9-9′ would wreck the U.S. economy. Quoting FreedomWorks, the Wall Street Journal and several other media outlets, the Bachmann campaign argued that Cain’s signature plan “levies a brand new national sales tax and would further weaken the U.S. economy, leaving American taxpayers vulnerable to skyrocketing rates imposed by future Congresses.”

… Mr. Cain’s plan has a worthwhile intention, but 9-9-9 would cause more problems for the U.S. economy and job-creation than it would solve. Sensible tax reform will lower the burden on American business, simply the tax code for all taxpayers, and make the U.S. the most competitive engine of economic growth in the world.

As a former federal tax litigation attorney, Congresswoman Michele Bachmann has seen firsthand the how the current code devastates American job creators. As President, she will reform the tax code to produce real jobs, right now, without creating new taxes.

On Wednesday morning the plan also drew the scrutiny of Vice President Joe Biden, who said the plan would place an added burden on the middle class.

“That’s standing on its head what Teddy Roosevelt, a Republican, had in mind when he proposed a national income tax that’d be progressive,” Biden said during an appearance on ABC’s Good Morning America. “But it’s totally consistent with the Republican philosophy that what you continue to do is continue to cut taxes for the millionaires and billionaires and continue to add a burden on the middle class.”

Herman Cain

Cain proposes replacing the current tax code with a 9 percent national sales tax, a 9 percent personal income tax rate and a 9 percent corporate income tax rate.

Bachmann, who may have offered the most damning critique of the plan, is far from the only member of the 2012 crowd that takes issue with it. The proposal received widespread criticism from the GOP field Tuesday night during an economic-focused debate in New Hampshire.

Former China ambassador and Utah Gov. Jon Huntsman noted the “catchy phrase” reminded him of the “price of a pizza” when he first heard it. When former U.S. Sen. Rick Santorum asked for a show of hands in support of the idea, and none appeared.

“There you go, Herman. That’s how many votes you’ll get in New Hampshire,” Santorum said.

Cain has defended his plan, saying that it will lead to lower taxes for all.

Tom Harkin

“The urgency of President Obama’s job speech tonight cannot be overstated,” Harkin said Thursday morning during a conference call with reporters. “Last week the Labor Department reported that zero net jobs were created for the month of August. The United States remains mired in the most protracted period of joblessness since the Great Depression.

“Count me among those who believe the President needs to be bold tonight, very bold.”

For starters, said Harkin, Obama needs to speak out against “the mindless march to austerity” while continuing to find compromise on necessary spending cuts and tax increases to address the long-term national deficit.

“But in the short-term we need a robust federal agenda to boost the economy and create jobs,” he said.

A similar message was delivered Wednesday night during a lecture at the University of Iowa by Reich, who called for additional government stimulus and state loans to boost the fragile national economy. A proposal that only addresses continued unemployment needs and ongoing tax cuts, he said, would not be enough to get the country back on its feet.

Robert Reich

“The debt — the national deficit — although real, is manageable,” he said. “What needs to be addressed right now is jobs and [economic] growth.”

Both men also advocate directed government stimulus toward a hurting middle class, which both agree have been the worst hit by the ongoing economic downturn. They also agree that not enough attention is being paid to issues surrounding America’s middle class — a subject that Harkin, most recently joined during the August recess by U.S. Rep. Bruce Braley, has discussed at length in HELP Committee hearings as well as Iowa-based town hall meetings and roundtable discussions.

“I can report that there is a serious disconnect between Washington, D.C. and Iowa,” Harkin said. “In Washington, politicians have persuaded themselves that the number one issues is the budget deficit. Iowans are focused on a more urgent deficit, the jobs deficit.

“But I’m also concerned about a third deficit — the deficit of vision and courage in Washington. We have failed to confront the jobs crisis with the boldness that earlier Americans summoned in times of national challenge.”

Regardless of Obama’s proposals during his jobs speech Thursday night, Harkin said there will be a certain element within the Republican Party that will oppose it.

“Their mantra is, ‘Government can’t create jobs.’ Well, that’s just nonsense,” he said, added that it was government visionaries who funded and built the nation’s interstate highways, created the Internet, advanced the bio-sciences and explored space.

