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76 No. 31 USPS 045360 20 Pages
College Station, Texas
Wednesday, October 13, 1982
Bonfire logs
staff photo by Robert Snider
Senior Head Stack Mike Gotten (far left)
from Orange Tx. is walking off log feet
as three Junior Red Pots (left to right)
Craig Barker, Jeff Tunnel, Albert Eby survey
the surrounding grounds in preparation
for Bonfire.
Court to consider
IRS taxing limits
United Press International
WASHINGTON — The limits of
the Internal Revenue Service’s power
over tax exemptions may be the key
issue that emerges from a Supreme
Court case involving two racially dis
criminatory religious schools.
Lawyers for two fundamentalist
institutions, backed by the Reagan
administration, told the court Tues
day the IRS overstepped its authority
in denying tax-exempt status to
schools that practice racial discrimi
nation.
During the debate that drew a
capacity crowd, a civil-rights lawyer
charged granting tax exemptions to
racially biased institutions is tanta
mount to giving them federal grants.
The court is expected to decide by
early next year whether Bob Jones
University, of Greenville, S.C, and the
Goldsboro (NV.C.) Christian Schools
should enjoy such tax exemptions.
“Tax credits and tax exemptions
stand on the same footing as direct
grants to an institution,” asserted Wil
liam T. Coleman, chairman of the
NAACP Legal Defense and Educa
tion Fund.
Coleman argued Congress has, in
effect, ratified the IRS decision to
deny the schools tax exemption, since
lawmakers have specifically avoided
amending the law — despite ample
opportunity in recent years.
But Goldsboro attorney William
McNairy contended, “These are poli
tical questions that have been allo
cated to the Congress. Any change in
qualifications (for tax exemptions)
must come from Congress.”
The reasoning is the same voiced
by the Reagan adminsitration, which
heated up the dispute last January by
reversing a 12-year-old IRS policy of
denying tax breaks to private schools
that discriminate because of race.
The often-tedious discussion be
fore the high court bench focused on
techinical points of law until tw'o jus
tices began wondering aloud just how
far IRS authority extends.
Justice Lewis Powell asked Cole
man whether tax exemptions could
be denied if an institution practices
sex discrimination, rather than racial
bias.
“We didn’t fight a war over sex
discrimination,” Coleman said, in a
reference to the Civil War.
Powell also wondered whether the
IRS has the power to deny tax-
exempt status to pacifist groups that
oppose the nation’s defense policies.
“We do make exceptions for pacif
ists, even in wartime,” Coleman
answered.
Justice Sandra O’Conner asked
Coleman if the IRS could deny ex
emptions to a church that practices
discrimination.
“The rules governing a church are
different than the rules governing a
school,” he replied.
The controversy was taken to the
Supreme Court By Bob Jones and
Goldsboro Christian Schools after
they lost their fight for tax exemp
tions in the federal appeals court in
Richmond, Va.
Bob Jones barred black students
until 1971. Although it now admits
students of any race, it still prohibits
interracial dating. Blacks still are bar
red from Goldsboro.
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2
Arafat meets with Hussein Soaring stock market
on Palestinian federation draws cheers, doubts
United Press International
Palestinian leader Yasser Arafat
declared he and Jordan’s King Hus
sein — once mortal enemies — are
“brothers in blood” with the same
ideas on solving the Middle East di
lemma, reportedly with a Palestinian-
Jordanian federation.
The talks are the first substantive
discussions in 12 years between Ara
fat and Hussein — key brokers in
President Reagan’s plan for Palesti
nian self-rule in association with Jor
dan in the Israeli-occupied West
Bank and Gaza Strip.
“We have the same viewpoints for
the same aims and the same destiny,”
Arafat said in Jordan Monday, while
addressing the Badr brigades of the
Palestine Liberation Army under the
command of King Hussein.
“The Palestinians and Jordanians
have always been brothers in blood,”
Arafat, chairman of the Palestine
Liberation Organization, said after
three rounds of crucial talks with the
Jordanian monarch.
“We are seeking to coordinate the
future steps of our struggle, which
will not stop until the Palestinian flag
is flown over Jerusalem,” said Arafat,
who arrived in Amman Saturday.
