Dee Perez-Scott is out of her depth on budget matters

Dee Perez-Scott wrote,”As Republicans continue to pander to the Rich and demand more cuts (Medicare, Social Security) for the Middle Class, IF they continue to stonewall the President and push our country into a deeper Recession/Depression and refuse to Raise the Debt Ceiling, then the President should invoke the 14th Amendment and pay our Country's bills. True Americans stand behind our President.”

She uses the phrase "true Americans" but her readers will remember vividly how critical she was of those who used the term "real Americans. She doesn't get to decide who is and who is not a true or real American. Dee Perez-Scott, if she had any sense, would know that America will pay the interest on the national debt as its first priority. Everyone but she knows that. Next in line are Social Security and Medicare and Armed Services pay. Moreover, as Obama has already stated, he does not plan to resort to any sort of tricks such as invoking the 14th amendment. He understands that he has no basis for doing so as long as we have the resources to pay the interest on the national debt. Even if he did, only the House has the constitutional authority to appropriate money. If Obama tried to operate solely on the basis of more debt, that would surely seal his fate in 2012 as everyone begins to realize that every dollar of such debt has Obama written all over it.

It really takes two parties to stonewall anything. If the president and the democrats weren’t stonewalling, there would be no crisis. It makes no sense to raise the limit on a credit card when one is already deep in hock. In fact, ethical credit card companies would refuse to do so. China should let it be known that if the U.S. does not undertake austerity measures like those being imposed on Greece, it will cash in its U.S. bonds and refuse to buy any more. The who will finance the national debt?
If Dee understood the budget deficit and national debt, she would realize that even if the super rich were taxed at 100% that would not be enough to cure the problem. We have to cut expenditures and Medicare and Social Security are the only major budget items that have the capability of solving the problem. I am not in favor of drastic cuts in either of them but there will have to be some contribution from that quarter if there is to be any chance for our country to return to solvency. The proposed changes are modest: a small adjustment in the cost of living formula and an increase of the age for a full annuity to 67. I don’t like either one but, unlike Dee, I am being realistic.


In a recent article, ultra-liberal-progressive, Katrina vanden Heuvel said: "Invoking the 14th Amendment defuses the bomb Republicans have strapped to the hostage." By doing so, the President would end the debt ceiling negotiations and create another basis for his impeachment. The 14th Amendment says: “the validity of the public debt of the United States, authorized by law ... shall not be questioned.” vanden Heuvel and others of her ilk should understand that no one is questioning the “validity of the public debt” and that includes the intra-governmental debt (like all the borrowing from the Social Security trust fund) which the Obama Administration and the Congress often conveniently overlook because it runs the national debt up to $120 trillion.

Katrina continued: In Freytag v. Commissioner (1991), the Supreme Court held that the president has "the power to veto encroaching laws . . . or to disregard them when they are unconstitutional." The Supreme, the final arbiter of constitutionality, will have the final word.. "As a simple matter of constitutional logic, the president can refuse to enforce a statute he believes violates the Constitution," said Professor Barry Friedman of NYU Law School in a telephone interview with me. It is also unlikely that the action would be successfully challenged in court. Only Congress would have standing to sue, but doing so would require a joint resolution, something a Democratic-controlled Senate would almost certainly block." In other words, vanden Heuvel is suggesting that the President rather than the Supreme Court should determine the constitutionality of a statute. That would inflict such heavy damage to the concept of separation of powers that even the Democrats in the senate would hesitate to take that route. Instead the statesmen in both Houses should expedite the resolution and ask the court to give it immediate priority.

I do think the Republicans would be making a PR mistake by continuing to insist on no tax increases of any kind, direct or indirect. However, any tax increases should be limited to individuals rather than the businesses that we depend upon to create jobs. If they do so , we will stand behind the Republicans and toss Obama out of office next year.

Dee Perez-Scott: More Hyperbole and Distortions

Monday, April 11, 2011
Dee Perez-Scott uses hyperbole to criticize Rep. Ryan's Budget Proposal
Dee Perez-Scott predictably criticizes Rep. Ryan’s Budget Proposal without offering any alternative way of solving the fiscal crisis. She says Ryan’s budget:
- Stacks the Deck with a (false) scary-looking graph
- Concocts "made up" scenarios
- 5.8 Trillion Dollars in Tax Cuts for the Rich - Obliterates Medicare! (Make the Old / Sick use worthless Vouchers instead!)
- IGNORES CBO Estimates.

