Former US Treasury Secretary Lawrence Summers Talks Harvard Reform
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Bloomberg Audio Studios. Podcasts, radio, news. You've spent much of your career when you were in Washington as a professor at Harvard and then as president of Harvard as well. So we want to ask you about this letter that came in on Friday from the United States government. I've read the letter carefully. Set aside for the moment some of the things that some people find draconian. Does the Trump administration have a point, particularly with respect to dealing with anti-Semitism and diversity of viewpoint? Those are things you have spoken out on before.

David, I've been sharply critical of Harvard and I continue to be critical on many dimensions. Anti-Semitism is still not responded to strongly enough. There are still excesses of identity politics. There's still concerns about intellectual diversity. That's all right. But here's the thing. In America, you have to follow the law.

And the approach the Trump administration is taking of simply announcing an across-the-board freeze is wildly extra-terrifying.

legal in its approach. It is not at all consistent with the Civil Rights Act. It is probably not consistent with Harvard's First Amendment rights. And so the right thing to do was surely for Harvard to respond vigorously and strongly.

All the more because this is not an isolated thing, what's being done to Harvard. This is not a manifestation of a particular concern about aspects of universities. This is a part of a broad and sweeping effort to suppress institutions that challenge the presidential administration.

It's part of what's being done to law firms. It's part of what's being done to countries. It's part of what's being done to judges. It's part of what's being done to legal residents of our country. And if an institution like Harvard cannot resist tyranny when applied to it,

with Harvard's $50 billion endowment, with all its network, with all its prestige, then who can? So Harvard should not go interjecting itself into politics. But God, when it is the object of an extra legal set of orders and threats,

I don't think it had any viable choice at all but to respond strongly. Larry, let's talk about that extra legal part of what you're saying. Elise Stefanik, the representative Republican from New York, actually gave an interview today on Arrival Network saying, listen, colleges like Harvard don't have a right to money from the government. They don't have a right to taxpayer money. And if they don't have a right to the taxpayer money, can't the government put conditions on that money?

So here's the thing. First of all, the money is not going. It's not like the government's funding the DEI office at Harvard. It's not like the government is funding the student discipline mechanism at Harvard. The government is funding researchers who are doing vitally important research on diseases like diabetes and cancer and ALS. So fundamentally,

What sense does it make to cut their funding off because somebody doesn't like what the associate dean of students did in a student discipline case? And what remit does the government have to set as a condition

the composition which beliefs are valued and which beliefs are not valued in the Harvard sociology department. That's not the way free speech works in a free society. And this is supposed to be done, the power of the purse, remember, by Congress. It is not the prerogative of the executive branch.

with three days notice, with no hearing, no judicial review, no transparent notification to Congress as mandated by statute, to simply indiscriminately start cutting off previously promised and committed funds because it has a disagreement over an issue.

with the university. So Larry, give us a sense of what, as a practical matter, this will mean if it continues through. You ran Harvard at one point. You know the budget. You know that $53 billion endowment there. What will it do to their operations? Look, they'll have to make some very important strategic choices.

I hope that the university will find ways, even if there is a cutoff for some interval of funds, to maintain vitally important programs, to not cut back research. But potentially, if the U.S. government goes to war with our great universities, it means that

a sharp reduction in the kind of scientific progress that has caused the United States to be the envy of the world and pull so far ahead of Europe and Japan. It means the end of efforts at cures to diseases like cancer and diabetes. It means a substantial risk

to our national security because one of our great national assets has been our capacity for innovation, which resides very heavily in our leading academic institutions. So a

A short-run problem, I think that can be managed painfully until the judiciary steps in and does what's necessary. A long-run war against the universities, that is going after what is our hugest asset.

You know, if I think about all the different sectors of the economy, it's hard to think of one where we are as dominant as in higher education.

All the students from all over the world, at least until this administration came, wanted to come to the United States. A vast fraction of the world's innovation takes place in American universities. If we put that at risk, we are making, I believe, a very, very grave mistake.

Larry, I... Yes, these issues should be pursued, but destroying medical research grants because you don't think people have been disciplined severely enough, it really doesn't make any sense. Larry, I wonder if there's a cautionary tale here that maybe the higher education system has become too intertwined with the government. That's why they're so dependent upon them. There may be questions that can be asked of that kind, but, gosh...

If the government is not prepared to fund basic research, the research which ultimately will make possible the development of new products, I think we have a problem. If the government is not prepared to fund scholarships that promote opportunity for our poorest students who are very able and generate social mobility, I think we have a problem.

I think what we need, frankly, is a more mature relationship between the government, the broader society and the universities. Yes, the universities have made some very serious mistakes. And yes, they should be pressured and pressured with escalating strength.

to change that. I didn't even have an objection to the way in which the Biden administration opened civil rights cases with respect to a variety of universities and anti-Semitism. But that's a very different thing.

than the kind of persecution that is involved here. And this escalated yesterday, David, in a profoundly troubling way when the president of the United States, endeavored by social media,

to engage in an individual specific tax matter, namely Harvard's 501c3 deduction, and to suggest that it be decided on the basis of a political ground.

That's the kind of interference with the IRS that it's a sacred duty of the Treasury Secretary to resist.

It's exactly what was alleged to have happened six levels down. And many people got very upset in connection with the so-called Lois Lerner case involving 501C3 deductions and conservative groups. If there was punishment of conservative groups,

People were absolutely right to have been hugely outraged about it during the Biden administration. I don't know anything about the merits of the case. But for the president of the United States to be calling for changing the tax status of his adversaries, this is new and I believe authoritarian and

and a real question about our democracy. Larry, one last question. Since we're on taxes and this is tax week, basically, what do you make of the actions that the Trump administration is taking with respect to the IRS? I think it's possible that the Treasury Secretary and his senior colleagues are being seriously delinquent in their duty.

I look at tens of thousands of people being pushed out of the IRS, even as tax compliance is a massive problem. And here's so many stories of increased tax cheating as a consequence.

I see the elevation of a person with no experience, no administrative or information technology experience to be the temporary commissioner of the IRS chosen on the basis of political loyalty to the Trump enterprise.

I look at what are probably the extra lawful agreements entered into without even speaking to people at the IRS with respect to information sharing and immigration. I look at the president's involvement in specific cases.

And I see the most important line that I thought I was supposed to defend when I was Treasury Secretary, apolitical tax enforcement.

neutral, professional tax enforcement, not driven by politics. And I see that line being crossed with the Treasury Department cheering it on. And it makes me both very sad and very angry.

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