Bill Overview
Title: Protecting Endowments from Our Adversaries Act
Description: This bill imposes an excise tax equal to 50% of the fair market values of certain investments made by private colleges and universities with assets or endowments exceeding $1 billion. It also taxes 100% of the net income of such investments held during a one-year period. These investments are in certain foreign persons or entities (e.g., Chinese or Russian companies) that are included on lists maintained by the Department of Commerce and the Federal Communications Commission that identify persons or entities engaged in human rights abuses or that pose a threat to U.S. national security.
Sponsors: Rep. Murphy, Gregory [R-NC-3]
Target Audience
Population: people involved with private colleges and universities with endowments exceeding $1 billion
Estimated Size: 6000000
- The bill targets private colleges and universities with endowments exceeding $1 billion.
- There are approximately 40-50 private U.S. colleges and universities with endowments larger than $1 billion.
- The staff and faculty employed by these institutions, totaling in the hundreds of thousands, may be indirectly impacted by shifts in university funding.
- Students attending these colleges and universities, numbering in the millions over time, could be affected through changes in tuition fees or financial aid.
- Foreign investments by these institutions are specifically targeted if they involve certain entities from adversaries like China or Russia.
- Changes in how these colleges and universities manage their investments could have downstream effects on international academic collaborations or research funding.
Reasoning
- The policy would directly impact universities with endowments over $1 billion which could shift investment strategies or reduce financial resources available to them.
- Indirectly, faculty and staff at these institutions might be affected if funding decisions alter; though the impact would spread gradually.
- Students attend these institutions, and changes in financial aid or tuition costs due to altered investment incomes might reduce their personal finances or increase their debt loads.
- Investment changes may influence the flow of research funding, potentially impacting research quality or innovation at affected universities.
- Partnerships or collaborations with foreign entities on the restricted list may be curtailed, influencing international academic relations.
- The endowments' involvement in specific foreign markets or industries listed by the policy implies high-level financial decision implications.
Simulated Interviews
College Professor (Boston, MA)
Age: 34 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I think the policy is fair if it's about protecting national interests, but there should be some allowances for collaborative international research.
- I'm concerned about how funding changes could affect my lab and the collaborative projects we've been developing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
University Administrator (Los Angeles, CA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 2/20
Statement of Opinion:
- The policy could potentially limit the financial flexibility we have in driving projects and funding.
- However, it might force us to rethink our investment strategies, potentially for the better.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Student (Chicago, IL)
Age: 22 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I'm worried that financial aid might decrease or tuition could increase because of funding issues due to this policy.
- It's important that college remains accessible and we don't create more barriers for low-income students.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Financial Analyst in Education Sector (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy will likely make some university investment strategies risk-averse, reducing potential gains.
- It may stabilize investments over time, but also implicitly restricts market opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Federal Policy Advisor (Washington, D.C.)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 1/20
Statement of Opinion:
- Ensuring investments align with national security interests is crucial, but the policy's financial implications need balancing.
- It could become a model for other reforms, mapping national security onto different economic areas.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Research Scientist (Houston, TX)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- If collaborative ventures are cut because of restricted investment sources, we might lose valuable research.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
Graduate Student (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Future research opportunities might be getting more limited if partnerships are cut due to policy restrictions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Philanthropist (Philadelphia, PA)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- I am supportive of safeguarding endowments, but it could increase pressure on philanthropy to backfill any funding gaps created by restrictions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Retired Professor (San Francisco, CA)
Age: 65 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 2/20
Statement of Opinion:
- Prudent investment strategies are essential, but these constraints might cause over-conservative management that miss broader growth opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Researcher (New Haven, CT)
Age: 39 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Research ecosystems thrive on global collaboration which could be strained if funding sources shrink.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $5000000 (Low: $3000000, High: $7000000)
Year 3: $5000000 (Low: $3000000, High: $7000000)
Year 5: $5000000 (Low: $3000000, High: $7000000)
Year 10: $5000000 (Low: $3000000, High: $7000000)
Year 100: $5000000 (Low: $3000000, High: $7000000)
Key Considerations
- The ability of universities to restructure their investment portfolios could mitigate the bill's impact.
- International relations might be affected, influencing academic collaborations between U.S. institutions and foreign entities.
- An overall review of foreign investment regulations is crucial to ensure the policy's alignment with broader economic and national security objectives.