“These government initiatives spawned countless inventions and new industries, creating 10 of millions good, middle-class jobs,” Harkin said.

It’s been hinted that Obama will proposed $300 billion stimulus package that would include both tax cuts and spending. That won’t be enough, Harkin argued, especially if it is too spread out to make a real difference.

“If [that amount] is really focused on infrastructure — school modernization, for example, [or] roads, bridges, sewer and water systems that will help our local communities — that could be a good shot in the arm,” he said. “But if it is $300 billion spread all over the place, I’m not certain it is going to do much good. If you are going to spread it out, it’s going to have to be a lot more than $300 billion.”

Since it is a given that some will be opposed to whatever Obama proposes, “even if it is $10,” then Obama needs to “do an FDR, a Harry Truman, a Dwight Eisenhower type program that is big and bold and captures the imagination of the American people,” he said.

In the 1950s and 1960s, the Republican Party had a brief flirtation with the 20th century,” Reich wrote while discussing the Sept. 7 GOP presidential debate.

… Mark Hatfield of Oregon, Jacob Javits and Nelson Rockefeller of New York, Margaret Chase Smith of Maine, and presidents Dwight Eisenhower and Richard Nixon lent their support to such leftist adventures as Medicare and a clean environment. Eisenhower pushed for the greatest public-works project in the history of the United States — the National Defense Highway Act, which linked the nation with four-lane (and occasionally six-lane) Interstate highways. The GOP also supported a large expansion of federally-supported higher education. And to many Republicans at the time, a marginal income tax rate of more than 70 percent on top incomes was not repugnant.

But the Republican Party that emerged in the 1970s began its march back to the 19th century. Ronald Reagan lent his charm and single-mindedness to the charge but the foundations had been laid long before. By the time Newt Gingrich and his regressive followers took over the House of Representatives in 1995, social conservatives, isolationists, libertarians, and corporatists had taken over the GOP once again. …

An emphasis on the type of infrastructure Harkin described above, Reich advocated in a recent video message that is embedded below, is the nation’s way forward and the path to American jobs.

“What’s so hypocritical about Republicans’ position on the payroll tax increase that they are proposing is that it is an enormous impact by hitting the middle class and working poor,” Braley said during a conference call with press. “It’s so important to remember that this hike has an immediate impact on their paycheck.”

Braley was joined by Iowa Democratic Party Chairwoman Sue Dvorsky, who said the Republicans’ support of the payroll tax increase is “hypocritical” because Republican leaders oppose tax hikes for wealthy individuals and called the increase “a bad policy.”

“[Democrats] fight for the middle class, and Republicans forget about them,” she said.

Last winter, President Barack Obama struck a deal with Congress to lower the tax American workers pay toward benefit programs like Social Security from 6.2 to 4.2 percent for 12 months. Obama, however, has indicated that one year will not be sufficient, and has put it to Congress to extend his policy for an extra year. Republicans have taken the stance that the extended reduction will fail to reduce the deficit.

U.S. House Budget Chairman Paul Ryan (R-Wisc.) sent out a supporter email Tuesday, asking for donations to help him mount a new ad campaign in Iowa. The campaign is needed, he said to counter an effort already announced and underway by national Democrats.

On Monday, the Democratic National Committee sought to connect the dots between cuts to senior citizens and the middle class to the tea party, congressional Republicans and, subsequently, to the 2012 GOP candidates n their own video, “Extreme Aims,” which is, of course, a play on the Ames Straw Poll scheduled for Saturday.

The ad features head shots of congressional Republicans, including Ryan, and mentions the U.S. House budget he authored and named as the “Path to Prosperity,” which has come to be known as the “Ryan plan.”

“We have to fight back,” the Ryan email relayed to supporters. “With your support, I’m planning on launching a counter-attack to educate Iowa voters about the Path to Prosperity and how it’s the only plan currently on the table that saves Medicare.”

