December 1, 2008

Conduct of President's Wife Is Reviewed by U. of Tennessee's Board

Leaders of the University of Tennessee are grappling with an unusually public spat involving a presidential spouse. Word of a reported argument between a donor and Carol Peterson, wife of the system’s president, has led the Board of Trustees to request that the president, John D. Peterson, clarify her role, according to documents obtained by The Knoxville News-Sentinel.

Laura Morris, the donor, quit as chairwoman of the Alliance of Women Philanthropists after an October confrontation with Ms. Peterson, which was described by two fund-raising officials. The trustees and Mr. Peterson subsequently agreed that his wife would avoid contact with donors and university staff members.

But Ms. Peterson may again act freely after her husband sent a letter last week to the governing board’s chairman. The president said he and his wife had apologized for the incident. She would continue to participate in university activities as a volunteer, he wrote, adding that she would have no authority over staff members or volunteers on the campus.

The board is conducting a five-year review of the president’s performance and is considering the incident as part of the process. Mr. Peterson received a positive annual review this year and was praised for his communication skills and his efforts involving fund raising and alumni affairs, the Knoxville newspaper reported. —Paul Fain

State Leaders Ask Congress for Another Stimulus Package

The national associations of governors and state legislators called on Congress and the White House today to shore up their states’ sagging economies with an infusion of at least $126-billion.

The states are facing estimated budget shortfalls totaling at least $140-billion for the current and forthcoming fiscal years because of declining revenues from sales, income, and property taxes, said the National Governors Association and the National Conference of State Legislatures. At the same time, the states are likely to face increased demand for services like Medicaid, which provides health care for low-income residents.

State leaders are calling for a two-year increase in the percentage of federal matching funds for Medicaid to offset the increased numbers of people expected to be living in poverty by the end of the economic downturn.

The associations have also identified more than $57-billion worth of infrastructure repairs that could be started in short order, an effort that would provide new jobs for residents and an increase in income-tax and sales-tax dollars.

“These investments should include a broad array of infrastructure projects, including airports, bridges, highways, transit systems, ports, rails, clean water, sewers, and broadband,” said Gov. Edward G. Rendell of Pennsylvania, a Democrat, at a news conference near Capitol Hill. “We should target high-priority projects so funds can be obligated and invested so that we will see the effects quickly.”

State lawmakers are also calling for $3.5-billion increase in Pell Grant money. While only a small percentage of the proposed infusion of money would go directly to higher education, an improvement in state revenues could forestall some budget cuts that would fall on colleges and universities by the end of this fiscal year and the following year. —Eric Kelderman

November 30, 2008

U. of California Will Finance Labor Program Whose Funds Were Vetoed

The University of California will set aside money from its own budget to continue a labor-research program on its Berkeley and Los Angeles campuses that Gov. Arnold Schwarzenegger eliminated from the state budget in September, the San Francisco Chronicle reported.

Mark G. Yudof, president of the university system, agreed to use $4-million in university funds to keep the Miguel Contreras Labor Program operating through this fiscal year, which ends on June 30, the newspaper said. The university is also asking the state to finance the program next year.

The program, whose budget the governor also has proposed cutting in previous years, has produced policy research and educated students on labor and employment issues for eight years. Portions of the program’s work, including training for union leaders, have often sparked controversy among politicians in the state.

After the governor’s veto of money for the program this fall, more than 400 faculty and staff members at California colleges sent Mr. Schwarzenegger a letter of protest in which they called the elimination of the program an “unwarranted political interference in the academic activities of the University of California.”

Aides to the governor have said that the cut was not political, but that the state’s budget deficit had forced him to eliminate money for several state programs.

The $4-million the university will spend on the program is $1.4-million shy of the amount that was cut from the state budget. That $1.4-million would have been used to pay for small grants and other funds for campuses other than those in Berkeley and Los Angeles to conduct labor and employment research, the San Francisco newspaper said. —Sara Hebel

November 28, 2008

College of Santa Fe Looks to State as Deal With Laureate Collapses

The State of New Mexico might need to take over a struggling private college there after its discussions to be acquired by a for-profit provider fell through.

The College of Santa Fe was in talks with Laureate Education for it to assume the college’s debt and assist in marketing the college, in affirming its brand, and in recruiting more students.

According to an article in the Santa Fe New Mexican, a local newspaper, the college announced on Wednesday that a deal with Laureate was dead.

