Stimulus

President Joe Biden and Vice President Kamala Harris are inheriting the worst economic crisis since the Great Depression—though the stock market won’t tell you that. The United States’ K-shaped recovery, through which billionaires reap record profits while average families lose income, is symptomatic of an economic system that siphons money to the already wealthy at the expense of working Americans. The pandemic has only accelerated this trend.

The educational institutions eligible for multimillion-dollar coronavirus federal aid include public universities with high rates of low-income students, struggling community colleges, and, controversially, Ivy League universities with multibillion-dollar endowments.

Columbia—both the students and the institution—may reap direct financial benefits from the federal stimulus legislation now in the final stages of congressional debate. break The Senate voted on Monday to close debate over the $838 billion stimulus bill. If the final draft passes what is expected to be a Senate vote, it will have to be reconciled with the House of Representatives' version before hitting the president's desk. New York Senator Charles Schumer (D-N.Y.) has championed an amendment that would provide a $2,500 per student tax credit to families who pay college tuition, and the bill may also lead to funding for the University's campus expansion in Manhattanville. Schumer's plan, which was added in January to both House and Senate drafts of the stimulus package, would allow families to claim a tax credit for each of up to three children currently enrolled in college. According to a press release from Schumer's office, the credit would remain in effect for two years, starting in 2009, and would constitute an "overall benefit for tuition-paying families that is at least two-and-a-half times greater than the current tax deduction available under law." "This is a major breakthrough for a proposal that will save middle-class families thousands of dollars," Schumer said in a January press release. The House of Representatives passed its own $819 billion version of stimulus package—including Schumer's proposed tax credit—on Jan. 29, although not a single Republican representative voted for it. Meanwhile, debate raged on in the Senate over the total sum of the proposed recovery package, and billions of dollars in aid were eventually cut from the Senate's version of the plan in order to reach a consensus. For Monday's vote to close debate on the bill, Senate Democrats won the support of only three Republicans, barely garnering them the 60 required votes. At Friday's University Senate meeting, University president Lee Bollinger explained that Columbia hopes to see funding for its campus expansion in the federal stimulus bill. "We are making a case that part of the stimulus package would be well-spent on Manhattanville," Bollinger said. Professor Samuel Silverstein, a University senator and biophysics professor from the Columbia University Medical Center, agreed. "There is about to be an enormous bolus of funds for infrastructure by the federal government," he said, asking Bollinger whether Columbia might have a project that is "quote, shovel ready ... so that perhaps rather than this being a deficit it actually turned out to be one of the biggest bonuses we have ever gotten?" Because part of the Manhattanville project involves infrastructure investment, it can be presented as a prime candidate for inclusion in the federal stimulus. "Even I could make an argument that the Bathtub is part of the infrastructure of northern Manhattan," Silverstein said. Bollinger agreed but was less enthusiastic as he explained that there are many similar projects that have probably been proposed in the same vein. "We're not the only ones that dawned on them [Congress]," he noted. "Nothing in Manhattanville or anywhere else is going to go forward unless we have the money in hand to build it," University provost Alan Brinkley said at a Student Affairs Caucus meeting on Friday. Columbia could potentially satisfy a significant portion of the project's funding requirements through public funds if the project were included in the stimulus package legislation.