The Ryan budget won approval in the U.S. House, but did not pass in the U.S. Senate. It sought to completely end the Medicare program in its current form and replace it with a system in which senior citizens purchased a private health insurance plan which would be, at least in part, reimbursed by the government. Health care reforms passed by Democrats and signed by President Obama would have been entirely repealed as part of Ryan’s plan, and there would be massive overhauls to other entitlement programs, such as Medicaid.

If Ryan is successful, it won’t be the first time his campaign dollars have flowed into Iowa politics. U.S. Rep. Tom Latham, an Ames Republican who will face Democratic incumbent U.S. Rep. Leonard Boswell in 2012 as a result of redistricting, received $5,000 from Ryan’s Prosperity PAC. Democrats were quick to draw attention to the donation Monday, insinuating that it was payback for Latham’s support of the Ryan budget plan.

The missive by Ryan to Wisconsin supporters hit on the same as voters in the state decide the fate of six Republican state senators who are facing recall. The recall votes were triggered by winter battles that resulted in public sector unions being stripped of collective bargaining rights in the state. If Democrats are able to pick up half of the seats on ballot, they will reclaim control of the Wisconsin Senate — at least until two Democratic incumbents face their own recall elections on Aug. 16. Special interest groups have been hard at work — on the ground and in their pocketbooks — on both sides of the political aisle in an attempt to influence the outcome.

“Republicans must take responsibility to solve the problems of ordinary Americans,” he said. “No is not the answer. It has to be yes — not our yes, but a combined yes, a consensus yes.”

“The ball is in their court,” he continued. “We have made the message very clear that we’re willing to work with Republicans.”

And if they refuse?

“The American people can see that like a very, very slow curveball — and they will feel like that’s what they’ve been dealt if Republicans are unwilling to work with us,” he said.

The first practical issue area in which you’ll most likely see this playing out is the tax code, where decisions need to be made before the expiration of the Bush tax cuts at the end of the year. On the call, Reid insisted that the most important thing Democrats are focused on is avoiding a tax hike on the middle class. He also called Senate Minority Leader Mitch McConnell’s (R-Ky.) proposal to extend the tax cuts for all income brackets indefinitely and take on an additional $4 billion in debt a nonstarter.

So what’s the next move? Everyone’s playing his hand close to the chest at present, but the ball, apparently, is back in the GOP’s court.

I’ll post the full video when available — the above is a clip via ThinkProgress — but here’s a rundown of some of the interesting tax, economy and financial topics covered.

Hedge fund managers: not “put upon”

A hedge fund manager, CNBC contributor and former classmate of Obama’s, Anthony Scaramucci, stood up during the town hall and told the president the “Wall Street community” feels like “a piñata.” (Video above.) He asked him how he planned to repair that damage.

Obama answered politely, saying that the ties between Wall Street and Main Street are close. He noted that he wants and America needs a “vibrant and vital” financial sector. But, he said, “I have been amused over the last couple years, this sense of somehow me beating up on Wall Street. I think most folks on Main Street feel like they got beat up on.”

He continued, “There’s a big chunk of the country that thinks that I have been too soft on Wall Street. That’s probably the majority, not the minority.” He cited the billion-dollar payouts to executives in the hedge fund industry, then said, “I think that you shouldn’t be feeling put upon.”

On saving Wall Street

Obama argued that his administration’s efforts to stabilize the financial sector worked, and said he is staunchly pro-business, when queried by a Home Depot executive. “It’s very hard to find evidence of anything we’ve done that’s designed to squash business as opposed to promote business,” he argued. “What I’ve tried to do is just try to be practical.”

He also said: “As a consequence of reckless decisions that had been made, the economy was on the verge of collapse. Those same businesses now are profitable; the financial markets are stabilized. The only thing that we’ve said is that we’ve got to make sure that we’re not doing some of the same things that we were doing in the past that got into this mess in the first place.”

On the jobs hangover

A few callers spoke of their personal plight in the wake of the recession. One law school grad said he cannot pay his loans, let alone get a mortgage or afford a family. He asked “Is the American dream dead?” Another woman described how her family might be reduced to “hot dog[s] and beans,” the sort of belt-tightened times she thought were behind her. She asked, “Is this my new reality?

