Karen Paget

Karen M. Paget, a frequent foundation consultant, is currently a Soros Open Society Institute fellow. She has consulted on state and local fiscal issues for the Ford Foundation and the Twentieth Century Fund. She is the author of "The Battle for the States," in The New Majority.

Recent Articles

The Balanced Budget Trap

Absolute budget balance has become orthodoxy; a constitutional amendment to enforce it may pass Congress even if Democrats win the elections. But look at the costs.

P opular wisdom has it that the Contract with America is defunct, killed by the excesses of Newt Gingrich and his extremist band of Republican freshmen. The Contract is certainly dead as a campaign manifesto, but its single most damaging provision is lethally alive. The balanced budget amendment failed the Senate by only one vote in March 1995, and two votes in June 1996. Earlier, in 1995, it passed easily in the House of Representatives (300 to 116). A return engagement is likely after the November election. Even if Democrats pick up seats, the amendment could pass, because many Democratic candidates have felt the need to embrace budget balance as "cover" to insulate themselves from the tax-and-spend label. In January, we could well encounter a Congress more Democratic—yet more likely to approve an amendment crippling to an activist view of government. Normally, the ratification process, which requires 38 states to concur, would slow any ill-considered amendment. However, in the case...

The Big Chill

Has the right’s campaign to “defund the left” intimidated large foundations? In fact, tax-exempt organizations of all kinds have far more latitude to promote social change than many of them realize.

Starting a new organization? You will very likely apply for a tax exemption from the IRS in order to attract foundation grants and gifts from individual donors. This decision, of course, has fateful consequences, especially for organizations devoted to social or political change. Accepting foundation funding means that you will have to limit your tactics and serve the foundation's goals as well as your own—and the foundation may also be looking over its shoulder at the IRS and Congress. Since most activist organizations are promoting changes that are, broadly speaking, political—changing public policies, political resources, and the very rules of the game—tax-exempt status tends to cramp their style. In one sense, this constraint seems only fair; other taxpayers should not be subsidizing, via tax exemption, groups whose goals they do not share. Yet what precisely is political? In reality the IRS gives nonprofit organizations wider latitude than many appreciate. Nonprofits that are tax...

The Roots of Rage

Blowback: The Cost and Consequences of the American Empire , by Chalmers Johnson. Metropolitan Books, Henry Holt and Company, 288 pages, $15.00 (paper). Americans around the world are targets of terrorist attacks. Not just soldiers such as those killed on the USS Cole in Yemen this fall, but civilians, as well. Last year the State Department issued an unprecedented general warning for Americans abroad--anyone, anywhere--to be alert to the threat of anti-American violence. Yet citizens and commentators alike seemed to take the advisory in stride. No one asked, at the end of "the American Century," why we might be in such danger. University of California political science professor (now emeritus) Chalmers Johnson has an explanation. United States government policies and practices begun during the Cold War, and continuing to this day, are largely responsible. And the American people are mostly unaware of what we are doing in the world, "since so much of this...

Diversity at Berkeley: Demagoguery or Demography?

The case for Cal’s admissions policy, designed to mirror the state’s population.

The director of a large California foundation once told me that his work had become easier now that his board members understood cultural diversity "as a demographic fact and not a liberal plot." His optimism was premature. In the past year a full-blown conservative reaction, exemplified by Dinesh D'Souza's Illiberal Education, has depicted the new claims of ethnic pluralism precisely as a liberal or radical plot. In its most mechanical form, the conservative argument pictures elite colleges as admitting unqualified students through affirmative action. These students, once there, lower standards, frustrate faculty, and develop an ideology of cultural separatism to justify their own incompetence. The demand for more representative or non-traditional curricula is one more, mostly illegitimate, offshoot of their presence on campus. Affirmative action is thus the source of a new and sinister ideology called "multiculturalism," which undermines not only higher education but also the very...

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