Though Gregg was a supporter of the Wall Street bailout, his statement this afternoon indicates that he’s poised to push back against the Democrats’ plans for sweeping new banking reforms.

We have stepped back from the ledge of economic collapse, but it is critical that we do not over-correct the problems that contributed to the breakdown so that we lose the entrepreneurial spirit of innovation that has helped build our country and kept the U.S. competitive.

Gregg is also the senior Republican on the Budget Committee, a spot he’ll retain.

Asked by a House Oversight investigator if Conrad, the North Dakota senator, “was aware that he was getting preferential treatment?” Feinberg answered: “Yes, he was aware.”

Referring to Dodd, the investigator asked:

“And do you know if during the course of your communications” with the senator or his wife “that you ever had an opportunity to share with them if they were getting special VIP treatment?”

“Yes, yes,” Feinberg replied.

Both Dodd’s and Conrad’s offices refute Feinberg’s statements, The AP reports, meaning that, at least for now, this remains a he-said-she-said story. Still, the accusations don’t look good on the resumes of guys who are in the business of being popular — particularly for Dodd, who’s got a tough reelection contest less than 16 months away.

That’s because of damning testimony given yesterday by Douglas Elmendorf, director of the Congressional Budget Office, which is charged with estimating the costs associated with legislative proposals. Regarding the Democrats’ health reform plans, Elmendorf told the Senate Budget Committee Thursday that their strategy would increase, rather than control, the long-term trajectory of health care costs that threatens to swallow the country’s economy.

“The curve is being raised,” he testified.

Republicans, already harshly critical of the Democrats’ proposals, pounced on the news.

Not that it’s slowed the process just yet. Indeed, the House Ways & Means Committee passed its portion of the House bill early this morning. Still, it’ll be interesting to see how Democrats will defend their proposal’s capacity to rein in health care spending in the wake of Elmendorf’s testimony.

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Breaking from previous administrations, Obama’s budget acknowledged that fighting the wars in Iraq and Afghanistan will actually cost money; it conceded that big pay cuts for doctors treating Medicare patients would never be realized; it admitted that tens-of-billions of dollars in revenues generated by the alternative minimum tax would never be collected because Congress steps in each year to prevent millions of middle class families from paying the tax. (This year, the AMT patch arrived in the stimulus bill — at a cost of $70 billion. All of it borrowed.) And, rather than projecting the figures out for only five years (like President George W. Bush made a habit of doing), Obama’s budget looked 10 years ahead, to lend a better picture of the fiscal imbalances that loom further down the road.

Leave it to Congress to bring some of those gimmicks back.

Both Senate Budget Committee Chairman Kent Conrad (D-N.D.) and House Budget Committee Chairman John Spratt (D-S.C.) this week are considering spending proposals of their own, rife with some of the very tallying dishonesties that have plagued the past. An editorial in The Washington Post today has a concise rundown.

The congressional budgets, The Post points out, look ahead only five years. They eliminate $250 billion included in Obama’s budget for more Wall Street bailouts, though the lawmakers “have no reason to believe it won’t be needed.” And Spratt acknowledges only one year of funding for the AMT patch — not the required five — while Conrad includes only three years of AMT money.  The Post offers an explanation:

There’s no mystery as to the motivation for this dishonesty. Like Mr. Obama, the Democrats in Congress want to spend more on education, energy and other popular programs. Like Mr. Obama, they don’t want to level with voters about the need to pay for such programs through increased taxes. According to the CBO, Mr. Obama’s budget plan would have the government spending more than 23 percent of gross domestic product throughout the second half of this decade while collecting less than 19 percent in revenue. Rather than fix this problem, Mr. Conrad in his budget proposal closes his eyes and wishes it away.

Last month, Conrad said Obama’s plan “is a more accurate reflection” of federal spending than past budgets, and he went after GOP critics for “things that the other side is not counting at all,” pointing specifically to the AMT patch.

Conrad also gave a curious answer when asked specifically if the AMT fix should be offset:

I believe extending the alternative minimum tax past the next couple of years should be offset. And I have taken that position consistently.  I don’t think it should be offset at this time of severe economic weakness.  I think that would be counterproductive. But beyond the next couple of years, when we are now seeing forecasts from CBO and OMB of economic recovery, at that point, I think it should be offset.

Instead he did just the opposite, funding the AMT for three years before abandoning it later.

Both the House and Senate budget panels have plans to pass their proposals out of committee today, with the full chambers expected to consider them next week.

Experts have pointed out that real change in Washington comes only in times of severe crisis. At least as it pertains to budgets, it seems that the current crisis isn’t severe enough yet.

