The MacNeil/Lehrer Report; Tax Exempt Schools

[Tease]

Pres. RONALD REAGAN [January 19th press conference]: What we have accomplished with what we did was we prevented the IRS from determining national social policy all by itself. It'll now be by elected officials -- the Congress. We'll continue to prohibit tax exemptions for schools that discriminate, and for the first time, that will be the law of the land, and we hope to reserve the rights and liberties of religious schools as long as they don't discriminate.

[Titles]

ROBERT MacNEIL: Good evening. When Congress reconvenes next week, President Reagan wants it to give high priority to a bill denying federal tax exemptions to schools that practice racial discrimination. The President sent the bill up this week to repair the political damage caused by an administrative order reversing the long-standing practice on tax exempt status. The incident brought a storm of criticism around the President's head, including charges that he was knowingly giving comfort to segregationists.The President has hotly denied the charges and offered the new legislation as proof. While hearings were immediately scheduled, and many Congressmen have lined up to support the bill, many predict it will not sail through easily. A major fight is expected over whether the government has to prove discrimination to deny tax exemption, or a school has to prove its innocence. Some politicians predict that the debate will reopen political wounds many people thought long healed.Tonight, racial discrimination and tax exemption. Jim?

JIM LEHRER: Robin, some background chronology is in order first. Since 1970, under the Nixon administration, IRS has withheld tax exempt status from private schools which practice racial discrimination. Meaning such schools had to pay federal income taxes and contributions to them were not tax deductible. This policy was challenged separately in federal court in the mid-seventies by two schools, Bob Jones University in South Carolina, and the Goldsboro Christian Schools in North Carolina, each on grounds their racial policies were dictated by religious beliefs. The schools lost in a lower court so they appealed to the U.S. Supreme Court where, as of January 8th, the two cases were pending. It was on that day the Reagan administration revoked the IRS ruling making the Supreme Court cases moot, and Bob Jones, Goldsboro and similar schools eligible for tax exempt status. This triggered that firestorm of protest which the White House tried unsuccessfully to contain with explanations that were often confusing and contradictory -- the final version coming from Mr. Reagan himself on Tuesday. He said it was all his fault; the original decision was provoked and made by him. He miscalculated its import; now he was proposing legislation to correct it all, legislation that essentially requires the IRS to do what it was already doing -- withholding tax exempt status to private schools which practice racial discrimination -- and which brings us to where we are tonight. Robin?

MacNEIL: The Goldsboro Christian schools Jim mentioned are in North Carolina whose junior senator is Republican John East. Senator, do you support this legislation?

Sen. JOHN EAST: Robin, I have looked at it, and I would have a great deal of difficulty in supporting it. Two particular points about it that trouble me. First is its retroactive provision which in effect would destroy these schools, and we're somewhat back to McCulloch v. Maryland -- the power to tax is the power to destroy. I think that is punitive and excessive, and for that reason alone I would have incredible, great difficulty in supporting it. Secondly, I find it vague in terms of how one would determine what is a discriminatory practice. It's like a lot of things. Sometimes in legislation it sounds good, the ideas are honorable, and etc., etc. But when you get into the practical problem of applying it and implementing it, to me this statute -- somewhat like Title VI has done in the '64 Civil Rights Act -- it's going to be an enormous invitation for bureaucratic involvement in fundamentally private institutions, and it's a bad precedent. And I would have great difficulty in supporting it.

MacNEIL: If one could agree on what was racial discrimination in private schools, would you support the principle of withholding tax exemption -- federal tax exemption from such schools?

Sen. EAST: Well, I don't know that you can ever quite agree on it because, by the time you put it in words and the bureaucracy begins to interpret it, there is a slip between the cup and the lip. Now, in this particular legislation, for example, it isn't clear whether the test of discrimination would be an effects test or an intent test, and that's a critical distinction you would have to make, that you -- in my judgment, to begin to hold water at all, I would want to see an intent test where you had to show the intention to discriminate. You simply couldn't look at the institution and say, "Well, why isn't there this and why isn't there that?" and conclude it has operated in a discriminatory fashion.

MacNEIL: Well, let's take the example of the schools in your state, the Goldsboro Christian schools, one of the parties to the suits that were before the Supreme Court. They, as I understand it, refused to admit black students. Do you think they should enjoy -- does that not qualify as discrimination in your eyes, and do you think they should enjoy tax-exempt status?