The focus of international economics has shifted from banks that were "too big to fail" to financial systems that are "too big to save," Larry Summers said in a speech at the School of International and Public Affairs on Thursday. Summers, the former president of Harvard University and director of the National Economic Council, praised SIPA, which he said contributes an "enormous amount to the riches of the international policy debate." "Though I do not always find myself in agreement with your faculty, I do find myself stimulated, sometimes with irritation, by the writings of your faculty," Summers told the 200 students and faculty at the Gabriel Silver Memorial Lecture. Despite having served in high positions of economic governance, Summers kept talk of the economic collapse and recovery to practical terms. He framed his argument around what he referred to as the fallacies of aggregation and avoiding past error—cautioning that what is good for one is not necessarily good for all, and that reforming damaging behavior is not as simple as "not doing today what was painful yesterday." "Our economic rhetoric that we must work ourselves out of debt one by one and do virtuously today what we should have done yesterday is a simple morality tale," Summers said. "But as most simple morality tales, it is not one that is right." Although Summers has recently been supportive of economic stimulus, he was cautious about calling for more impactful economic reform. Referring to an "unfortunate cleavage" in the nation's political parties, he was equally critical of progressives who "feel it's necessary to attack many long-standing sins of business and want to bring about an era of reform" and conservatives who believe in "placing enormous interests on improving the animal spirits of business." "Rather, the focus needs to be on increasing demand–first, the continuing importance of fiscal stimulus to move the economy forward," Summers said. "If the private sector is unable or unwilling to borrow and increase its spending, there is no alternative but for a government to be prepared on a temporary basis." Scott Barrett, the Lenfest-Earth Institute Professor of Natural Resource Economics, called Summers' talk "masterful" and "a positive message from a speech about a gloomy situation." "It was not only what he said, but how he said it. He spoke without notes, and yet was organized, clear, and powerful." As Harvard's president, Summers suggested that "innate" differences account for the underrepresentation of women in scientific careers in 2005, and lost $1.8 billion of Harvard's endowment to risky derivative investments—and some said that his controversial history drew away from the speech. "I was more impressed with what he said than I am perhaps with what I knew about him before," Michael Feiler, Associate General Counsel for legal advice to the University, said. "I think he had a bit of a stormy career at Harvard, but he did present a very good way out of our problems." news@columbiaspectator.com

A few days ago, I was watching a movie and talking to friends when I pulled out my phone and started playing solitaire. Right after I did so, I realized that I had turned to a mindless game in order to fulfill my need for total stimulation. This isn't unique to me. We've all seen people in class using laptops, shopping online, and chatting with friends as they simultaneously take notes on the lecture. We feel the need to be in constant communication with our friends and the rest of the world through texting, Facebook, Twitter, and YouTube. These days, doing two things at once is no longer a skill—that's for amateurs. Try doing three, four, five things at a time. Not only are we multitasking, but we've come to expect quick results as well. We have trouble simply doing nothing or waiting for answers. It sounds like our generation has ADD. Technology has enabled the creation of a fast-paced world where the flow of information is continuous and easily accessible. Our inability to wait for answers and our newfound ability to find them with the mere click of a button have made us accustomed to instant gratification. We can't wait to talk to our friends when we see them, we want to text them right away. We don't want to wait to buy a dress until we get home, we buy it in class. This need for instant gratification is why it hasn't been completely surprising that our generation—the group that came out in record numbers to campaign and vote in the 2008 election—has become impatient with President Barack Obama. Those who were Columbia students in 2008 still remember the energy and excitement on campus surrounding the presidential election, and Obama's campaign in particular. Politics was in style, and the rhetoric of "hope" and "change" was contagious and exhilarating. It seemed as if everyone cared about the election, and was actively participating in one way or another. Obama's election was our generation's political coming of age. Once Obama took office, however, people began to lose interest. He certainly had bumps in the road—exacerbated by Republicans' vow to oppose anything he proposed—but he was actively working to implement ambitious policies and he was making progress. Unfortunately, results weren't nearly as immediate as we hoped. Unlike uploading a video to YouTube or watching a movie online, policy change is messy and takes time. It has taken time for the effect of the stimulus package to become clearly visible across the country. But only days after its passage, some Americans, frustrated that they didn't wake up with jobs, declared the bill a failure and placed the blame on Obama. The instant gratification we get when we publish a status update or a tweet does not translate to economics or the political process. Obama inherited a dreadful economy, two wars, and a fiercely partisan Congress—it's going to take some time to undo, or at least improve, the mess he inherited. As Bill Clinton said in a speech in Everett, Wash., "I'd like to see any of you get behind a locomotive going straight downhill at 200 miles an hour and stop it in 10 seconds." The problem with our generation's ADD is that people just aren't aware of exactly what Obama has accomplished in office thus far. In part, his administration is to blame—if it had shifted the fully transparent, open, and connected communication style of the campaign to the White House, then perhaps the American public wouldn't be able to grumble about Obama's presumed lack of progress. But it is up to the American people to sustain their focus on current events to see initiatives through, not to immediately write off policies as failures. In reality, Obama has taken on more than many past presidents, and has done so in the face of an opposition that refuses to cooperate on anything, even traditionally bipartisan issues. We avoided a second Great Depression with financial reforms and a stimulus bill, and passed landmark health-care legislation that will make life much easier for millions of Americans. That's progress. During the buildup to the midterm elections, it became clear that many young Americans had tuned out. Those who had once been engaged in Obama's election and the political process had become apathetic. But it is important to understand that implementing successful policies for a nation of 300 million people may take longer than the instant results we see in our technologically enhanced daily lives. We should not be discouraged by results that take time to become visible. Let us get the facts and analyze them before we draw conclusions. With all of the problems our country faces, this is no time for political ADD.   Alexandra Katz is a Barnard College senior majoring in political science. Umm, Excuse me runs alternate Tuesdays.

