Tuesday, March 23, 2010

Clout goes to high school

March 23, 2010

Chicago Tribune

"We didn't want to advertise what we were doing because we didn't want a bunch of people calling."—David Pickens, former top aide to Chicago Public Schools chief Arne Duncan

[Ed. note - Duncan is now Obama's Secretary of Education]

The quote says it all. CPS officials maintained a secret list to track requests from politicians, businessmen and other VIPs who wanted to get students admitted to one of the city's elite high schools. Most parents didn't know they could appeal to Duncan's office for a closer look, and that's the way school officials wanted it.

It's one more example of how things are done in Illinois: One set of rules for people with clout, another set for everyone else.

Getting into one of Chicago's nine selective-enrollment high schools is a fiercely competitive process, with tens of thousands of students vying for a few thousand slots. Admission is based on a point system, but principals have limited discretion to enroll students who wouldn't normally make the cut.

For years, some parents have complained that well-connected neighbors were able to access those few spots through back channels. Last summer, a handful of public officials acknowledged they had used influence to get friends and relatives admitted. A federal investigation was launched in July, and Duncan's replacement, Ron Huberman, ordered an internal investigation and an outside audit. The district's clout list, maintained over several years under Duncan, was obtained by the Tribune this week.

Those on the list include House Speaker Michael Madigan, Attorney General Lisa Madigan, former U.S. Sen. Carol Moseley Braun, former White House social secretary Desiree Rogers and half of the Chicago City Council. The initials "A.D." — Arne Duncan, Pickens says — appear dozens of times. Duncan's mother and his wife also appear as sponsors.

Pickens says Duncan told him to create the list to centralize the calls that were previously fielded by principals. Pickens and his staff screened the requests and passed some of them on to principals, who are allowed to hand pick up to 5 percent of their students based on criteria including leadership, family hardship and extracurricular activities.

Pickens, now chief of staff to the Chicago Board of Education president, and Duncan, now U.S. secretary of education, say their referrals were not meant as directives to the principals to admit certain students.

That's the same argument made by defenders of the University of Illinois' "Category I" system, the shadow admissions track for politically connected applicants. Last year, the Tribune's "Clout Goes to College" series revealed that hundreds of them got special consideration because of pressure from lobbyists, lawmakers and other power brokers.

That scandal eventually led to the resignations of the university president, chancellor and six of nine trustees. But many of the politicians who intervened on behalf of applicants defiantly denied any wrongdoing. There was no arm-twisting, they insisted; it was all "constituent service." The documents showed otherwise: Category I applicants had higher acceptance rates, despite lower ACT scores and class ranks. In other words, clout trumped merit.

It's impossible to draw (or rule out) such a conclusion from the CPS list. Entries, which list the applicant's VIP sponsor and contain check-off boxes to track the progress of the request, are often incomplete or marked "pending." Among those that were completed, roughly 43 percent were marked "yes" or "done."

So, no, having an alderman for an uncle doesn't guarantee your kid will get into Whitney Young. It doesn't matter. The students whose names appear on that list have a leg up on those who don't. CPS has no business running that sort of racket.Selective-enrollment high schools are among the biggest incentives to keep parents from sending their kids to private schools or fleeing to the suburbs. But parents aren't going to stay if the system is being gamed. Competition is already steep, and the families who have no clout — or who decline to exercise it — are at a disadvantage. They deserve a fair and honest system. They didn't get one.

One big difference between the U. of I. and CPS: When Huberman learned about the problem, he moved immediately to fix it. He has taken significant steps to create a fair and transparent selection process. Principals are required to document contacts from anyone lobbying for an applicant, and classify the contact as appropriate or not. They have to document any contact from CPS brass. Their discretionary picks will be reviewed by a panel and the CPS inspector general will have a role in that review. Huberman's goal is to restore faith and preserve some discretion in the admissions process. He has taken good steps.

We haven't heard the last, though, about the history of clout in the schools.

Copyright © 2010, Chicago Tribune

Monday, March 15, 2010

Are Some Races More Equal Than Others?

By Abigail Thernstrom and Tim Fay Friday, March 12, 2010

Filed under: The Journal of the American Enterprise Institute

How will the Obama administration respond to a formal complaint in the wake of serious black-on-Asian violence at South Philadelphia High School?

Secretary of Education Arne Duncan has just announced a new push to enforce civil rights laws to combat discrimination in our schools. In the last decade, he said, his department’s Office for Civil Rights “has not been as vigilant as it should have been . . . But that is about to change.” His remarks were made March 8 in a speech at the Edmund Pettus Bridge commemorating the 45th anniversary of the civil rights march on Selma, Alabama, that came to be known as “Bloody Sunday.”

The Department of Justice (DOJ) is also eager to break with the allegedly lax civil rights policies of the Bush administration. Tom Perez, assistant attorney general for civil rights, has appointed a new education section chief, Anurima Bhargava, who comes to the department directly from the NAACP Legal Defense and Educational Fund (LDF), where she had been director of education practice since 2006. "I am excited she will be joining us as we continue our efforts to restore and transform the civil rights division," Perez declared.