Sen. EAST: Well, the problem is, Robin, that a private school, a private institution of this kind -- if you begin to move in and to dictate what kind of particular policy of this sort they must have, to me you've set a precedent. Why wouldn't you apply that then to individuals? If, for example, a wholly private institution is not in a position where it can make choices of that kind, what about individuals?Should a Robin or a John East or anyone else be able to avail themselves to a tax-exempt status, and would they be denied it?

MacNEIL: Can you hear me again?

Sen. EAST: Yes.

MacNEIL: Yeah. Well, I just want to know, do you think the Goldsboro schools do qualify for tax-exempt status?

Sen. EAST: Well, they certainly do under the -- excuse me, we've lost our sound here.

MacNEIL: Oh, I'm sorry.

LEHRER: Go ahead and answer, Senator.

Sen. EAST: All right. Under the change of the IRS's policy which was announced the other day and -- of course they would be allowed to do what they were doing until Congress took some sort of remedial action. And the question is, then, what sort of remedial action should the Congress take?

MacNEIL: Can you hear me now?

Sen. EAST: Yes, I can hear you.

MacNEIL: I just wanted to say, if the Congress does not pass this bill with the IRS situation the way it was after January the 8th, would that not be an invitation to many schools who have been reluctant to apply for tax-exempt status to now apply, and thereby encourage further racial discrimination in many schools?

Sen. EAST: Well, I suppose it's the old problem in any sort of law or public policy: what is the tradeoff? Now, the great, vast majority of these schools do not by choice operate in a discriminatory -- do not operate in a discriminatory fashion. And, to me, in a free society you finally reach the point where you have to allow some sort of private, individual choice, even if on occasion that choice is contrary to your own values and beliefs. And where institutions or individuals make choices of this kind that may not be what I would prefer or what you would prefer or what others might prefer, I think we have to accept that in a free society. And in these cases, where there are a limited number of schools that may, upon religious grounds, find it repugnant to have an admissions policy of that kind, to me it could be -- it would be a greater evil to simply invite the entire federal bureaucracy and the IRS to begin to move in and to intrude into these areas and to begin to manipulate tax policy in order to get some sort of desired social end. We've been through that sort of experimentation extensively with Title VI of the 1964 Civil Rights Act; it has created an enormous amount of havoc in our public schools in terms of the busing consequences, and you get back to this fundamental problem of who is going to decide what is a nondiscriminatory program. It's the precedent that is inviting extensive government intrusion I cannot accept.

MacNEIL: Okay. Well, thank you. Jim?

LEHRER: A different perspective now from a different Republican senator. He's Senator Charles "Mac" Mathias of Maryland. Senator, are you going to support this new legislation?

Sen. CHARLES MATHIAS: Let me say that I welcomed the introduction of the bill because it was rather refreshing to see a public official, let alone a president of the United States, admit that he had made a mistake -- admit that there had been a goof in the administration. And by sending the legislation to the Hill, President Reagan is trying to undo the damage that has been done. Now, the Congress is going to look at this very carefully, and we are seeing, just as this discussion tonight will show, what a complex subject this is. And I think that the hearings that the Finance Committee will hold in the Senate and all the hearings in the House will indicate that the course of wisdom may be to adopt a resolution which affirms the state of the law as we all thought it was on New Year's Day, 1982.

LEHRER: And you would support that?

Sen. MATHIAS: And I think that's really where we want to get back to.

LEHRER: Do you believe, then, that schools that discriminate on racial grounds should not be allowed a tax-exempt status?

Sen. MATHIAS: Oh, of course they should not.

LEHRER: What about what Senator East -- do you share his concern, for instance, on the intent test? That if you pass such a law there would be real problems on who was going to decide --

Sen. MATHIAS: We haven't had a lot of trouble in the last 10 years since the court rulings and the Nixon administration's rulings. This has been the law. We have lived with it for 10 years. Where there were some objections they have been worked out. Obviously not everybody's been happy with it, but very few people are happy with tax laws and their applications.

LEHRER: What about Senator East's argument that in a free society, when you have private organizations, all right, they sometimes might do things that you wouldn't like, but they should be allowed to because to get the government involved would be worse?

Sen. MATHIAS: Well, I would have to disagree with that because you're talking now not about doing what you want, you're talking about who is going to pay for it. And if you're going to allow people to be relieved of their share of taxation in the course of doing what they want to do, which is violative of the basic principles of the country, then you're not only violating those principles, but you're putting a greater burden of taxation on everybody else who is living up to those principles. So I just think that if you talk about a free society that doesn't mean a free ride for people who are violating our most fundamental precepts.