Is your family struggling to pay for your education? Well, it might get even harder. The American Opportunity Tax Credit, created as part of the American Recovery and Reinvestment Act of 2009—also known as the stimulus package—is set to expire at the end of the year. Unless Congress acts, the average American family, and the average Columbia student, will pay an additional $1,700 per year in tuition. The AOTC expanded the pre-existing Hope Credit so that it would assist families in higher- and lower-income brackets that were not previously eligible. The tax credit helps students by paying for two-thirds of their tuition costs at a four-year public college and by essentially paying the costs of a community college education. If the credit disappears, the attainability of a college education for many Americans may slip away. With the AOTC, a taxpayer with an income of less than $80,000, or $160,000 for joint filers, who pays a student's tuition is eligible for $2,500 each year for up to four years of college. Those with higher incomes are eligible for a reduced credit. Even those who do not owe taxes can benefit from the credit—it is partially refundable, allowing a low-income family to receive up to $1,000 to put toward post-secondary education. Compared to the Hope Credit, the AOTC assists more students and is worth up to $700 more per student. It can also be claimed for the first four years of post-secondary education (up from two years under the Hope Credit), and it can be put toward expenses other than tuition, including textbooks and other fees. In the face of economic strain as well as rising college tuition costs, families are finding it harder and harder to pay for college. This tax credit makes a significant impact. Just look at the statistics. The Treasury Department reports that 8.3 million people used the tax credit last year, averaging about $1,700 per college student. The cost of attending Barnard or Columbia, including tuition, room and board, and additional fees, is upwards of $56,000 per year, totaling $224,000 for all four years. According to both schools' financial aid offices, about 50 percent of Barnard and Columbia College students receive financial aid. For a large portion of our community, this assistance is the difference in making college a possibility. Even the colleges themselves have a hard time paying tuition—financial aid offices often don't have enough to cover students' needs, leaving many families with a bigger bill than they can afford. In addition, the majority of undergraduate financial aid packages provide a large portion of their assistance in the form of student loans. While loans are helpful in allowing students to attend school, this deferred payment method is still exorbitant and places a great deal of strain on students' finances well after college. In recent weeks, President Barack Obama has called upon Congress to make the AOTC permanent, making college affordable for more Americans. And, to no one's surprise, Republicans in Congress are pushing back. They plan to cut educational funding by 20 percent, and it is unclear whether the credit will survive. In discussing the AOTC, Obama has said that he hopes to create a level playing field where "every child in this country has a chance to rise above any barriers of race or faith or station, and they can fulfill their God-given potential; where the American Dream is a living reality." He added, "By opening the doors of college to anyone who wants to go, that's a future we can help build together." Paying for education is a long-term investment in the future of this country—the AOTC is the government's investment in us. Though our country has historically emphasized the ability to rise to the top through hard work, it is important to note that the low-hanging fruit of the past is no longer a reality in the present. If the government fails to extend the AOTC, it will deny millions of American students access to college by withholding the much-needed assistance to pay for it. Under the economic constraints of today's world, hard work and motivation often prove insufficient. This tax credit is too important to the success of the American people for it to be taken away. It's up to our leaders to decide whether they are ready to make education accessible to all Americans. Alexandra Katz is a Barnard College senior majoring in political science. Umm, Excuse me runs alternate Tuesdays.