Duncan wants to eliminate racial disparities in education in general, including in student discipline in particular. Undoubtedly, Perez does as well. But what will they do in response to a formal complaint filed by the Asian American Legal Defense and Education Fund (AALDEF) in the wake of serious black-on-Asian violence at South Philadelphia High School (SPHS)? AALDEF has charged that the district acted with "deliberate indifference" to the harassment of Asian students and with "intentional disregard" of their welfare.

Interethnic tension is generally ignored in the media, as is the level of violence and disorder in an appalling number of urban schools.

Will the Obama administration act aggressively to ensure Asian rights to a public education free of intimidation and actual violence—surely a basic civil right? Or will such action be taken only when blacks are the victims rather than the perpetrators? If the administration acts in the interest of the Asians, black students will be singled out as racially hostile troublemakers—a conclusion that neither the Department of Education nor the DOJ will welcome, if Duncan’s announcement means what it says.

The Philadelphia story has largely been covered by just the local press. Interethnic tension—of which there is much—is generally ignored in the media, as is the level of violence and disorder in an appalling number of urban schools. And yet everyone who followed the Rodney King riots knows there has been no love lost between Asian shopkeepers and black residents in Los Angeles, for instance. And they know, as well, that learning cannot take place in chaotic environments.

SPHS houses roughly 1,000 students, 70 percent of whom are black, 18 percent Asian, 6 percent Hispanic, and 5 percent white. The Asians are by no means a homogenous group and speak a variety of languages, the most common of which are Chinese dialects, Vietnamese, Spanish, and Cambodian; 12 percent of these Asian students are classified English Language Learners.

The whole Philadelphia district has been plagued by harassment and violence towards Asian students for many years.

According to Asian advocates, the whole Philadelphia district has been plagued by harassment and violence towards Asian students for many years. At SPHS, the assaults have occurred in the cafeteria line, in bathrooms, in stairwells, on school buses, and elsewhere. The incidents ran the gamut from verbal abuse, physical intimidation, blocking doorways, cutting in line ahead of Asian students in the cafeteria, use of anti-Asian racial epithets, and more serious physical abuse including shoving, kicking, and punching—sometimes at the hands of more than one assailant. Advocates have accused school officials, including school Superintendent Arlene Ackerman and Principal LaGreta Brown (both black) of indifference to the plight of Asian students in their charge.

The anti-Asian attacks at SPHS began in October 2008, and prompted Asian advocacy groups to beg for help from the Philadelphia school administration. None was forthcoming, according to AALEF. Three months ago, in early December, tensions came to a head. Trouble started on December 2, and the next day, black students reportedly began to hunt for Asians, checking classrooms were they might be found. A group of apparently organized black students reportedly rushed the stairwells to the second floor where many Asian students were located. Security camera footage from the lunchroom showed a group of 60 to 70 students—most of them black—surging forward with a smaller faction attacking a small group of Asian students.

The AALDEF complaint describes a complete breakdown of adult leadership. One Asian student has charged the lunch staff with “cheering happily,” and others have described security officers as looking the other way. In truth, those charges have been disputed, and other facts are equally hard to pin down. Police and volunteers did try to contain the mounting violence, and at some point the school was “locked down.” School officials later decided to have classrooms dismissed one-by-one, and contacted police to provide extra protection outside the school. The ranks of the police thinned, however, when some had to respond to another emergency, and by the time a group of Asians were heading home they were insufficiently protected. Escorted out of the school by the principal (perhaps only for a short way—another disputed fact), the Asian students spotted blacks lying in wait; they made a futile attempt to run from trouble. In the ensuing attack, one Asian student’s nose was broken, and as many as 13 ended up needing treatment at the local hospital.

Education schools regard training in handling alienated, angry, disruptive urban students who make learning so difficult for their peers as their lowest priority.

Subsequent testimony and written statements of Asian student victims is heartrending. Duyngoc Truong, a SPHS student who had been beaten, told a School Reform Commission that being let down by those in charge "hurt our bodies, it also hurt our hearts. We have the right to go to school and we need to be treated fairly." Wei Chen, president of the Chinese American Student Association, told the school board: "We have suffered a lot to get to America and we didn't come here to fight. We just want a safe environment to learn and make more friends. That's my dream."

Even before the SPHS incident, the Philadelphia Office of the Safe Schools Advocate (OSSA) had issued a blistering report about the level of violence in the system and the inability, or unwillingness, of school officials to take meaningful action. Ironically, OSSA was “defunded” this past summer. According to press accounts, “defunded” is Pennsylvania edu-speak for “we didn’t like the fact that OSSA accurately reported on this issue when we told them not to, so we closed the office and let the staff go.”

Urban school systems in general try to keep the truth about violence and chaos well hidden. A revealing 2007 report by the Department of Education’s Office of the Inspector General makes the obvious point that no school wants to be labeled as “persistently dangerous.” And as long as schools can set the criteria by which persistent danger is measured, they can escape the label.

“Can dangerous schools be great schools?” the Fordham Institute (dedicated to “advancing educational excellence”) asked in September 2009. According to New York City's annual progress reports, it continued, the answer is yes. “Not only did an astounding 97 percent of the Big Apple's schools receive A or B ratings on their 2008–2009 report cards, six of them also appear on the state's ‘most violent’ list.” In 2005, Lisa Snell of the Reason Foundation reported that in 2003–2004, if you believe the data collected from the states themselves, only 26 schools in America were dangerous.