LEHRER: So, in other words, if the Goldsboro school chooses not to admit blacks as a matter of policy, that's fine, but they shouldn't get a taxpayer break on taxes?

Sen. MATHIAS: It isn't fine, but they certainly should not get a tax break for doing it.

LEHRER: Do you think this bill is going to pass the Congress?

Sen. MATHIAS: I would suspect some kind of a declaratory resolution may pass just to clear the air.

LEHRER: But not a law itself --

Sen. MATHIAS: I'm not sure that we need to -- you know, the last thing we need in this country are more laws. We've got a lot now. And if we can simply say that the law as everybody thought it was was the right law, that's enough; we don't have to pass a whole new statute.

LEHRER: You said at the beginning that the President did admit he made a mistake. I take from what you said that you share that feeling, that the President made a serious error in this. Is that correct?

Sen. MATHIAS: Well, I think that a mistake was made, as I think the President in his press conference said it hadn't been handled as well as it should have. Obviously, there hadn't been a careful consideration of the numerous court decisions, of the long history of this issue, of the fact that the Nixon administration issued its orders to the Treasury Department, to the Internal Revenue Service, only after there had been judicial decisions on the subject. So it's not -- it wasn't just some bureaucrat's flight of fancy that all of this came about; it was a carefully considered judgment of serious people operating through our legal process.

LEHRER: Thank you. Robin?

MacNEIL: One of the two schools which were appealing their non-tax-exempt status to the Supreme Court was Bob Jones University in Greenville, South Carolina, a 54-year-old fundamentalist Christian school. Its current president is Bob Jones III, grandson of the founder and himself a fundamentalist preacher. Mr. Jones, your university does admit blacks, is that right?

BOB JONES: That's correct, Robin.

MacNEIL: But, as I understand it, for your religious reasons it forbids dating and marriage between the races. Is that correct?

Mr. JONES: That's correct.

MacNEIL: Can you explain briefly why you do that?

Mr. JONES: Yes, without becoming tedious and involving something that doesn't concern most people, let me say that all of our rules as a Christian institution are based upon those rules which are designed to develop Christian character -- are based upon what we believe the Bible teaches. That's why we don't allow our students to drink or to cohabit between the sexes, etc., etc. This is one of our rules. Whether our rules are right or wrong, whether they are held by most Christians or not is really not the issue. Our rules have never been on trial. The fundamental issue at stake here is, does a religious institution have the right in a pluralistic society, whose most basic freedom is the cherished freedom of religion, do we have the right to hold those religious views and practice them without the punitive arm of government coming down upon our heads?

MacNEIL: Or, if they -- to use Senator Mathias' word -- violate the sort of fundamental principles of the democracy and, in this case, by being seen by many people to be racially discriminatory?

Mr. JONES: I can hardly believe what I was hearing from the Senator in that regard. What is the most basic right? I always thought this was a country where the rights of the individual were important, where those rights were protected by non-discriminatory laws. For 11 years the IRS has been discriminating against Bob Jones University and admittedly, after the 8th of January, illegally. I have heard nobody complain in the media or elsewhere that Bob Jones University was singled out by the IRS for harassment because of its religious beliefs. And now there's a bill that's come from the administration whose very wording in some points is directed specifically at Bob Jones University -- the retroactivity point that Senator East referred to as one of the things I'm talking about.

MacNEIL: Because, in fact -- you told me just before the program you have not, in fact, for the years while this has been under dispute, been paying the taxes that you might have to pay if the law went through?

Mr. JONES: Yes, that's correct. But why has the federal government singled out an institution that is simply trying to train Christians and mind its own business and doesn't receive one dime from the federal government -- we've never accepted federal aid -- why do they come down on us like this? That is discriminatory.

MacNEIL: Can I ask you a simple question? Do you regard your practice of forbidding dating between blacks and whites as racial discrimination?

Mr. JONES: In no way. In no way. My answer to that is, who are we discriminating against? Are we discriminating against whites when we tell them they must date within their own race? If we said to the whites and Orientals, "You may date each other but the blacks can't do what the rest of you do," then we would be discriminatory. There is no basis for what the government has done. It's a part -- as I see -- the Bob Jones University is sort of at the focal point of fundamental Bible Christianity -- old time religion in America. It's the remnant of that.