She uses the far left Washington Post as a fact checker which states:
“First off, Ryan stacks the deck a bit. His budget presentation shows a scary-looking graph depicting an ocean of red stretching long into the future.” The graph is titled, ‘We are in a Spending-Driven Debt Crisis’ and says it is based on ‘CBO’s Alternative Fiscal Scenario.’ But then when you look at one of the papers from the Congressional Budget Office, it turns out that the scary scenario is also based on taxes being too low". A legitimate journalist would never write such an unsupported left wing and subjective opinion in an article that is supposed to be about checking the facts. How did the editor let a vague reference to "one of the [CBO] papers" to get into print. Moreover, what is the opinion that taxes are too low doing in a fact check article. These errors and opinions destroy the credibility of the writer.

Which one of the CBO’s papers is the Post talking about with this vague reference to “one of its papers?” Failing to document this claim, indicates that the Post writer doesn't really know what he's talking about. The Post, by allowing this drivel to be published has apparently taken the position that taxes should be higher so the government can keep spending like a drunken sailor.

The Post article continued, "The CBO paper assumes, among other things, that the Bush-era tax cuts are extended forever and the alternative minimum tax (AMT) is indexed for inflation." The former is nothing new. That has always been the GOP position. The AMT, and all other aspects of the tax code including capital gains and dividends, should have been indexed from the beginning. Without indexation, the code becomes a sneaky way of raising taxes, through bracket creep, without a vote of the Congress and without any accountability to the voters. Some items in the IRS code are already indexed so why not index them all. In fact, indexation might have served as a restraint on spending had it been in place all of these years.

Ryan correctly claims that his proposal has the imprimatur of the CBO. The budget document declares: “According to the Congressional Budget Office, this budget charts a path to complete balance. By 2040, the CBO estimates that this budget will produce annual surpluses and begin paying down the national debt.”

The Post wrote, "This seriously overstates the case. Yes, CBO has produced a letter based on its model and the various data, plans and scenarios provided by Ryan’s staff." That, of course, is all that Ryan is saying. The CBO uses its model to evaluate certain assumptions or scenarios provided by the requesting agency or Congressman. One is free to question those assumptions but not the CBO’s results.

Using favorable but unrealistic assumptions is exactly what the Obama Administration did to try to make Obamacare more palatable to the public. Just as the cost estimates associated with the Obama health-care law reflected the assumptions provided by the White House, the cost estimates for Rep. Ryan's budget proposals reflect the assumptions and scenarios provided by the Peoples’ House of Representatives. And, as in the case of Obamacare, there’s a major caveat emptor: Ryan's and Obama long-term scenarios are all subject to pressures over the long term that would make them difficult to sustain. It is unlikely that all of the assumptions for Obamacare or future budgets will hold up in the long term.

The CBO said that although debt would shrink relative to the size of the economy, Medicare beneficiaries “would bear a much larger share of their health-care costs than they would under the current program,” payments to doctors would shrink dramatically, states would have to pay substantially more for Medicaid and spending for programs other than Social Security and health programs “would be reduced far below historical levels relative to GDP.” The Post writer didn’t see fit to document this claim. The Department of Defense Budget has been very large starting with WW II and several new departments like Energy, Education, and Homeland Security have been added. The Post's statement is simply not credible without supporting evidence. What were the annual ratios of other programs expenditures to GDP?

Since Medicare, Medicaid, and Social Security did not even exist at the beginning of the 20th century, it is extremely likely that the cost of these programs in the future would be far above historical levels relative to GDP. Before 1937 and even later they would probably have been close to zero. Where are the statistics to support the Post's article?

Overall, of course, Ryan's budget would reduce spending the historical level except for the WW II years. Although Ryan relies on the CBO to vouch for his plan, he appears to ignore CBO estimates that a repeal of the health-care law would lead to an increase in the deficit. The CBO estimates on the deficit arising from Obamacare have been all over the landscape. Some have shown the deficit increasing. I suspect just like the CBO's deficit predictions for Obamacare fall apart when extended far into the future when many things will have changed in the interim. And wasn’t it the CBO that provided estimates of Medicare, Medicaid and Social Security long term solvency?

A report from the conservative but highly professional Heritage Foundation indicates that the Ryan’s budget would result in a gusher of jobs. When pundits criticize analyses and estimates made by think tanks, they need to include the professional credentials of the organization's key fellows and associates and how they developed their estimates.

The Ryan budget plan relies on assumptions and scenarios that some may wish to question but they are not unlike the kinds of assumptions and scenarios at the center of the Obamacare debate. Ryan’s ideas are bold and everyone, except the willfully ignorant, understands that this is an opening gambit, a set of ideas that will be ultimately debated at length by Congress as they should be.