Mitt Romney has some big plans for Day 1. But where are the spending cuts? TBD, apparently.

Mr. Romney has promised a 5 percent cut in non-defense discretionary spending, which is to say: approximately squat. Non-defense discretionary spending runs around 15-17 percent of the budget. A 5 percent cut in that amounts to very little in terms of the big Fiscal Armageddon picture. We could cut non-defense discretionary spending to $0.00 and we’d still be running a big deficit. Not good enough.

We cannot turn around the fiscal picture (and consequently our long-term economic prospects) without cutting Social Security, Medicare and Medicaid, and defense. We do not have to cut them all in the same way or by the same amount, obviously, but to take any 20-percent slice of federal spending and declare it sacrosanct is the mark of fiscal unseriousness — and putting four such slices off limits (I’m including “other mandatory” and interest, which really is mandatory, as the fourth slice) is unseriousness times four.

Sure, that’s going to be hard to run on. But if there is such a thing as a Romney administration, there is still going to be a Congress. Maybe it will be a strongly Republican Congress. Maybe not. But it is not as though any of this gets easier after the election. I am increasingly of the opinion that if you won’t run on it you won’t do it.

Spending cuts on Day 1: Somebody put that on Mr. Romney’s Outlook calendar. 

This weekend op-ed from AEI’s Norman Ornstein and Brookings’s Thomas Mann has drawn a great deal of criticism, much of it arguing that, contra the authors’ claims, Democrats are as ideological, as extreme, and as unbending as congressional Republicans, and are at least equally to blame for the current sorry state of affairs in Washington, if not more so.

That argument has a great deal of truth to it: It was Democrats, not Republicans, who ensured that the recommendations of President Obama’s bipartisan deficit-reduction panel were D.O.A. It is Democrats in the Senate, not Republicans, who have refused to pass a budget since FY 2009’s. It was Democrats, not Republicans, who turned the confirmation process into a pageant of bare-knuckles politics (consult Robert Bork about that). It is Democrats, not Republicans, who insist that any plan to balance the budget take more than half of all federal spending off the table. Etc.

But while the authors focus on the allegedly extreme partisanship in Washington, anybody who has been watching our national descent into insolvency must conclude that the problem has been too much bipartisanship, not too little. For more than a decade now, the operating model in Congress has been that Democrats more or less support Republicans’ tax cuts (though sometimes howling about it for the benefit of their base) while in return Republicans support Democrats’ spending (also howling about it). That is the substance of the national suicide pact that Congress has signed us up for.

Divided government can sometimes have good results, as it did during the Gingrich– Clinton years, but it can also have bad ones. When the government is divided, or when the majority party holds only a very small majority in one of the houses, there are very powerful incentives to accede to the least painful of the other side’s demands. Democrats have been energetic in condemning the “Bush tax cuts” and blaming them for the high deficits currently afflicting us, but they have made no serious effort to repeal the bulk of them, because the majority of the tax cuts went to households earning less than $200,000 a year. In fact, Democrats have touted the payroll-tax  deal as a key domestic achievement, as though talking Republicans into supporting an irresponsible tax cut were one of the labors of Hercules.

The sins on the Republican side of the ledger have been too thoroughly documented to require much revisiting here, but the spending chart from 2001–09 tells the story. As Vero reminds us:

During his eight years in office, President Bush spent almost twice as much as his predecessor, President Clinton. Adjusted for inflation, in eight years, President Clinton increased the federal budget by 11 percent. In eight years, President Bush increased it by a whopping 104 percent. 

Republicans had a lot of things they wanted to get done from 2001–09, and the easiest way to keep things moving was by talking a great deal about spending without actually doing much of anything about it. Likewise, if we judge them by their actions rather than by the speeches they make, Democrats are broadly content to go along with a great deal of the Republican agenda on taxes. I’m sure that if they thought they could get away with it Democrats would raise the top rate to 90 percent, but they know they can’t, and the ones who take the time to look at the numbers know that it is the bottom two-thirds of U.S. taxpayers who are unusually lightly taxed, not the top third. But there isn’t much juice in running against the interests of the middle class, which is why Mitt Romney has embraced President Obama’s magical $200,000 mark as the AGI above which many tax cuts will not apply.

Those who complain that there’s not a dime’s worth of difference between the parties are mistaken — there are a great many dimes’ worth of difference between Paul Ryan’s vision and Barack Obama’s — but the day-to-day reality suggests that there is a bipartisan modus vivendi in Congress, and it is killing us.