MacNEIL: And you think that that qualifies you for tax-exempt status?

Mr. JONES: Yes. The 501(c)-3 section of the Internal Revenue Code as established by Congress says religion is tax exempt. It doesn't say "acceptable religion." And if it starts to decide what is acceptable and what isn't, then where does it stop? Does it eventually tell the Catholics, "You cannot have women -- you cannot disbar women from coming to your seminaries to be priests since that's a fundamental part of your religion?" Does it tell the Jews, "You can no longer" -- the Orthodox Jews -- "you can no longer insist the women sit on one side of the church and the men on the other?" There is no end to this when the government starts to dictate religion.

MacNEIL: Well, thank you. Jim?

LEHRER: We go finally to another ordained minister who sees it all very differently than Mr. Jones. He is Benjamin Hooks, a Baptist minister who is also the executive director of the NAACP, the National Association for the Advancement of Colored People, the largest civil rights organization in the country. Mr. Hooks, is what Bob Jones University is doing racial discrimination?

BENJAMIN HOOKS: Yes, it is. And because it is racial discrimination, I think that the IRS was correct in denying them tax-exempt status.

LEHRER: What do you think of Mr. Jones' argument about religious beliefs, that it's part of their religious beliefs?

Mr. HOOKS: Well, I think it's just altogether wrong, and he said it himself. He said suppose that the government decided to deal with religious beliefs. They've already done it. There were -- you know, in the name of religion more bizarre and unusual things have been done -- and I'm a practicing Baptist minister, and I believe fervently in religious freedom, but it has been limited. There were people who believed in polygamy -- having more than one wife. Now let us say that someone proposed that now. The law would make it very clear: you can't do that in America. There are religions that believe in stoning people. We see it in Iran. If caught in adultery you can be put in a hole and stoned to death. Let somebody try that in America in the name of religious freedom. Jim Jones, big preacher down in Guyana, caused hundreds of people to commit suicide. Let us suppose that happened in North Carolina, in Goldsboro, and Jim Jones' defense would be, "In my religion we believe in that." And see if that would have been a defense in court. There are those who handle snakes and deadly poison. But suppose a religious organization said, "You must handle this; you must drink this deadly poison; you must take these snakes and use them," and someone is killed and a court trial is held on murder, you could not argue religious freedom. Now, I know that they're going to say, "That's extreme," but it's not extreme. There are sects that have practiced that in this country in years gone by. And this nation has already decided that there are some religious things that you simply cannot do in this democracy in the name of religion. And discrimination has been another form of human sacrifice. There are religions in history, and there may be some now for all that we know, that have practiced human sacrifice. You sacrifice somebody to your god. You put them on the altar and you tell them they are privileged characters to have their lives destroyed in the name of religion. These things have happened; they can happen again. And it is ridiculous to think that in America we have not already decided, by common consent more or less, that there are certain things you cannot do in the name of religion; you cannot get by with them. And, as far as I'm concerned as a practicing minister, I do not regret the fact that some of these extreme and bizarre practices are not allowed under the Constitution of the United States of America. And yet we preserve religious freedom.

LEHRER: Mr. Jones says that what he is doing, what their policy is, is not racial discrimination because, he said, it bars interracial marriage, but it doesn't discriminate specifically against blacks or whatever. It bars racial intermarriage altogether.

Mr. HOOKS: Well, to accept that would be to blind your eyes to 300 years of history. That argument was made about water fountains -- said that, "This water fountain is for blacks, what are you arguing about? This water fountain is for whites. This restroom is for whites; this is for blacks. These hotels are private." I think that when I hear Senator East I get a little funny feeling because that was the same argument advanced about hotel accommodations and cafes -- "these are privately owned things, why should blacks come here to eat if we don't want them to eat?" And if you say that you had these private institutions that can do what they want to do, you're right back into segregation, which I thought we had left. The answer was obvious: that the truth of the matter is that 300 years of history indicates that the ban on interracial marriage, on interracial dating -- the reason that you had these separate water fountains was not to punish whites, but to keep blacks in a certain place. That is history and you cannot deny the intent of it, as the Reagan administration wants to talk about intent, nor can you deny the effect of it, which is the practical result of what happened. So that we understand very well what is happening, and we also have to remember -- Senator Mathias pointed out that the Nixon administration did not issue these IRS regulations until a permanent injunction had been issued against IRS from issuing tax-exempt certificates to any school in the state of Mississippi. If the IRS, in spite of Mr. Reagan, tried to do that, they would be in contempt of court.There was also a declaratory judgment in it at the same time making it a nationwide application. It was in response to a coequal branch of the government that the Nixon administration had the IRS to promulgate those rules. Let me say one other thing quickly -- that the IRS promulgates thousands of rules in order to carry out the intent of Congress.If Mr. Reagan is really serious about making Congress act on every one of them, the Congress would be busy for the next 10 years trying to enact a law to carry out the intent that the IRS has found within the meaning of the law.

