Menlo Park Meeting: U.S. Education Reform and National Security

ERIC SCHMIDT: Well, good afternoon, and I hope everybody's enjoyed their fine lunch. I am -- my name is Eric Schmidt, and on behalf of the Council on Foreign Relations, I just wanted to welcome everybody.

Before I forget, as is true in all aspects of life now, everything in this event is on the record -- (laughter) -- on the record. But, anyway, the -- what we thought we would do today is talk a little bit about a task force that the CFR put together. And this task force, led essentially by Condoleezza Rice, who I think everybody knows, and Joel Klein, who everybody also knows, along with the project director, whose name is Julia Levy, who is with us.

Condi, of course -- she prefers to be called "Condi," as opposed to "Secretary" -- is arguably one of the 10, five most influential Americans today by virtue of her role over the last decade. We are fortunate to have her here, both in Stanford teaching. Her background, of course, as you know, was as a Russian scholar, a foreign policy scholar, and so forth; moved herself up the rank(s), ultimately became a provost. So if there's somebody who cares about education in the room, there's nobody who cares about it more. She's devoted her career to this and of course to the aspects of foreign policy, and I think everyone's aware of her extraordinary service to our nation.

Julia worked very closely with Joel Klein. And if you don't know Joel, Joel is a personal friend of mine. And again, he's one of these people who foolishly decided to try to take on something impossible, which was the reform of, in this particular case, secondary education in New York City and, I think, serves as kind of the archetype of how this has to be done in modern America. And I think -- so I think the three of them together sort of put this together.

What we thought we'd do is just have a couple of comments from both of them. From my observation -- is that for those of you who have studied this, there was a -- in the early 1980s, there was a report called "The Nation at Risk," and you can use your favorite search engine if you haven't read it to find it. And it basically lays out a collapse of educational standards, issues around incentives, globalization, and all of the problems literally foreseen 30 years ago and over the years. And my involvement with this -- I've been extraordinarily frustrated that people not only do not read the report, but also don't actually address any of the things that it's -- that it's trying to address. And I think we have an opportunity now to write another report, which essentially updates a lot of that data with the new data, and serves as maybe something we can actually act on.

In technology, it's interesting that there is in fact innovation in education. And for the Silicon Valley, of course, education -- innovation is everything; many of you are involved in innovative parts of what we do. So, for example, in college education, there's some new science that indicates that learning, at least in some subjects, could be improved by 10-minute lectures, and then they pause, and then they do various classroom exercises, and this has now become sort of a new way of teaching certain technical subjects. It was sort of scientifically derived in a set of physics classes on the East Coast.

For undergraduate -- sorry -- for K-through-12 education, we're fortunate to have, as an example, the Khan Academy here in Los Altos and Mountain View, which is another example of somebody who's trying to do things with new technology, 10-minute segments and so forth. Stanford, for example, more recently, a set of people that I know put together the first course, which is now being replicated and so forth, where one particular course -- this was on Artificial Intelligence -- did it online. They had a 150,000 students, of which 90 percent were outside the United States. So what a wonderful gift, you know, to the rest of the world. So we see evidence of creativity and innovation.

And I think -- I think perhaps, Condi, you could take us -- what are the core findings in your report? What are we going to do to make sure that your report actually gets some traction and does not spend 30 years as something we refer to?

CONDOLEEZZA RICE: Right.

Well, thank you very much. First of all, thank you, Eric, for all that you have done for the United States, for the world and as an innovator. But also I know your deep passion about this subject, and we've had a chance to talk about some of the concerns about K-12 education that we share.

The reason that we wanted to do this report was precisely for the point that you made: that perhaps we could bring a different constituency to the discussion of K-12 education reform by recasting it as what we really do believe, which is that it is a core national security problem for us.

If you think about the child in East Oakland or in Anacostia, it's all too easy to say, well, my child is being educated. And if that child isn't being educated, then that's not my problem. Well, as a national security problem, that child in Anacostia or that child in East Palo Alto or in East Oakland is a national problem, not just a problem for that poor neighborhood.

It's a problem because we aren't producing people who are competitive in -- and the United States will suffer a competitive disadvantage. We looked at some of the international data. It's well-known that American kids perform poorly internationally when it comes to tests, particularly in science, mathematics and the like. But perhaps not as well known that a child in South Korea will study in third grade what an American child will study in fifth grade, and so the gap is growing around the world.

We have the shortest school day and the shortest school year of any industrialized country in the world. As Joel Klein is fond of saying, our school day and our school year were structured so that kids could go and take in the harvest. That's how long it's been since we have reformed some aspects of K-12 education. So the first point is it's a national security problem because of the issue of competitiveness.