It is particularly galling that Ornstein and Mann cite the passage of No Child Left Behind as a worthy example of Democrats behaving in a bipartisan fashion. NCLB is not an especially good piece of legislation; bad legislation that has bipartisan support still is bad legislation. (Those of us who are skeptical of the wonders of bipartisanship might be forgiven for applying the hairy eyeball to anything that had the backing of both George W. Bush and Teddy Kennedy. I would not trust a Bush-Kennedy accord on pizza toppings.) Sometimes good ideas have bipartisan support, and sometimes bad ones do. We’ve seen more of the latter than the former in recent years, and Republican accommodation of Democratic priorities on entitlements, domestic spending, and tax-code shenanigans would have left the country worse off, not better off. By all means, the Republicans should embrace good ideas when Democrats offer them. You know who else should support good ideas offered by Democrats? Democrats. But as Erskine Bowles and Alice Rivlin know, when it comes to the budget the best and most responsible Democrat-backed initiatives are dead on arrival in Nancy Pelosi’s caucus.

Ann Romney, after a boorish attack from Democratic operative Hilary Rosen — who sneered that she “has actually never worked a day in her life” — responded in traditional family-first terms. Which is fine, but I wish she had responded in plain economic terms.

The Romneys are unusual in that they have five children and in that they are very wealthy. But like families with fewer children and less money, Mitt and Ann Romney as parents faced essentially two kinds of scarcity in their household: scarcity of economic resources and scarcity of parental time. (It is worth remembering that the word “economy” comes from the Greek word for household.) The Romneys solved that problem with a classic application of gains from trade and comparative advantage.

Mrs. Romney is by all accounts a very bright and ambitious woman, but there is not much in her educational background (Harvard B.A. from the extension program) or subsequent biography that suggests she was going to be well suited to a career like her husband’s. But let us assume, for the sake of argument, that she could have, had she so chosen, become a senior-level executive at a medium-to-large business enterprise — not CEO of ExxonMobil, but not making minimum wage, either. The typical salary range for chief financial officers at U.S. corporations runs from $61,786 to $265,882, according to Payscale.com, depending upon the size and complexity of the business and the particular industry. Let’s assume that Mrs. Romney would have earned top dollar, $265,882. Would it have been a good idea for her to go to work?

According to one estimate from a hostile party, Mr. Romney earned about $6,400 an hour at Bain Capital. The Romneys’ personal net worth is somewhere between $190 million and $250 million, but that understates things a bit: The Romneys set up a trust for their grandchildren worth an additional $100 million or so.

Assuming a 2,000-hour work year, Mrs. Romney as a higher-end CFO would have earned about $132.94 an hour, or about 2 percent of her husband’s hourly wage. A 40-year career at $265,882 would have given Mrs. Romney lifetime earnings equal to about 3.5 percent of the family’s net worth.

The Romneys, who are notably charitable people, have given away far more money than Mrs. Romney probably would have earned in a career that would be considered by most of us wildly successful and highly paid.

Conclusion: Ann Romney is economically a hell of a lot smarter than Hilary Rosen.

The marginal value of the wages earned in a typical C-level career would have been almost nothing to the Romneys. But there is that other scarce resource: parental time.

It is difficult to put a dollar value on parental time, but it is clear that to the Romneys one hour of Mrs. Romney’s time at home with the family was worth far more than one hour in C-level wages; further, a 2,000-hour annual block of time invested in earning C-level wages would have fundamentally changed the character of the Romney household for the worse, while providing negligible economic benefit. Instead, she provided the family with a critical good that Mr. Romney, for all his riches, could not acquire without her cooperation. If we think of the household as a household, Ann Romney’s decision to stay at home makes perfect economic sense: Her decision to be a full-time mother enormously improved the quality of life for Mr. Romney, for the couple’s five sons, and — let’s not overlook this critical factor — for Mrs. Romney herself.

Mrs. Romney’s personal investment model — marry a man who turns out to be wildly successful in business and politics, escape the tedium of what is sometimes described romantically as “a career,” have five children and the pleasure of raising them — is not open to everybody, of course: The supply of future centimillionaires is limited, and they are not easy to identify. But making intelligent decisions about forming a household and about the division of labor within that household is an option open to many of us, though unhappily not to all of us, given the state of the family.

Ms. Rosen’s remarks were criticized as being snide; the real problem is that they were stupid.