In an interview with MSNBC today, the senior Republican on the Senate Budget Committee was asked to react to last night’s National Republican Congressional Committee speech from Louisiana Gov. Bobby Jindal (R), who said it’s OK for Republicans to want Obama to fail — in certain endeavors. Gregg’s response:

It’s an issue-oriented event. And clearly, this budget needs to be rewritten and it needs to be re- done, and we’re willing to do it in a bipartisan way. We’re willing to sit down on issues like entitlement reform and get something done that’s going to be constructive.

I really don’t want the president to fail. If the president fails, the country fails.

Now someone make this story go away.

Gregg, of course, withdrew his nomination for commerce secretary in a storm of media attention last month. The senator, the ranking Republican on the Senate Budget Committee, cited concerns that his spending philosophy was too far adrift from that of the White House.

He wasn’t kidding.

In today’s Washington Times, Gregg minces no words in going after Obama’s $3.6 trillion budget wish-list for 2010:

The president’s budget also proposes to set us on a path to nationalize the health-care system at a huge cost, and, for good measure, it throws in nationalizing the ability of people to borrow to send their kids to college. It suggests that the best way to address climate change is to create a new national sales tax on everyone’s electric bills. And, at a time when millions of Americans are struggling to find jobs, it proposes taxing small businesses, our nation’s engine of job growth, at rate that could be seen as confiscatory.

In other words, the president’s proposal is a massive and breathtaking document, and it should not be called a budget. Rather, it should be called a blueprint for the France-ification of America, a notebook for nationalization, or a memo for massive debt creation. But a budget, by any sense of the word, it is not.

The rant might be easily dismissed if Gregg’s Democratic counterpart on the Budget Committee, Chairman Kent Conrad of North Dakota, didn’t harbor a similar distaste for parts of the president’s budget. Notably, Conrad has criticized the administration’s cap-and-trade proposal, arguing that it would increase fuel costs at a time when Americans can least afford it. Earlier this week, he told The Hill that anyone who thought the White House budget would pass the Senate “is smoking something.”

At least we know where they stand.

“If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG,” Bernanke said. “AIG exploited a huge gap in the regulatory system, there was no oversight of the financial-products division, this was a hedge fund basically that was attached to a large and stable insurance company.”

Bernanke went on to say that AIG “made huge numbers of irresponsible bets, took huge losses, there was no regulatory oversight because there was a gap in the system,” according to Bloomberg. At the same time, officials “had no choice but to try and stabilize the system” by aiding the firm, Bernanke said.

AIG lost nearly $62 billion in the fourth quarter of last year, the biggest corporate loss in U.S. history.

Nice to know that AIG’s behavior, which has become a symbol of corporate incompetence, even gets under Bernanke’s skin.

Incorporate.

The Government Accountability Office released a report today indicating that 83 of the 100 largest U.S. corporations — including many that are benefiting from Washington’s many taxpayer-funded bailouts — operate subsidiaries in countries known to be tax havens. Additionally, 63 of the 100 largest publicly-traded federal contractors have similar subsidiaries in the same spots, according to the report.

And that might not be all.

According to the GAO:

[T]he SEC only requires public corporations to report significant subsidiaries, so the number of subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions for each corporation or federal contractor may be understated in this report.

Browsing the list of companies, you’ll find many of the same names we’ve heard in recent months connected to federal bailouts. For example, American International Group, which was bailed out last year to the tune of roughly $150 billion, has 18 subsidiaries in eight tax-haven countries, including Bahrain, Switzerland and Bermuda, the GAO found.

Bank of America — which received a $138 billion lifeline today, on top of $15 billion it’s already received under the Wall Street bailout (not to mention $10 billion injected into Merrill Lynch ahead of its acquisition by BoA) — operates 115 subsidiaries in 11 tax-haven countries, including Gibraltar and the Cayman Islands.

The list goes on.

So what does it mean? Well, it appears that these corporations are begging for taxpayers to bail them out for the bad investment decisions they made, while at the same time skirting their tax obligations to the United States. (I say “appears” because the GAO concedes that subsidiaries may be established in listed jurisdictions for a variety of nontax business reasons.” Still, for what other reason would Citigroup care to house operations on Aruba and the Isle of Man?).

Some lawmakers are asking the same question. Sens. Byron Dorgan (D-N.D.) and Carl Levin (D-Mich.), who requested the GAO report, plan to introduce legislation “to shut down these tax dodgers,” as Dorgan said in a statement:

This report shows that some of our country’s largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government.

The companies, in the past, have argued that the U.S. tax code is over-burdensome, forcing them to operate in tax havens to remain competitive. Levin points out that that’s not always the case:

[N]ot all large U.S. companies are major tax haven users and there is great contrast between competitors. For example, Pepsi has 70 tax haven subsidiaries, while Coca Cola has 8; Morgan Stanley has 273, while Fannie Mae has 0; and Caterpillar has 49, while Deere has 3.

The lawmakers estimate that tax shelters cost the federal Treasury $100 billion each year.