On the question of school discipline, Secretary Duncan’s only expressed concern has been over racial disparities in discipline.

Federal data tells a much more chilling story. According to a 2000 survey conducted by the National Center for Educational Statistics (NCES), 71 percent of public elementary and secondary schools experienced at least one violent incident during the 1999–2000 school year (including rape, sexual battery other than rape, physical attacks or fights with and without a weapon, threats of physical attack with and without a weapon, and robbery with and without a weapon). In 20 percent of public schools, what NCES calls “serious violent incidents” occurred. These data, of course, do not include incidents of bullying and the host of disruptive behaviors that make teaching and learning very difficult.

And yet in 2004, Public Agenda, the highly respected nonprofit research organization, found that 61 percent of professors of education believe that teachers who have encountered discipline problems have been failing to make their lessons engaging; education schools regard training in handling alienated, angry, disruptive urban students who make learning so difficult for their peers as their lowest priority. Disorder and violence—and the complexity of dealing with the problem—are barely on their radar screens.

There was plenty of warning that SPHS could become the scene of dreadful black-on-Asian violence. This past January, USA Today called the school “a cauldron of cultural discontent.” For years, school officials and administrators who were supposed to be nurturing young lives failed to act to protect youngsters whose color apparently made their fate a matter of indifference, if not outright hostility. Not only were racial epithets hurled by black students, but the principal at a public meeting referred disparagingly to “the Asian agenda” of advocacy groups.

The difficulty of creating a school in which students feel safe and are actually learning is much harder if administrators must make sure blacks are not overrepresented and Asians underrepresented.

No adult broke a student’s nose, but adults were complicit in the violence from which the Asian students suffered. Putting aside the question of racism, disorder and violence in an inner-city school has become educational business as usual. In conventional education circles little attention is paid to the whole issue.

The Obama administration has just promised to “restore and transform” civil rights enforcement. On the question of school discipline, Secretary Duncan’s only expressed concern has been over racial disparities in discipline. For a man who comes from Chicago, one might have expected him to note the unacceptably high level of disorder and violence. Instead, he has announced his intention to “collect and monitor the data on equity”—implying that there was racism to uncover with the data properly collected. That is also Superintendent Ackerman’s working assumption. Racism “is the proverbial elephant in the room," she has said. No one racial group should be blamed for the events at SPHS, she warned. Black-on-Asian violence is no occasion to pin blame on blacks.

The DOJ’s new education section chief, steeped in NAACP-LDF culture, may also avert her gaze from the Asian victims of black mobs in an overwhelmingly black school. The LDF, on its website, has an education agenda. It lists only three concerns. The first two are protecting racial preferences and fighting for increased racial integration in schools—i.e., racially balanced school populations through quotas, if necessary. The third is described as the “school to prison pipeline,” which an undated, but clearly recent report calls “one of the most urgent challenges in education today.”

Why is it that Asian-American students are only half as likely as whites to be suspended or expelled from school?

The report describes “the punitive and overzealous tools and approaches of the modern criminal justice system [as having] seeped into our schools, serving to remove children from mainstream educational environments and funnel them onto a one-way path toward prison.” Black students, it notes, represent only 17 percent of public school enrollments nationwide, but account for 34 percent of suspensions. “Moreover, studies show that African-American students are far more likely than their white peers to be suspended, expelled, or arrested for the same kind of conduct at school.”

Evidently, it is beyond imagination that disparities in school discipline reflect disparities in the conduct that merits discipline. Why is it that Asian-American students are only half as likely as whites to be suspended or expelled from school? Does this reveal the powerful anti-white biases of our largely white teaching force today? And does it reveal anti-black hostility on the part of black administrators and teachers when they discipline disproportionately high numbers of black students?

As far as we can tell at present, the Obama’s administration’s perspective is that of the LDF. That is, the big problem with school discipline is not the failure to impose it. Rather, it is the racial disparities that appear when data on disciplined students are collected. It is very hard to make schools like SPHS safe for all those who attend it—especially when those in charge seem unprepared to stop problems before they start by insisting on a culture of civility, which the best schools do. But the difficulty of creating a school in which students feel safe and are actually learning is certainly made much harder if administrators must worry about getting the numbers right—making sure blacks are not overrepresented and Asians underrepresented when disciplined students are counted for federal reporting purposes. Obama administration officials may have their hearts in the right place—worrying about the number of blacks who are floundering in school—but their heads are badly askew.

Abigail Thernstrom is an adjunct scholar at the American Enterprise Institute and the vice chair of the U.S. Commission on Civil Rights. Her most recent book is Voting Rights—and Wrongs: The Elusive Quest for Racially Fair Elections. Tim Fay is the special assistant to the vice chair of the U.S. Commission on Civil Rights.

Tuesday, July 28, 2009

Obama's Misleading Medicine

Monday, July 27, 2009

The most misused word in the health care debate is "reform." Everyone wants "reform," but what constitutes "reform" is another matter. If you listen to President Obama, his "reform" will satisfy almost everyone. It will insure the uninsured, control runaway health spending, subdue future budget deficits, preserve choice for patients and improve quality of care. These claims are self-serving exaggerations and political fantasies. They have destroyed what should be a serious national discussion of health care.