The Obama administration has done something I would call odd, if odd weren’t the norm in this White House. The administration is worried about global warming. It also is worried about the American economy, particularly manufacturing, and international competition, particularly from China. The administration’s response, as you might expect, has been to enact new regulations that will increase greenhouse-gas emissions worldwide, cripple one U.S. industry and increase costs for practically all others, discourage domestic manufacturing, and subsidize manufacturing abroad, particularly in China. It takes a kind of perverted genius to do that much wrong in one move, as though the Marquis de Sade had been reincarnated as an economist advising the president.

I refer, of course, to new EPA regulations that will in effect ban the construction of new coal-fired power plants in the United States. And that is not all it will do: Power-plant operators have already said that they will be forced to shut down some 300 facilities producing a total of 42 gigawatts, or nearly 4 percent of the nation’s total generating capacity.

There are many laws that are not amendable by EPA fiat or by acts of Congress. Among them are the laws of China and the law of supply and demand. This inconvenient fact makes the administration’s move particularly bone-headed.

What happens is this: With new coal-fired plants off the table, future U.S. demand for coal is reduced. Lowered demand reduces the price. Demand for coal is still very strong in the rest of the world; India and China in particular are full of people who will want to consume more energy and energy-intensive goods as they continue to lift themselves out of poverty, and lower coal prices will encourage and enable them to do so. Energy-intensive industries, such as heavy manufacturing, also will benefit from cheaper coal, unless those businesses have the misfortune of being located in the United States, where they will be denied that benefit.

Reducing U.S. consumption of coal will not reduce world consumption of coal; it will shift consumption from the United States to other countries — including countries with electricity-generation infrastructure that is relatively old and unsophisticated compared to that of the United States. Coal will be redirected from relatively clean U.S. plants to relatively dirty Asian plants.

By way of illustration, here is a Chinese coal ship, demonstrating China’s famous environmental sensitivity by tearing a two-mile hole in the Great Barrier Reef and dumping fuel oil in it:

China, to be fair, is building a lot of greener, high-tech coal-fired plants. It’s also building a lot of old-fashioned ones. And the plants equipped with the green tech do not always use it, because it is expensive and cumbrous to do so.

If you are worried about global warming — and let’s just grant the entirety of the anthropogenic thesis for the sake of argument here — then what you have to worry about is not emissions from the United States but emissions from the globe, global warming being a notoriously global phenomenon.

Coal at its very best is environmentally problematic, to be sure. There are no pretty coal mines. But burning coal, like fracking for gas, presents environmental problems that are manageable, unless your idea of management is imposing arbitrary and counterproductive rules that achieve the opposite of everything you had hoped to achieve, in which case you might want to think about a career in politics.

The United States may be the first country in history to colonize itself, reducing the world’s most advanced and complex economy to a raw-materials supplier for sophisticated manufacturing economies abroad. Worse, we may not even be able to do that: One of the few U.S. firms that stand to benefit from increased Chinese coal consumption, SSA Marine, is having a terrible time trying to build a new West Coast coal terminal, called Gateway Pacific, to enable it to better serve our competitors abroad. Everybody from the EPA to the Whatcom County (really) municipal government is standing in the way of the project, and the main impetus behind the opposition is not local environmental concerns but ideological opposition to the world’s use of coal, period. Given the rarity of hearing something coherent from somebody affiliated with the Chamber of Commerce, it’s worth hearing at length from the chamber’s man in Whatcom:

These opponents wish to end the world’s use of coal and they intend to make a point by derailing the Gateway Pacific Terminal.

Stopping the terminal will not stop China from using coal; the world has plenty. It will only stop China from using our cleaner coal, which has less mercury, sulfur, and nitrogen oxides. Opponents say the coal China uses affects our air quality. So if they use our coal, our air will actually be cleaner.

Stopping this terminal will not even stop U.S. coal exports. The U.S. has at least 10 coal-export terminals and will export more. British Columbia has three coal-export terminals, and all are capable of expansion. If opponents succeed in stopping Gateway Pacific, the coal trains will continue to run right past us up to Canada, which will get the jobs and tax revenue.

Frankly, what we should be concentrating on is taking care of our local environment. The project is starting an exhaustive environmental review under the oversight of federal, state and local agencies. Let’s allow these agencies — and SSA Marine — to do their jobs instead of arbitrarily opposing something without all the facts.