Americans sat bewildered last Tuesday watching Timothy Geithner's remarks, a series of vagaries culminating in incomprehensible simplifications of the stimulus plan, including the "Bad Bank" and a "stress test" to analyze the balance sheets of banks in need of assistance. break Despite the off-putting vagueness, it soon became clear that the stimulus plan is a much more farsighted remedy for this economic crisis than Franklin Delano Roosevelt's New Deal was for the Great Depression. FDR focused on job creation and regulatory institutions to protect the average American from bankers that he deemed were "either incompetent or dishonest in the handling of people's funds." The stimulus plan, in comparison, intends to boost morale of average Americans while buying toxic assets—bonds or derivatives backed by dubiously valued assets from failing banks—and to create long-term initiatives intended to prepare the country to compete on the economic global stage more effectively in the future. Yet this plan's potential is irrelevant if the Obama administration cannot rally the confidence of the American people. The stimulus plan is intended to create or preserve between 800,000 and 3.5 million jobs and cut taxes to the tune of at least $280 billion for individuals and businesses, but it is the plan's long-term initiatives that could most benefit the U.S. by creating conditions that would lead to a vibrant economy and sustainable job creation for the future. These initiatives entail hefty government spending, including investments of $400 million for climate research by NASA, $30 billion to modernize electric grids and provide energy efficiency grants, expansion of Medicaid insurance programs, and even grants and loans for water infrastructure, flood prevention, and environmental clean up (a project whose absence and necessity were glaringly evident in the wake of Hurricane Katrina). While all of these investments are useful and arguably should already have been implemented, the success of the stimulus plan in the future largely depends on how it affects the confidence levels of consumers and the American people now. Programs intended to fight unemployment involve a lag time, and even Obama's administration admits that unemployment levels will rise to eight percent this year. What can be done to raise confidence and comfort consumers? Tax cuts and foreclosure prevention are the most visible actions the government can take to show the American people the tangible effects of this new legislation. A $6.6 billion tax credit for first time home-owners will be raised by $1000 and will not need to be repaid. A $116.2 billion tax credit to workers earning less than $75,000 will result in a credit of up to $400 while married couples making less than $150,000 may receive up to $800. $69.8 billion will be provided to middle-income taxpayers, resulting in an exemption from the alternative minimum tax as well as $5.1 billion providing businesses with a means of deducting costs of investments and equipment from taxable income. In terms of housing relief programs, Obama pledged to use between $50 and $100 billion to combat ongoing foreclosures, a plan which he will unveil on Feb. 18. Citigroup, JPMorgan Chase, Morgan Stanley, Bank of America and Wells Fargo have agreed to a moratorium on foreclosures for three weeks to give the administration time to craft a coherent policy on dealing with these delinquent mortgages. Larry Summers has stated that the administration is looking into reducing monthly payments rather than changing the value of the principle. Yet none of these stimulus programs seems to affect us as college students directly. The only programs truly directed toward us are those designed to tackle the inordinately high costs of a college education. Sadly, many students on this campus have found themselves in a bind when attempting to apply for student loans for next year, as banks have become increasingly conservative in their lending. The programs that will be implemented are a $200 million investment in grants for colleges' work-study programs, a $14 billion Education Tax Credit, as well as a $17.2 billion increase in student aid, which would raise the maximum Pell Grant by nearly $500, to $5350 in 2009. While these may be adequate to fund some college educations, they will have a minimal effect on students like we in Morningside who are attempting to pay off a tuition that exceeds $35,000. As our generation will be the immediate future of the workforce, the government should keep its eye just as focused on our sentiment and trust levels as towards government policy. Let's hope that these meager increases by way of tax refunds and access to loans and grants are strong enough motivators to improve consumer sentiment. If so, there is hope that this comprehensive plan could have the desired effect of revitalizing our economy. If not, it could sink us into an even more dire economic situation in which we have $1 trillion in debt and less confidence in our policy-makers than ever. The author is a Barnard College junior. She is the Director of Foreign Policy for the Roosevelt Institution.