The health-care conundrum involves a contradiction that the administration steadfastly obscures: In the short run -- meaning four to eight years -- government cannot both insure the uninsured and rein in health spending. Here's why. The notion that the uninsured get little or no care is a myth: They now receive about 50 to 70 percent as much health care as the insured. If they become insured, they would use more health care, possibly as much as today's insured. That would increase both government and private health spending, depending on how the insurance is provided.

Until health-care costs are better controlled, expanding insurance coverage will be expensive. The president talks endlessly about the need to limit spending and eliminate waste. These are worthy goals. But changing the way medical care is delivered and paid for would take years and involve disruptive and unpopular measures. Patient co-payments might increase; networks of doctors and hospitals might displace individual practices; the tax exclusion for employer-paid health insurance might be curbed. Obama downplays the obstacles. His "reform" isn't likely to compel needed changes, partly because it's not clear what will work.

Evaluations of proposals reflect this reality. The Congressional Budget Office judges that the legislation in the House would, through expanded Medicaid and subsidies for private insurance, reduce the uninsured from 46 million in 2007 to 17 million in 2019. But the cost would be $1 trillion over a decade; of that, $239 billion would add to the budget deficit. Worse, the costs would rise faster than the sources of financing, including a tax on the wealthy. In 2019, the projection's last year, the deficit would be $65 billion. Assuming that the deficit rises 4 percent a year, the cumulative shortfall in the second decade would total about $800 billion.

But Obama sees all blue sky. "Here's what reform will mean for you," he said at a recent rally. "It will mean lower costs and more choices and coverage you can count on. Health insurance reform will save you and your family money," he said. (Note: Except for subsidies, it's doubtful families will experience savings anytime soon.) And later: "We'll also change incentives so that our doctors and our nurses can finally start providing patients with the best care and not just the most expensive care. And if we do that, then reform . . . will lower our deficits in the long run."

Contrast Obama's reassuring rhetoric with this exchange at a congressional hearing between Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, and Douglas Elmendorf, head of the CBO.

Conrad: "From what you have seen from the product of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?"

Elmendorf: "No, Mr. Chairman. In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs. . . . The (cost) curve is being raised."

Judged objectively, "reform" may do exactly the opposite of what Obama says. But because the president is so well-spoken, he has the ability to make misleading statements sound reasonable or sophisticated. Still, they're misleading.

The administration had to make choices; it could emphasize expanded insurance coverage ("access") or cost control, but not both. It chose coverage, embracing the long-standing liberal grail of "universal" insurance. Millions of Americans would receive more health care, though how much their health would improve is uncertain (the administration can't logically argue that much health care is wasteful and also that the uninsured will automatically benefit from more of it). Many with insurance would gain the peace of mind that they won't lose it.

But what helps many Americans as individuals may hurt society as a whole. That's the paradox. Unchecked health spending is depressing take-home pay, squeezing other government programs -- state and local programs as well as federal -- and driving up taxes and budget deficits. The president has said all of this; he simply isn't doing much about it. He offers the illusion of "reform" while perpetuating the status quo of four decades: expand benefits, talk about controlling costs. The press should put "reform" in quote marks, because this is one "reform" that might leave the country worse off.

Sunday, March 29, 2009

What is Liberalism? It's Discrimination Against Asian-Americans

New UC admissions policy gives white students a better chance, angers Asian-American community

By Lisa M. Krieger

Mercury News
Posted: 03/27/2009 07:55:18 PM PDT

A new University of California admissions policy, adopted to increase campus diversity, could actually increase the number of white students on campuses while driving down the Asian population.

Now angry Asian-American community leaders and educators are attacking the policy as ill-conceived, poorly publicized and discriminatory.

"It's affirmative action for whites," said UC-Berkeley professor Ling-chi Wang. "I'm really outraged "... and profoundly disappointed with the institution."

At an Asian Pacific Americans in Higher Education conference Friday in San Francisco, Asian activists also noted the policy will result in negligible increases in African-American students and only a modest climb in the number of Latinos. But it's the drop in the already significant Asian count that has many in that community so upset.

Although Asians account for only 12 percent of the state's population, they now represent 37 percent of UC admissions — the single largest ethnic group. At UC-Berkeley, 46 percent of the freshman class is Asian. There are dormitories with Asian themes and spicy bowls of pho are served up in the Bear's Lair cafeteria.

Under the new policy, according to UC's own estimate, the proportion of Asian admissions would drop as much as 7 percent, while admissions of whites could rise by up to 10 percent.

"The UCs are a means of upward mobility," said Anthony Lin, a San Jose resident who is a graduate student at University of California-Los Angeles. "The University of California, because it is a research institution, is very prestigious."

More diversity

Since its adoption by the UC Regents in February, the policy has triggered Asian suspicions of the UC entry system not felt since the mid-1980s, when a change in admissions policy caused a decline in Asian undergraduate enrollment. In 1989, then-UC-Berkeley Chancellor Ira Michael Heyman apologized for the policy.

"I fear a general sense that there are too many Asians in the UC system," said Patrick Hayashi, former UC associate president.

In this newest overhaul of eligibility requirements, UC has eliminated SAT subject tests — which Asians tend to do well on.

Those critical of the proposed plan vow to get it reversed by appealing to those who hold UC's purse strings: state legislators. On Tuesday, two panels of the California Legislature will jointly hold a hearing to review the policy.