‘‘It is now apparent that, because of their own financial realities, Laureate Education Group will not be able to assume the debt required to retire CSF’s bonds and fund the college,” wrote Marcia Sullivan, vice president for administration and communication.

Now the college is working with New Mexico’s governor, Bill Richardson, to see if it could become a state institution. In a statement the governor, a Democrat, said the college “is an important part of the educational opportunities available to citizens of New Mexico and a valuable partner in the Santa Fe community. We need to explore every opportunity to see if there is a way for it to continue to serve the citizens of Santa Fe and of New Mexico.” —Jeffrey Selingo

November 25, 2008

2 Students at U. of Maryland-College Park Were on Terrorism Watch List

Two student activists at the University of Maryland at College Park were among 53 people put on a terrorism watch list by the Maryland State Police from 2005 to 2007, the university’s student newspaper, The Diamondback, reported this week.

According to newly released police documents cited by both The Diamondback and the Associated Press, the students were being watched because they belonged to the campus branch of the International Socialist Organization and attended a 2005 campus event opposing the death penalty that was co-sponsored by the group.

The documents reveal that the police were tracking the students — Shane Dillingham, a doctoral student in Latin American studies, and Laura J. Lising, a postdoctoral student and lecturer in physics — “in the event the group engages in criminal activity while involved in their protest activities.” Recent revelations about the watch list — including its existence, who was on it, who authorized its creation, and what use was made of it — have caused an uproar in Maryland.

Although neither of the students faced repercussions for being on the watch list, they now say they worry that the episode could have a chilling effect.

“The government is compiling information on people, not because of what we’ve done, but because of our ideas,” Mr. Dillingham told The Diamondback. “Are students going to want to go organize if they think their name is going to be added to a terrorist watch list?” —Caitlin Moran

U.S. Government Intervenes, Again, to Shore Up Student Lending

Washington — In a move aimed at increasing the availability of consumer loans, the Federal Reserve Bank announced today that it would lend up to $200-billion to financial institutions that hold securities backed by student loans, auto loans, and credit-card debt.

The Treasury Department will back the loans with $20-billion from a $700-billion financial-rescue fund approved by Congress. The goal, according to a statement from the Treasury Department, is to “enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower-cost consumer finance.”

Details of the plan came less than a week after the treasury secretary, Henry M. Paulson Jr., said the $700-billion program, which was originally aimed at mortage-backed securities, would be expanded to include other types of credit markets.

That news was welcomed by student-loan companies, more than 60 of which have stopped offering private student loans in recent months, but it was opposed by public colleges and student advocacy groups, which sent a letter to Mr. Paulson saying that students “need safe and reliable [financing] options, not more of the same risky private loans.” The new plan is geared toward private loans, but could help providers of federal loans as well.

In an interview today, Lauren J. Asher, associate director of the Project on Student Debt, said her group was “disappointed” by the secretary’s decision to proceed, and hoped Mr. Paulson would at least require recipients of the loans to provide basic protections to student-loan borrowers.

In an e-mail message, Kevin Bruns, executive director of America’s Student Loan Providers, called the program “good news for families who rely on student loans to pay for college.”

“By increasing liquidity, it should further guarantee that federal student loans will continue to be funded — and, therefore, continue to be readily available this academic year and beyond,” he wrote.

Congress and the Education Department have already taken steps to shore up the federal student-loan system, including by buying loan portfolios from student-loan companies. —Kelly Field

IRS Takes Aim at Nonprofit Student-Loan Companies

Washington — The Internal Revenue Service today laid out plans for projects it will undertake in 2009 relating to tax-exempt organizations, including a study of nonprofit student-loan companies that also have for-profit arms.

While those arrangements are not illegal, the federal tax agency is concerned that executives and other insiders at the nonprofit groups are improperly benefiting from profits of the associated businesses, said Lois G. Lerner, director of the exempt-organizations division of the IRS.

In addition to federal tax filings, the agency intends to use a broad questionnaire and audits to examine how much nonprofit-lending executives are being paid in relation to how much they are spending to carry out their nonprofit activities. —Eric Kelderman

Rep. Rangel Argued for Keeping Tax Haven That Aided Donor to Namesake School

Rep. Charles B. Rangel, chairman of the U.S. House of Representatives Ways and Means Committee, was instrumental in preserving a tax loophole that benefited the leader of an oil-drilling company about the same time the executive pledged $1-million to a school of public service at the City College of New York that will carry Mr. Rangel’s name, The New York Times reported.