The friendly statements marked a
bizarre twist to a bitter feud begun
when Hussein’s army drove 100,000
Palestinians from Jordan and killed
10,000 more in the “Black Septem
ber” massacres of 1970.
Hussein invited Arafat Sept. 20 to
help formulate a blueprint for a
Palestinian-Jordanian federation.
But the two men, reconciled in 1979,
failed to disclose details of the talks.
Arab sources, however, suggested
the federation concept was in line
with Reagan’s proposals.
In Beirut, special Jordanian envoy
Ali Ghandour Monday delivered a
private letter to President Amin
Gemayel at the presidential palace at
Baabda east of the capital, but
Lebanese officials declined to reveal
its contents.
U.S. special envoy Morris Draper
and U.S. Ambassador Robert Dillon
were meeting with Lebanese Foreign
Minister Elie Salem today but the
agenda for the discussions was not
revealed.
In Tel Aviv — where the govern
ment of Israeli Prime Minister
Menachem Begin has flatly rejected
Reagan’s proposals — one Israeli offi
cial said Monday it is too early to
gauge the significance of Arafat’s
talks with Hussein.
“The fact that he (Arafat) was re
ceived with embraces does not mean
anything,” the official said. “PLO
men who left Beirut for Jordan were
received by Hussein with a kiss, but at
the end of the line he took their guns
away.”
In Dallas, officials traveling with
Reagan said a delegation from the
Arab League headed by King Hassan
II of Morocco will meet the president
in Washington Oct. 22 to discuss his
Middle East peace plan and related
issues.
United Press International
WASHINGTON — Although the
stock market is soaring, drawing
cheers from the White House, many
analysts warn there is no certainty in
terest rates will keep falling or that the
economy is headed toward a re
covery.
“The tremendous surge in the
stock market... is based on hope,” said
Otto Eckstein, head of Data Re
sources Inc. “Now we have to wait a
few months.”
He added, “The investment com
munity, institutions and individuals,
believe lower interest rates will pro
duce a recovery. We are hoping, but
we don’t know it.”
The Dow Jones industrial average,
up 20.88 points Friday, soared 25.94
points to 1,012.79 Monday, the high
est level since it finished at 1,016.93
on April 28, 1981.
The Federal Reserve’s lower in
terest rate push triggered the buying
frenzy, which is showing more power
than almost any rally in the stock mar
ket’s 190-year history.
In Dallas, President Reagan called
the stock market a “leading indicator”
of the economy and said investors’
“commitment to put cold, hard cash
on the line signals a vote of confi
dence in America’s future.”
But in Boston, Sen. Edward Ken
nedy, D-Mass., again attacked
Reagan’s economic program, point
ing to another rising figure — the
nation’s unemployment rate, now at a
Great Depression high of 10.1 per
cent.
“When you have over 10 percent
unemployment and 11 million men
and women out of work, I think there
is very serious pain, anguish and suf
fering being experienced by millions
of Americans,” Kennedy told a news
conference.
Kennedy said he was “grateful”
interest rates are coming down but he
called that “long past due,” and ques
tioned “how long they’ll stay down.
Economic analysts said the heart of
the continuing optimism on Wall
Street is the Federal Reserve Board’s
indication it thinks the economy is so
weak short-term expansions in the
money supply are no longer worri
some.
Fed Chairman Paul Volcker, at a
weekend news conference, said the
Fed is “continuing to restrain the
growth of money and credit to
appropriate levels in the interest of
encouraging a continuing decline in
inflation.”
But, he added, “That policy does
not imply continuing pressures on in
terest rates.”
One analyst who does believe in
terest rates will continue to fall is
David Jones, economist at Aubrey G.
Lanston & Company.
“The dismal economy and the
Fed’s new concern about it mean the
prime and other short-term interest
rates should move down fairly
promptly.”
Faculty members probe
new insurance policies
Disarmament
speech at 8
Dr. Edward Teller, who has been
called the “father of the H-bomb,”
will speak in 601 Rudder Tower at 8
tonight.
Teller’s speech, “Perspectives on
Nudear Disarmament,” is sponsored
by MSC Great Issues.