Meanwhile, supporters of the change, which results from a faculty study and is backed by president Mark G. Yudof, see it as a way to ease the widening achievement gap on their campuses. The impact of the new policy, according to UC's preliminary analysis, would be to simplify the application process and cast a wider net among promising low-income students.

It's a consequential shift for the UC system, reflecting its effort to make UC more accessible. The new policy applies to students entering college in fall 2012; they are now high school freshmen.

More than a decade after California passed Proposition 209, voting to eliminate racial preferences, university administrators have struggled to create a better balance on campus. The use of a strict meritocracy has been blamed on the rise of "the Asian campus." Some say it has come at the expense of historically underrepresented blacks and Hispanics — as well as whites.

"The president would not have supported the policy had he not felt it was fair and created opportunity," said Nina Robinson, UC's director of policy and external affairs for student affairs.

Many students — especially low-income and/or minority students — become ineligible to apply because they do not take the subject matter tests, she said.

Flawed report

But an analysis of the change predicts that the number of Asians admitted to UC could decrease because Asians tend to excel on the "subject tests," which are no longer part of the application.

The number of admitted whites could increase, because more weight will be given to the "reasoning SAT," which favors American natives.

African-Americans and Latinos could benefit slightly from the expanded class-ranking criteria because top students from troubled schools such as San Jose's Lick High School could be UC-eligible.

Critics say they are frustrated because UC has not made public the statistical analysis on which their decision was based.

But the report that created the data for that analysis, called the 2007 CPEC Eligibility Study, is deeply flawed, according to New York University education professor Robert Teranishi.

"It shows a wide margin of error for Asians. It is not a good predictive model, perhaps because the Asian population is very diverse. 'Asian' represents a lot of different demographic backgrounds," he said. "It should not be used to guide major policy decisions." Wang, who compared it to "peddling snake oil," complained that Asians had not been invited to participate in the process.

"The changes over the last two years took place inside the ivory tower and closed the door, without the public's knowledge," he said.

Added Hayashi: "A public university should be more responsive. Private schools can do anything they want. But public schools have a different set of objectives. "It will have a devastating impact on our community. It is a fatal mistake to think it will blow over."

The university has the power to set admissions criteria, said Steve Boilard of the California Legislative Analyst's Office. But the Legislature approves its $3 billion in funding every year.

"This is a dynamic where we need to work together to ensure its mission," he said.

Thursday, February 05, 2009

What's Up With All the Tax Probkems with Obama's Staff?

No wonder the Democrats love taxes. They don’t pay ‘em. I think we could eliminate the federal budget deficit if the Democrats just paid the taxes they owe.

Nathan Moore: “The problem here, at least in my view, is not so much that Solis’ husband had some rather antique tax liens hanging around, but that the Obama administration’s vetting process has revealed itself to be decidedly incompetent. Or, more accurately, arrogant, which really is just a subform of incompetence. . . . The message is clear, no matter how earnestly the president employs Newspeak rhetoric in a vain attempt to muddle it - there are two sets of rules, one for us, and one for them. If they truly believed there was one set of rules, the administration would have taken it upon itself to weed out the tax-encumbered nominees from the process, but they didn’t - and that speaks volumes.”

I almost forgot to mention the problems of Democratic Congressman Charles Rangel!

Solis Nomination Vote Delayed After Tax Issue Arises

By Holly Rosenkrantz

Feb. 5 (Bloomberg)
-- A Senate committee put off its vote on Representative Hilda Solis’s nomination as labor secretary, one day after her husband paid to settle tax liens.

White House Press Secretary Robert Gibbs said Solis’s nomination wasn’t in trouble even though the Senate Committee on Health, Education, Labor and Pensions today delayed the vote. Her husband paid about $6,400 yesterday to settle the liens.

Solis is the fourth of President Barack Obama’s nominees to top posts whose family’s taxes have become an issue in the Senate’s confirmation process. Three have said they had failed to pay all their taxes, and two withdrew from consideration.

Gibbs said Solis wasn’t involved in the liens and shouldn’t be blamed. “We’re not going to penalize her for her husband’s mistakes,” Gibbs told reporters at the White House. “Her tax returns are in order.”

Former Senator Tom Daschle, a South Dakota Democrat, withdrew Feb. 3 as nominee for health secretary after questions arose about errors on his federal taxes. Hours earlier, Nancy Killefer withdrew from consideration as deputy director of the White House Office of Management and Budget. She also cited a personal “tax issue.”

Timothy Geithner was confirmed as Treasury secretary on Jan. 2, overcoming concerns that he underpaid federal taxes in previous years.

Auto Repair Business

Solis’s accountant was unaware of the tax liens until about two days ago, White House spokesman Tommy Vietor said. The liens had been outstanding for as long as 16 years against an auto repair business belonging to Solis’s husband, Sam Sayyad. The liens were first reported today by USA Today.

“He believes he paid the taxes,” Vietor said. “He believes they are only county fees and assessments, and he is planning to appeal.”

The couple filed their taxes jointly. The liens were on a business for which Sayyad was the sole proprietor.

Solis, a California Democrat, has already had her nomination delayed while Republicans examine her support for union legislative goals such as the Employee Free Choice Act, which would make it easier to unionize. Labor leaders today said it was important that the Senate confirm her nomination.

