Yesterday, the Senate rejected an urgently needed jobs bill that would reauthorize several expired necessary stimulus programs, including the extension of unemployment benefits. The bill failed 45-52, with 12 Democrats voting against it.

Senator Ben Nelson, one of the dozen Democrats, reasoned that, “I’ve said all along that we have to be able to pay for what we’re spending…$77 billion or more of this is not paid for and that translates into deficit spending and adding to the debt, and the American people are right: We’ve got to stop doing that.”

Senator Nelson is wrong. The country is not facing a debt crisis, but a jobs crisis. Ordinary people on Main Street are still suffering from the consequences of Wall Street’s reckless mismanagement of capital that led to our current economic crisis. Extending programs like Unemployment Insurance and providing more aid to local and state governments are necessary acts to stimulate our economy. Yet the 12 moderate Democratic Senators are unwilling to address our 9.7% unemployment rate and our weak job growth in the past few months because they are concerned about having too much debt.

If these Senators are serious about stimulating the economy in a budget neutral way, they should pass a Financial Speculation Tax (FST). An IPS report released today, Taxing the Wall Street Casino, illustrates that an FST is the best way of creating the necessary revenue, while also discouraging the irresponsible financial speculation that is common on Wall Street today.

According to the Center for Economic and Policy Research, an FST, a small levy on all financial transactions (0.25% or less) would create about $177 billion in revenue per year. Not only would this tax stabilize our financial markets, but it would also provide more than enough revenue to support a robust jobs program and deal with other urgent needs.

Compared to other proposals on the table, an FST is the plan that would generate the most revenue:

The Senate should be looking for ways to jumpstart our economy in a fiscally responsible manner. However, they shouldn’t be doing it at the expense of those who suffered the most from the crisis. A financial speculation tax is the solution to getting those who caused the crisis to pay for the damage that they have created.