Federal bucks are on their way to West Harlem. Last Friday, the New York City Department of Housing Preservation and Development announced that stimulus funds would be diverted directly to the West Harlem Group Assistance Unity Apartments—one of 10 affordable housing developments throughout the city to receive these dollars. The funds are part of the Tax Credit Assistance Program of the stimulus package, and the WHGA was chosen as one of three units in Manhattan to receive the boost of $339,678. "This TCAP funding is exactly the kind of critical resource the industry needs to help keep projects moving, get ground broken, and put hardworking people into quality affordable housing," HPD Commissioner Rafael Cestero said in a press release. "These new projects will add an additional 600 units of affordable housing and will further strengthen and stabilize the neighborhoods we serve." This marks the second round of funding from the stimulus package for citywide affordable housing, and for WHGA, the funds will be used for the rehabilitation of 17 units, at 60 percent or below the area median income. The Unity Apartments—located on 168 W. 121st St,, 121 W. 133rd St,, and 268 W. 134th St.—fall under the jurisdiction of WHGA, a community-based development committee devoted to revitalizing West Harlem and keeping the area affordable for lower to moderate-income residents. For Melvin Christian, housing chair of Community Board 10 in Harlem, these funds are a welcome stimulus for the West Harlem area. "Any time you can get funds for affordable housing, it's a good thing because of the economic environment right now," Christian said. "The state of affordable housing right now is not very good, and as the West Harlem community continues to grow, the need for affordable housing is greater now than ever," Christian added. He said that while these funds are a decisive step toward creating more affordable housing in the area, "We must continue to explore every avenue there is for keeping housing affordable." HGA and HPD did not return multiple calls for comment.

New York City will receive $80.8 million of the $175 million allocated to the state from the national American Recovery and Reinvestment Act that Congress passed in February, according to a statement released Thursday by the office of U.S. Senator Charles Schumer (D-N.Y.). break Columbia has requested stimulus funds for its $7 billion Manhattanville campus expansion project, which University officials say is expected to proceed as planned despite the recession. The millions in funding announced Thursday is part of the Energy Efficiency and Conservation Block Grant program, which "will provide formula grants for projects that reduce total energy use and fossil fuel emissions, and improve energy efficiency nationwide," the Schumer statement explained. No information was released on the specific programs that will receive funds, but Columbia has touted the environmental aspects of its Manhattanville development plan. The project is a part of the U.S. Green Building Council's "Leadership in Energy and Environmental Design" pilot program and of Mayor Michael Bloomberg's PlaNYC Challenge Partner program, which means Columbia has committed to reduce its greenhouse-gas emissions by 30 percent over the next decade. The University's Manhattanville development Web site states that "environmental stewardship is a cornerstone of Columbia University's commitment to being a responsible member of the community." At a February University Senate meeting, President Lee Bollinger said Columbia was "making a case that part of the stimulus package would be well spent on Manhattanville." "To the extent that funding is appropriately available to Columbia, Columbia has and will continue to seek such funding," Robert Kasdin, executive vice president of the University, said in January. "Columbia is examining the stimulus bill to identify projects that may be helped by the initiative," Kasdin later added. The University also maintains that the expansion will create hundreds of construction and other jobs, and benefit the local economy by creating new storefront spaces for neighborhood businesses. Maggie Astor can be reached at maggie.astor@columbiaspectator.com