“As the daughter of two immigrant workers and proud union members, Hilda Solis is the embodiment of the American dream,” said Andrew Stern, president of the Service Employees International Union.

Senator Michael Enzi of Wyoming, the top Republican on the committee considering her nomination, will examine the new issue, said Craig Orfield, Enzi’s spokesman. Enzi hasn’t yet decided how he will vote.

“Obviously, there are new tax issues to review now,” Orfield said. “It’s going to take a few days” because “we’re trying to get answers and verify a lot of new information.”

To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net
Last Updated: February 5, 2009 18:19 EST

Daschle Withdraws Nomination Following Tax Questions

By Kristin Jensen and Edwin Chen

Feb. 3 (Bloomberg) -- Former Senator Tom Daschle withdrew as nominee for secretary of health and human services after questions arose about errors on his federal taxes.

Hours earlier, another of President Barack Obama’s nominees, Nancy Killefer, withdrew from consideration as deputy director of the White House Office of Management and Budget. She also cited a personal “tax issue.”

The twin withdrawals in rapid succession dealt Obama his worst setback as president, threatening to delay his efforts to enact comprehensive health care overhaul and inject greater accountability into his administration.

Fixing the nation’s health system “will require a leader who can operate with the full faith of Congress and the American people and without distraction,” Daschle, 61, said in a statement today. “Right now, I am not that leader.”

Obama said in a statement that he accepted Daschle’s decision with “sadness and regret.” In a series of previously scheduled interviews with television networks later in the day, Obama took responsibility for the demise of the nomination.

“Did I screw up in this situation? Absolutely,” Obama told NBC. “I’m willing to take my lumps.”

He said the episode, while “an embarrassment,” should not detract from his agenda.

Amended Returns

Daschle’s nomination faced delays after he amended three years of returns on Jan. 2 for unreported income, including personal use of a car and driver provided by Leo Hindery Jr., founder of the private-equity firm InterMedia Advisors. Daschle, who sat on the firm’s board, paid $140,000 in back taxes and interest.

Killefer was to oversee White House efforts to make government more accountable for its spending.

In her letter to Obama, Killefer, 55, said she came “to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid.”

Daschle’s withdrawal stunned his former colleagues in the Senate, many of whom had defended him.

“It’s regrettable,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat. “I thought he was going to get confirmed.” Daschle also was to have held a senior post within the White House.

Daschle “did the honorable thing to spare his family, the president and his colleagues in the Senate from a tough political battle,” Illinois Senator Dick Durbin, the Senate’s No. 2 Democrat, said.

Health Care Role

The withdrawal “really sets us back a step” in the drive to overhaul the health-care system because “there are very few people who could have stepped into the role he was going to play,” Durbin said.

Daschle’s tax errors are part of “an unfortunate trend here” that shows “some serious problems with the vetting process” in the Obama administration, Republican Senator John Cornyn of Texas said in an interview yesterday.

Like Daschle and Killefer, Treasury Secretary Timothy Geithner also faced questions about back taxes he had to pay. He was confirmed Jan. 26.

Today’s events are all the more reason for Obama to push his economic stimulus bill through Congress quickly and chalk up a big win as quickly as possible, said analyst Paul Begala, a onetime top adviser to President Bill Clinton.

“It all depends on passing a successful economic plan,” he said. “The country believes in this new president and wants him to succeed.”

Economy Is Key

“This is somewhere between a huge embarrassment and, at least temporarily, debilitating,” said Washington-based political analyst Stuart Rothenberg. “But if a year from now the economy is coming back and the U.S. looks strong, and our international reputation is up, nobody is going to worry about this other stuff.”

Three of Obama’s nominees now have withdrawn before going through the confirmation process. Obama’s first pick to lead the department, New Mexico Governor Bill Richardson, withdrew last month amid a federal investigation into the state’s government.

In seeking replacements for Daschle and Killefer, the Obama White House now must adhere to “zero-tolerance for vetting problems,” and Obama must pick “ivory snow” nominees with spotless records, said Charlie Cook, publisher of the Cook Political Report.

Obama Pledge

That job is no mean feat in part because of Obama’s own campaign pledge to limit the role of lobbyists in his administration, as well as to instill a new era of personal responsibility and government accountability.

“Obama set incredibly high standards” that may continue to “expose him to suggestions of hypocrisy,” Cook said.

Still awaiting confirmation are William Lynn, Obama’s nominee to be deputy defense secretary, and William Corr, the president’s pick as the next deputy secretary of health and human services.

Lynn, 55, is senior vice president in Raytheon’s Washington office and oversees government lobbying for what is the nation’s fourth-largest defense contractor. He was a registered lobbyist until March 2008.

Critics said Corr, executive director of the nonprofit advocacy group Campaign for Tobacco-Free Kids, acted as a lobbyist. A campaign spokesman, Joel Spivak, said Corr “was not ever a fulltime lobbyist.”

“Obama came in with such high expectations and lofty rhetoric,” said Rothenberg. “Now he’s encountering the difficulties of governing.”

Vetting Process

The Daschle and Killefer incidents suggested less-than- rigorous background checks on potential jobholders.

“The question is whether this somehow uncovers some weaknesses in the early days of the administration that will show up later,” Rothenberg said.