LEHRER: Thank you, Robin?

MacNEIL: Mr. Jones, Mr. Hooks says that it doesn't violate the freedom of religion in this country for the country to limit some things that can be done in the name of religion.

Mr. JONES: Well, nobody in his right mind would condone what James Jones did or offering of human sacrifice or these other very far-fetched examples that we just heard given. We're not talking about a religious conviction that impairs anybody's life or limb. What we are talking about is whether the Congress is going to pass a bill that will establish religion according to Benjamin Hooks or religion according to the Bible. It's that simple.

MacNEIL: I see. Do you see this as a matter of religious freedom, Senator East?

Sen. EAST: To an extent it is, yes, but it's more fundamentally, at this stage in the legal debate, first and foremost, who ought to be making the decision. And I would agree that the Congress ought to be making it, as opposed to the IRS. I do agree with the original administration's decision, that the IRS simply should not have been making this decision. It didn't have the authority or the power to do it. Congress had never given it to it; the courts had not given it to it. It was simply doing it on its own initiative --

MacNEIL: What about the court cases that have just been cited by Senator Mathias and Mr. Hooks?

Sen. EAST: Well, I would contend that there is not -- there is not convincing or definitive court authority, that Title VI of the 1964 Civil Rights Act would encompass the tax-exempt situation. This was one spun out of whole cloth by the IRS. And I do agree with the administration that if we want a policy that will deal with tax exemption as regards racial discrimination, the Congress ought to bite the bullet and do something about it.

Mr. HOOKS: Well, let me just say I was referring to the Green v. Connally case, which was a federal case decided by a three-judge federal court in 1970, in which a permanent injunction was issued against the Internal Revenue Service prohibiting them from granting tax-exempt status to any school in Mississippi because the case arose in Mississippi. I'm not talking about Title VI of the Civil Rights Act, even though I believe that does give the authority. I'm talking about a specific court case which was affirmed by the United States Supreme Court.

MacNEIL: Mr. Jones?

Mr. JONES: I believe Mr. Hooks, as I understand that case, it had nothing to do with religion, and all we're talking about here is the protection of religious freedom without religion having to go through the sieve of government censorship and becoming subversive to the Congress or to any other agency of government.That is intolerable and an abuse of foundational First Amendment freedoms.

MacNEIL: Let me ask Senator Mathias about that. He hasn't come back. Do you want to respond to that, Senator?

Sen. MATHIAS: Yes, I do because I think there is a basic misconception here about what we protect under the First Amendment. We provide an absolute protection for religious belief. But there is no prohibition against the regulation of religious conduct and that is why, when the state of Utah was admitted to the Union, the practice of polygamy was prohibited. That was a regulation of a practice which was supported by religious belief by serious people, but we simply said we're not going to permit it. And the First Amendment was not held to prevail against that regulation. Now, where there are religious practices that violate the ethic of our society, then those religious practices clearly can be regulated. You can believe anything. You can believe anything and you cannot be restricted in your belief.

MacNEIL: We have time for a final word here. Do you -- very briefly.

Mr. JONES: Yes, Mr. Mathias, I don't think there's anybody in the country who wants to have their religious freedoms decided upon by you or by anybody else in Congress. As long as the religion is not harming anybody's life or limb, there is no reason that Congress should step in and make a determination of what religion is going to be taxed and what isn't going to be taxed. And that is not the prerogative of Congress.

Sen. MATHIAS: But who's to judge what is harmful?

MacNEIL: We, I'm afraid, are out of time there, Gentlemen. I'm sure this is an issue we're going to be coming back to. Senator East, Senator Mathias, Mr. Hooks, Mr. Jones, thank you all for joining us this evening. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That's all for tonight. We will be back tomorrow night. I'm Robert MacNeil. Good night.