The federal budget unveiled by President Obama last week is nothing short of breathtaking. With it, the President is truly delivering us “change we can believe in.”
The budget is already garnering praise from progressives around the country as one of the most progressive pieces of legislation in decades. It is a true testament to what makes progressive governance so exciting – shifting the tax burden off the working class and onto the wealthy, making a down payment for universal health care, dramatically expanding programs in education, creating cap-and-trade standards for carbon emissions and more.
The budget is going to continue being debated, of course, and may see major changes to come. It may not even pass. President Obama has offered us an important reminder of the power of budgets to shape the future. President Obama’s plan shows us that budgets can be things of vision, things of hope and possibility.
Yet, as the discussions of Yale’s budget by President Levin and other administrators made clear last week, budgets can force difficult choices, as the University moves to respond to decreased revenues with layoffs and caps on raises. What troubles me, however, is the ready acceptance of the need for such drastic cuts.
Why does there seem to be such a consensus that cutting staff and their raises is the necessary response to these hard times? While the logic of budget cuts in staffing can sound inevitable, it actually is not. It is a particular choice the University is making.
It reflects, for one thing, an allegiance to running an institution primarily through the revenue held in the endowment, yet doing so in a way that ensures that most of that money never gets spent. After all, we are repeatedly told that these cuts have been largely prompted by the dramatic losses of the endowment, which is projected to have lost at least 25 percent of its value this academic year. Yet, by the University’s estimates, this still leaves us with $17 billion to spare.
So what is the point of having such a large endowment if, in times of crisis, it does not actually help everyone in our university community weather the storm? A recent article by Peter Coy in BusinessWeek made this point: “The most frequent argument for having a big endowment is that it’s supposed to tide schools over tough times. It sure isn’t working out that way. True endowment funds can’t be spent even in an emergency; only the cash income and capital gains from them can be spent.”
I understand that current measures are being taken, in part, so that the endowment will remain as large as possible by the currently hard-to-foresee end of the crisis and hopefully grow again. Yale as an institution will still be here. But what about the lives of those who lose their jobs in the process?
Might it not be worth earning a little less on the endowment in the future if it means keeping our community strong and layoff free? And meanwhile, shouldn’t top administrators be sharing some sacrifices as well, as those at Yale’s peer institutions have done, by freezing or even foregoing parts of their salaries?
What’s most troubling about all of these cuts is that news keeps trickling out that more and more measures will have to be taken. First, we were told in December that the University would avoid layoffs; now we are told layoffs are inevitable because the economic forecast has become much worse – yet many in December were already anticipating that the economy would not simply “pick up” again for quite some time.
Thus it’s not even just this round of budget cuts, the full scope of which remains unknown, that should have us worried, but the ones in years to come as well. It seems urgent for us to reconsider and challenge the inevitability of these staffing cuts if we are to prevent more devastating ones in the future.
President Obama is willing to stand up for his vision of the budget. Will we be willing to stand up for our own, too?
Hugh Baran is a senior in Davenport College.