At the White House, press secretary Robert Gibbs said Obama retains confidence in the vetting process.

“The president has confidence in the processing,” Gibbs said. “The bar we’ve set is higher” than any past administration, he said, adding that it would take more than two weeks for the president to make good on his pledge to bring change to Washington.

“Thankfully, we’ve got four years to try,” Gibbs said.

The biggest casualty, several analysts said, may be Obama’s aspirations to overhaul the U.S. health care system.

“Having such a high powered, well-wired guy as Daschle as the quarterback on health care was going to be huge,” Cook said.

“I’m sure they’ll get somebody that’s quite competent. But they’re not going to be able to step in the same way that Tom Daschle did,” he said. “So of course it’s a setback.”

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Edwin Chen in Washington at Echen32@bloomberg.net

Tax issues prompt Obama nominee to withdraw

Another one bites the dust.

February 3, 2009

WASHINGTON (CNN) -- Nancy Killefer withdrew her nomination Tuesday to become the Obama administration's chief performance officer, citing unspecified problems with District of Columbia unemployment tax.

The post is a new one, set up to help the incoming administration "scrub" waste from the federal budget. But in a letter to President Barack Obama, Killefer said her tax issue "could be used to create exactly the kind of distraction and delay those duties must avoid."

"Because of this I must reluctantly ask you to withdraw my name from consideration," she wrote.

Killefer was nominated to be deputy director of management at the Office of Management and Budget, and her duties as chief performance officer were added on. The OMB portion required her to be confirmed by the Senate.

Killefer is the third Obama nominee to face tax troubles, after questions about Treasury Secretary Timothy Geithner and former Senate Majority Leader Tom Daschle, Obama's pick for health and human services secretary, who also withdrew Tuesday.

A senior administration official told CNN that Killefer's tax issues dealt with household help, and that Obama aides had expected her to be raked over the coals after the Geithner and Daschle nominations. The official said that Killefer had been upfront about the matter and that Obama's staff had reviewed the questions raised and decided they were comfortable with her before the announcement of her nomination.

Geithner, whose office oversees the Internal Revenue Service, was confirmed after admitting that he had failed to pay in timely fashion more than $34,000 in self-employment taxes while he worked at the International Monetary Fund from 2001 to 2004. The issue was caught during a 2006 audit, and Geithner told the Senate that the debt was incurred unintentionally.

Daschle, who had been awaiting confirmation, previously had acknowledged that he failed to pay taxes on a car and driver provided by a friend and on $80,000 in consulting fees after he left the Senate. He called the matter a mistake and said he paid his taxes in full, but he announced Tuesday that he "will not be a distraction" to the administration. Obama said he accepted Daschle's withdrawal "with sadness and regret."

Killefer, a senior director at the management consulting firm McKinsey & Company, was nominated last month as Obama pledged to cut unnecessary spending and bring "a new sense of responsibility to Washington." Officials said her position would restore fiscal order and reform government.

"We can no longer afford to sustain the old ways when we know there are new and more efficient ways of getting the job done," Obama said in announcing her nomination.

The Congressional Budget Office announced last month that the deficit for the current budget year will be $1.2 trillion. Obama said at the time the government would have to "make tough choices" in the budget "to address both the deficit of dollars and the deficit of trust."

Killefer served as assistant secretary for management and chief financial officer of the Treasury Department during the Clinton administration.

CNN's Ed Henry contributed to this report.

Monday, January 19, 2009

Geithner's failure to pay taxes just an 'honest mistake'?

The Chicago Sun-Times
January 17, 2009

Would it be OK if I stopped paying my taxes until Barack Obama names me to be his secretary of the Treasury?

That is a deal I would like to get. That is the deal financial wizard Timothy Geithner got.

He didn't pay all of his federal taxes for years. Then, after Obama decided to name him Treasury secretary, the president-elect's vetting team discovered Geithner's little oversight.

Not paying your taxes is considered serious for some people. But not for Geithner, a Wall Street "wonder boy" -- he is 47 -- who is president of the Federal Reserve Bank of New York and was instrumental in putting together the recent Wall Street bailout package.

You would think a guy like this would know about paying taxes, but no. Mistakes were made.

Geithner failed to pay the proper self-employment taxes for 2001, 2002, 2003 and 2004, even though he was sent documents telling him he had to do so.

But in 2006, Geithner got a document he couldn't ignore. The Internal Revenue Service sent Geithner a notice saying he had not paid his taxes for 2003 and 2004, and Geithner paid up.

But he did not pay up for 2001 and 2002, even though he must have known that he skipped taxes for those years, too.

He didn't pay those taxes until Obama decided he wanted Geithner to head the Treasury and sent vetters to look into Geithner's past.

The vetters discovered Geithner's little tax error in November and told Geithner. Then Geithner paid up, with interest. The vetters also told Obama, of course.

According to an article by Politico's Craig Gordon and Amie Parnes, Obama "decided to push ahead with the nomination anyway because he 'still wanted him.'"

At the end of the day, a source said, "Barack decided that he was the best person for a really important job."

OK, I get it.

The economy is teetering on the brink, and we need to cut corners a little. We can't be all that scrupulous and nitpicky when the future of the nation is at stake.

So in November, Team Obama announced that Geithner had this little problem and was paying his back taxes with interest and that it was all an honest mistake and no big deal, right?