Obama replied, “Absolutely not.” He said: “We are still the country that billions of people in the world aspire to.” But he called the frustration of average Americans “understandable,” given the state of the economy. “The hole was so deep that a lot of people out there are still hurting, and probably some folks here in the audience are still having a tough time.” He cited victories in aiding the middle class and said it would take time before the economy would recover.

On higher taxes for millionaires

Obama defended his proposal to keep tax cuts for 98 percent of Americans, but to allow income taxes to rise for the remaining two percent. “On average, millionaires would get a check of $100,000. And, by the way, I would be helped by this, so I just want to be clear. I’m speaking against my own financial interests. This is an irresponsible thing for us to do. Those folks are the least likely to spend it.”

On Tea Parties

Showing plenty of political aplomb, asked about the Tea Parties, Obama said Americans have a “noble tradition of being helpfully skeptical about government.” But he noted that Tea Partiers who want to slash both taxes and spending should name where they would cut the budget. “I think it’s important for you to say, ‘I’m willing to cut veterans’ benefits’” or Medicare or Social Security, he said.

First, they put the blame for growing American income inequality on George W. Bush’s shoulders, arguing, “Middle?class incomes stagnated under President Bush. During the recovery of the 1990s under President Clinton, middle?class incomes grew at a healthy pace. However, during the jobless recovery of the 2000s under President Bush, that trend reversed course. Middle?class incomes continued to fall well into the recovery, and never regained their 2001 high.”

Then, they note that income inequality might have precipitated the recession. “Stagnant incomes for all but the wealthiest Americans meant an increased demand for credit, fueling the growth of an unsustainable credit bubble,” the JEC writes. “Bank deregulation allowed financial institutions to create new exotic products in which the ever?richer rich could invest. The result was a bubble?based economy that came crashing down in late 2007.”

They note that the income gap tends to yawn before major economic crises.

Though income inequality has in fact gotten worse and worse since the 1960s.

They note that middle-class incomes climbed during Clinton and actually fell during Bush — meaning that most families became poorer, not richer, over the course of a decade.

And argue for many causes — a primary one being financial deregulation. This both helped middle-class families become indebted, and high-income earners to find investment products to take even bigger shares of the gains, the JEC writes: “The everyday consequence of stagnant middle?class paychecks is the creation of demand for credit in order to make ends meet – and to keep up with the Joneses, as the rich get richer. Former Chief Economist of the International Monetary Fund Raghuram Rajan argues that, instead of attacking the root causes of rising income inequality in the U.S., policymakers made access to credit much easier for low?income households in order to support their spending.”

The JEC argues that more-progressive taxing might help. (The huge bump in inequality during the Clinton years is due to the tech and stock bubble.) “Policymakers today have the opportunity to continue the work begun by President Clinton,” the JEC writes, specifically referring to the current Congressional battle over taxes. “[They have the opportunity to] help steer America back onto a course of economic growth where rising tides lift all boats, rather than just the wealthiest American’s yachts. Retaining the Bush tax cuts for all households, instead of letting them expire for the top two income brackets, would make the income tax system less progressive and could further exacerbate income inequality and economic fragility.”

That said, Republicans support extending the tax cuts for all Americans.

It seems likely that Democrats might push for the expiry of the cuts on households making more than $250,000 a year and individuals making more than $200,000 a year — about two percent of tax filers. But without centrists like Sen. Ben Nelson (D-Neb.) on board, a two-year extension of the tax cuts for all seems the most likely path forward. Congress needs to act before the end of the year, or else all tax cuts expire and revert to 2000 rates.

Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the — and everyone’s pointing out, are in excellent shape.

The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy.

Greenspan also argued for extending the Bush tax cuts for the highest-income families as well as the middle class, noting that the rich are the only ones spending, so best not to discourage them from doing so. That said, Greenspan said that eventually the Bush tax cuts should sunset. “I’m very much in favor of tax cuts, but not with borrowed money.” he argued. “And the problem that we’ve gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous.”

Additionally, he said he believed that very high unemployment will stick around for a long time. “I would say that there’s nothing out there that I can see which will alter the trend or the level of unemployment in this context,” he noted.