As with opposition to fracking, most of the opposition to Gateway Pacific is really about opposition to the use of the commodity per se. It may be that the Obama administration is cowed by the malignant antihumanistic environmentalists who play an outsized role in Democratic affairs, particularly in campaign financing. It may be that the administration really believes its risible rhetoric about the so-called green-energy economy that’s always right around the corner (waiting for a federal handout). But a policy cannot be judged by the intentions of the men behind it; it must be judged by its actual results, which in this case means subsidizing dirty Chinese coal at the expense of the U.S. economy.

David Sirota writes:

In the apartment building the Times profiles, domiciles go for $7 million a year, including a 300-square-foot “en suite sky garage” that “would be valued at more than $800,000 if priced at the same rate per square foot as the rest of the apartment.” No doubt, the view from the garage is so good, the car’s owner can see the vast swaths of the city’s outer boroughs — the places where people are lucky to make $800,000 in their entire lifetimes.

This sounded fishy to me. It is: The apartments are for sale, not for rent, and the apartment in question is on sale for $7 million; it does not rent for $7 million a year.

Easy enough mistake to make (and Sirota corrected it after I pointed it out). But what about this? “No doubt, the view from the garage is so good, the car’s owner can see the vast swaths of the city’s outer boroughs — the places where people are lucky to make $800,000 in their entire lifetimes.”

The poorest borough in New York City is the Bronx, where the median household income is $34,264 a year, or $1.37 million over a 40-year working life. Given that they would have to be making a good deal less than the median Bronx income, you’d have to be unlucky to make only $800,000 in your lifetime. (About 44 percent of people living in the Bronx are either under 18 or over 65, so I’m using household income rather than per capita income.)

I lived in the South Bronx for a few years, and it is indeed poor. (My congressional district was the poorest in the United States.) But people in the Bronx would not be any wealthier if rock stars and movie stars (I’m told Mick Jagger and Nicole Kidman live in the building in question) had to park their Rolls-Royces  on the ground level. The two things are not related.

UPDATE:

Even if you take the less representative measure of per capita money income, New Yorkers outside of Manhattan would have an average 40-year income of $975,760, meaning that an income of $800,000 would make them unlucky, not lucky.

UPDATE 2: 

Sirota writes that even at $7 million once rather than $7 million per annum, the apartment is still [expletive deleted] “nauseating.” But why?

The apartment in question is selling for five times the median in Manhattan. Sirota lives in Denver. Here is an apartment selling for five times the Denver median. Two bed, two bath — nauseating? And it doesn’t even have a Ferrari elevator! If anything, Mick Jagger et al. seem to be getting a relatively good deal. New 1 percent motto: Better with money than you are.

Pennsylvania’s capital city cannot pay its bills:

(Reuters) – Pennsylvania’s distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services.

Pennsylvania’s capital of 50,000 people is mired in $326 million of debt due to the expensive retrofits and repairs of its troubled trash incinerator.

There is something poetic about a trash incinerator bringing down Harrisburg. If only they’d put more spending measures into it.

And in Rhode Island, the pension tsunami is rolling ashore:

The smallest city in the nation’s smallest state — Central Falls, Rhode Island — is bankrupt. The main reason is it can’t afford the pensions for its retired city workers. How the city is digging out of its financial hole may have consequences for city pensions in other cash-strapped towns across the country.

For years, city officials promised robust union contracts and pensions without raising revenue to pay for them. Last August, the math caught up with them. Central Falls was broke, its pension fund short $46 million. It declared bankruptcy.

I wonder how many states and municipalities will be insolvent on Election Day, 2012. Guesses?

Who has the power in Washington? Who won the payroll-tax battle? Not Republicans, not Democrats — government employees.

The new deal on the payroll-tax extension (which will do little or nothing to benefit the economy) was held up by a largely unrelated matter: requiring federal workers to contribute more toward the costs of their own pensions. (More, Congress? How does 100 percent strike you?) The original proposal would have required all federal workers to bear more of the costs of their own retirements, but Democrats representing Maryland, that tony little suburb of Leviathan, shrieked. The compromise instead will cover only new hires.

I’m still tickled that the Obama administration’s great political victory here is getting Republicans to agree to a stupid tax cut with no offsets — stupid tax cuts with no offsets being a Republican specialty — but the outcome is grim: The combination of stupid spending and stupid tax cuts is a potent one, and it may be an indicator of worse things to come. If we should revert to the Bush-Hastert-Pelosi model, in which Republicans and Democrats simply swap tax cuts and spending increases between themselves to keep the machinery moving, the consequences for our national debt will be, in a word, terrifying.

But as the ship takes on water, you can bet that federal workers will continue to loot the fisc until the last rapidly depreciating U.S. dollar has been spoken for.