During World War II, Teller
worked on the Manhattan Project — a
secret, multi-million dollar govern
ment effort to build the first atomic
bomb. In 1949, after spending three
years as professor of physics at the
University of Chicago, he became
assistant director of the Los Alamos
Scientific Laboratory in New Mexico.
Teller has served on the Atomic
Energy Commission. He is a member
inside
Around town 4
Classified 12
National 12
Opinions 2
Sports 17
State 6
What’s up 14
forecast
Today’s Forecast: High in the high
70s, low in the upper 50s.
by Rebeca Zimmermann
Battalion Staff
Although medical insurance rates
for the Texas A&M System increased
Sept. 1, faculty members continue to
question the new policies.
The Texas Association of College
Teachers met Tuesday to discuss
alternative insurance plans and ways
to avoid future rate increases.
John Dinkel, chairman of the com
mittee on System employee benefits,
said the committee plans a survey of
about 12,000 Texas A&M System em
ployees and open hearings on insur
ance problems.
He said the survey will ask em
ployees what type of medical insur
ance coverage they want and how
much they’re willing to pay for it.
Faculty input will be crucial in the
committee’s functions, he said.
“I urge you to contact your faculty
representatives,” he said.
A previous lack of contact among
faculty members and their represen
tatives is a problem, he said.
Several faculty members sug
gested that System employees should
be informed before changes are
made, so faculty questions and com
ments on new insurance policies may
be aired.
“We may not be dissatisfied with a
lower plan for lower cost,” one faculty
member said.
The committee will try to keep Sys
tem employees informed about any
anticipated or predicted changes in
insurance rates, Dinkel said.
H. Ray Smith, Texas A&M dire
ctor of personnel, agreed that earlier
consideration of different companies’
bids may give faculty members more
time to respond to any future in
creases.
John Honea, director of insurance
and risk management, said alterna
tive plans were examined in October
1981, when the contract bidding pro
cess began for this year’s insurance
plan. But, contracts must be
Some employees were faced
with an almost $100 per
month increase — John
Honea, director of insur
ance and risk management.
approved by the chancellor and the
board, which takes some time.
He said about 480 insurance com
panies were contacted about bidding
on the Texas A&M contract; six
actually responded with bids. After
looking at the six plans, the System
narrowed the choice to Prudential or
Southwestern insurance companies.
Prudential’s bid included $5.6 mil
lion more in premium payments than
Southwestern’s bid, Honea said.
Reasons for the rate increases in
clude an increase in medical costs and
mandated federal and state require
ments.
Inflated insurance claims also add
to the rate increase, Honea said, be
cause some inflated or fraudulent
claims are caught on audits by the
insurance company.
“We plan to visit hospitals and go
in and audit small claims,” he said.
Itemized claims may be requested.
If a fraud is found, the insurance
company will go to the district attor
ney, he said.
Another cause for the insurance
rate increase, Honea said, was the
lower-than-anticipated state contri
butions for state employees’ insur
ance benefits. The Texas Legislature
increased insurance contributions
from $48 to $58 per month — $10
more a month per employee; some
employees were faced with an almost
$100 per month increase.
Dinkel said $2.4 million in pre
mium payments may have been saved
if the state had contributed the antici
pated amount of about $80.
Federal and state requirements
guaranteeing new state employees in
surance coverage for pre-existing
medical conditions also contributes to
increased rates, Honea said.
He said local school district plans,
which have lower monthly payments,
are not comparable to Texas A&M’s
plan because these groups aren’t re
quired to cover pre-existing medical
conditions of employees.
These monthly rate increases may
be the reason why 24 percent — about
1,500 people — of the employees or
dependents previously covered by
System insurance policies to drop the
plan.
A faculty member expressed con
cern because low-risk, healthy em
ployees probably were the ones who
dropped insurance coverage. This
may increase the System’s over-all in
surance risk and raise rates again.
staff photo by David Fisher
Windy days are back
Tuesday was another cold, windy day. Many people
were bundled up in rain gear to keep from getting wet.
This student had nearly everything but the front of his
face covered to protect himself from the chilling rains.