Mr. Rangel, a New York Democrat who has helped raise $11-million for the Charles B. Rangel School of Public Service, has insisted that he kept his work to seek donations for the school separate from his official duties in Congress, the newspaper said.

The Times, though, said Mr. Rangel fought in 2007 to protect Nabors Industries, the oil-drilling company, and three other businesses when the Senate sought to crack down on them for opening offices in the Caribbean to reduce their federal-tax payments. The tax shelter for the four companies was preserved, saving Nabors an estimated tens of millions of dollars per year and depriving the federal treasury of $1.1-billion in revenue over a decade, according to a Congressional analysis cited by the Times.

While the tax issue was before his committee, Mr. Rangel discussed the topic with Eugene M. Isenberg, chief executive of Nabors, at the same time that the Congressman talked with the executive and a lobbyist for the company about potential support for the Rangel school, the Times said.

Mr. Rangel told the newspaper that the pledge from Mr. Isenberg to the school had played no role in his decision to protect the loophole. He said he had stood with Nabors because he thought it was wrong to impose a retroactive tax increase, even though he was offended by the company’s attempts to get around paying some of its taxes.

Mr. Isenberg, meanwhile, told the newspaper that he had pledged the money — $200,000 of which he has already paid — because he believes the school is a worthy cause. He had never sought or received special treatment from Mr. Rangel, he said. “There was no quid pro quo,” Mr. Isenberg was quoted as saying.

The House ethics committee is investigating Mr. Rangel’s soliciting of donations for the school, along with several other issues involving his personal finances and fund raising. —Sara Hebel

November 24, 2008

Obama Taps Berkeley Economist for White House Team

President-elect Barack Obama announced today that Christina D. Romer, a professor of economics at the University of California at Berkeley, would serve as chairman of his administration’s Council of Economic Advisers.

Ms. Romer (left) earned her doctorate at the Massachusetts Institute of Technology in 1985 and has taught at Berkeley since 1988. Her best-known papers explore the successes and follies of monetary policy during the 20th century. (Not long ago she wrote an Encyclopædia Britannica entry on the Great Depression.)

In a 1994 paper titled “What Ends Recessions?” (written with her husband, David Romer, a professor of political economy at Berkeley), she argued that interest-rate reductions, not tax cuts, have played the most important role in ending American recessions since 1945. That might be bad news: In the present crisis, the Federal Reserve’s interest rates are already near zero, so there is not much scope to bring them lower.

In Monday’s announcement, Mr. Obama also confirmed this weekend’s reports that Lawrence H. Summers, a former president of Harvard University, will be director of the National Economic Council. (Harvard faculty members — including some who were among the fiercest critics of Mr. Summers’s management style during his five-year tenure as Harvard’s president — praised his appointment to Mr. Obama’s economic team today, The Boston Globe reported.)

One topic that might be on Ms. Romer’s and Mr. Summers’s lips when they stand around the White House water cooler: Earlier this year, Mr. Summers’s successor at Harvard, Drew Gilpin Faust, reportedly vetoed a faculty committee’s recommendation to hire Ms. Romer away from Berkeley. The rejection was reported in May by David Warsh, a freelance economics journalist, and by The Harvard Crimson. Ms. Faust has not spoken publicly about the matter. —David Glenn

At Least 52% of Young Americans Voted This Year, New Data Show

Voter turnout among Americans under the age of 30 rose to between 52 percent and 53 percent in this fall’s election, up from 48 percent in the previous presidential election, according to updated estimates released today by the Center for Information and Research on Civic Learning and Engagement at Tufts University.

The highest participation rate on record for that age group is 55.4 percent, which was achieved in 1972, the first presidential election after the voting age was lowered from 21 to 18.

About 23 million Americans under the age of 30 voted this year, about 3.4 million more than in 2004, according to the center, whose latest data update preliminary estimates of turnout it provided the day after the election. Of those young voters, 68 percent cast their ballots for Barack Obama, helping swing some battleground states into the Democrat’s column.

Young Americans who had attended college were more likely to vote than those who had not, according to the center’s data. While 57 percent of U.S. citizens under 30 have attended college, 70 percent of voters in that age group had gone to college, the center said. —Sara Hebel