Wrong. They decided to keep it a secret. But the Wall Street Journal discovered it and blew the whistle Tuesday.

The Senate Finance Committee has been looking into Geithner -- it has to vote on his appointment -- and discovered something else.

According to Gordon and Parnes: "In addition, Geithner included payments to overnight camps in calculating his dependent child care credit in 2001, 2004 and 2005.

His accountant informed him in 2006 that the camps were not allowable expenses. The committee notes that Geithner did not file amended returns to fix the mistake."

Can I get this deal? Can I ignore my accountant? He is always telling me that my trips to Vegas are not allowable under "necessary mental health expenses," and fool that I am, I keep listening to him.

The Geithner foul-up is different from the Bill Richardson foul-up. The Obama vetters were unable to get Richardson to give them all of the background information they needed, but Obama went ahead and appointed Richardson to the Cabinet anyway. Then that blew up, and Richardson withdrew his name.

With Geithner, the vetters found the bad stuff -- yay! -- but everybody thought they could sweep it under the rug. Boo.

Now Republicans are forcing a delay on the Geithner hearing until after Obama is inaugurated.

Team Obama says Geithner made "honest mistakes."

OK. I'll buy that. But as secretary of the Treasury, Geithner would be in charge of the Internal Revenue Service. And we will see how easy he is on other people when they say they made "honest mistakes."

Monday, December 22, 2008

Liberals Are Cheap Bastards

The "great" Nick Kristof of the New York TImes states the obvious in an surprisingly refreshing op-ed:

December 21, 2008
Op-Ed Columnist
Bleeding Heart Tightwads

This holiday season is a time to examine who’s been naughty and who’s been nice, but I’m unhappy with my findings. The problem is this: We liberals are personally stingy.

Liberals show tremendous compassion in pushing for generous government spending to help the neediest people at home and abroad. Yet when it comes to individual contributions to charitable causes, liberals are cheapskates.

Arthur Brooks, the author of a book on donors to charity, “Who Really Cares,” cites data that households headed by conservatives give 30 percent more to charity than households headed by liberals. A study by Google found an even greater disproportion: average annual contributions reported by conservatives were almost double those of liberals.

Other research has reached similar conclusions. The “generosity index” from the Catalogue for Philanthropy typically finds that red states are the most likely to give to nonprofits, while Northeastern states are least likely to do so.

The upshot is that Democrats, who speak passionately about the hungry and homeless, personally fork over less money to charity than Republicans — the ones who try to cut health insurance for children.

“When I started doing research on charity,” Mr. Brooks wrote, “I expected to find that political liberals — who, I believed, genuinely cared more about others than conservatives did — would turn out to be the most privately charitable people. So when my early findings led me to the opposite conclusion, I assumed I had made some sort of technical error. I re-ran analyses. I got new data. Nothing worked. In the end, I had no option but to change my views.”

Something similar is true internationally. European countries seem to show more compassion than America in providing safety nets for the poor, and they give far more humanitarian foreign aid per capita than the United States does. But as individuals, Europeans are far less charitable than Americans.

Americans give sums to charity equivalent to 1.67 percent of G.N.P., according to a terrific new book, “Philanthrocapitalism,” by Matthew Bishop and Michael Green. The British are second, with 0.73 percent, while the stingiest people on the list are the French, at 0.14 percent.
(Looking away from politics, there’s evidence that one of the most generous groups in America is gays. Researchers believe that is because they are less likely to have rapacious heirs pushing to keep wealth in the family.)

When liberals see the data on giving, they tend to protest that conservatives look good only because they shower dollars on churches — that a fair amount of that money isn’t helping the poor, but simply constructing lavish spires.

It’s true that religion is the essential reason conservatives give more, and religious liberals are as generous as religious conservatives. Among the stingiest of the stingy are secular conservatives.
According to Google’s figures, if donations to all religious organizations are excluded, liberals give slightly more to charity than conservatives do. But Mr. Brooks says that if measuring by the percentage of income given, conservatives are more generous than liberals even to secular causes.

In any case, if conservative donations often end up building extravagant churches, liberal donations frequently sustain art museums, symphonies, schools and universities that cater to the well-off. (It’s great to support the arts and education, but they’re not the same as charity for the needy. And some research suggests that donations to education actually increase inequality because they go mostly to elite institutions attended by the wealthy.)

Conservatives also appear to be more generous than liberals in nonfinancial ways. People in red states are considerably more likely to volunteer for good causes, and conservatives give blood more often. If liberals and moderates gave blood as often as conservatives, Mr. Brooks said, the American blood supply would increase by 45 percent.

So, you’ve guessed it! This column is a transparent attempt this holiday season to shame liberals into being more charitable. Since I often scold Republicans for being callous in their policies toward the needy, it seems only fair to reproach Democrats for being cheap in their private donations. What I want for Christmas is a healthy competition between left and right to see who actually does more for the neediest.

Of course, given the economic pinch these days, charity isn’t on the top of anyone’s agenda. Yet the financial ability to contribute to charity, and the willingness to do so, are strikingly unrelated. Amazingly, the working poor, who have the least resources, somehow manage to be more generous as a percentage of income than the middle class.

So, even in tough times, there are ways to help. Come on liberals, redeem yourselves, and put your wallets where your hearts are