Secondly, it's a national security problem because we are seeing in some of our core institutions of national security that so many of our citizens cannot participate, even if you look -- when I was secretary of state, for people who speak foreign languages early enough in life to really become proficient and fluent, you don't find them. When I was in school, it was a patriotic thing to go and learn Russian because that was our concern. We have too few people who know critical languages like Mandarin or Dari or Farsi or, for that matter, Arabic. And so we don't have -- in intelligence agencies, in the Foreign Service, we're not producing that cadre of people who can be fluent.

But we're also failing miserably in the number of people who can choose to defend us. The stats on over 70 percent of people unfit for military service is really a frightening one, and only 30 percent actually passing the basic skills test that is there to get into the military. So, in the basic security institutions, these gaps to K-12 education are showing up.

And then finally, what concerns me perhaps most is something that I'll call social cohesion. The United States of America has always been a place that it didn't matter where you came from, it mattered where you were going. We all know that we are experiencing significant problems in income distribution, that those gaps are growing. But the one intervention that we always had was education. If you get a good education, even if you came from the poorest circumstances, then you could achieve. We have so many examples of people who came from very humble circumstances, went to a good public school, and then ended up at the top. And increasingly, if we're unable to provide that, if I can look at your ZIP code and tell whether you're going to get a good education, then we are quickly really becoming two nations. And given globalization, those who don't have skills are going to be brutally punished by a globalized technologically sophisticated environment.

So we think that this is truly a national security problem, and we wanted to describe it as such, and to say to the whole nation, but also to my colleagues who come from the national security side, pay attention. We can do all that we want in terms of our military, in terms of economic development; if we don't get this right, we are in serious trouble.

The findings of the task force -- and let me just say, I loved being a part of this task force because I got to know the education reformers, a group that I've met sporadically. But sitting with them, and seeing how many people are really dedicated to trying to get this right is very encouraging, and indeed there have been at lot of improvements in K-12 education. There is a lot of effort to try to bring technology into the classroom in a way that is smart, just not dumping on a computer on somebody's desk, but actually using it in a smart way. But we had really three major recommendations.

First of all, we are supportive of something that has been called -- that is called the "common core." The governors -- National Governors Association -- actually got together -- (changes pronunciation) -- got together, said there should be some common standards for American kids and developed a common core.

Now, it's not what you might think. I thought immediately curriculum being imposed from Washington -- this doesn't sound like a good idea to me. But it really is just a set of standards developed by the states that will be administered locally so that it doesn't violate our tradition of local control of education. But if anybody really wants to argue that a kid in Alabama shouldn't know the same things that a kid in California or Texas or Vermont knows, then I think we can have that conversation. I don't think it's a very good argument.

So we suggest the adoption of the common core, but not just the STEM part of it, science and technology, engineering and mathematics, but also to look at foreign languages, to look at the arts, which can help to develop creativity.

Secondly, we believe that we have to have a strong voice in favor of choice, choice within school districts, because the failing public school, the failing neighborhood school is too much the reality for particularly poor parents, so choice within school districts, choice in the way of charters, which are public options, and most -- much of the task force, but not all, believed choice for private options if necessary.

One of our members, Randi Weingarten, who is president of the American Federation of Teachers and was very active in a very constructive way in this task force, could not sign onto the choice recommendation, and we discussed it. She said, we can't have an opt-out system; it will kill the public schools. I said, the problem is we already have an opt-out system; if you are capable of doing so, you will move to a district where your kids will get a better education, so you will move to Palo Alto or you will move to Los Altos or you will move to McLean, if you live in Virginia, or Hoover, if you live in my hometown of Birmingham, and that's how you'll get your kids out. If you have real means, you'll send them to a private school. And the only ones who are trapped in bad neighborhood schools are poor parents, and that's the height of inequality. And so we did argue in favor of choice.

And I should just mention -- you mentioned higher education. The United States continues to be the gold standard in tertiary education, in higher education. Everybody wants to come here. Higher education has two things that the public school system does not have. It has competition -- Stanford must compete for the very best students -- and secondly, it has a whole range of options, from the community college through the -- to the liberal arts college to the research university and et cetera, et cetera. So competition, we think, is a good thing for the school system. Either schools will get better, or they will go away.

And then finally, we believe that there ought to be a national audit periodically to see how we're doing on the national security lens on K-12 education reform. And so that's why we think that this has the potential to bore through a little bit, because it is a statement from a different constituency.

SCHMIDT: Thank you.

Julia, why -- this is so obviously correct. (Laughter.) Why is this so hard? Now, you've spent, it sounds like, a decade in the trenches with these people.

JULIA LEVY: Yeah. Not quite a decade. But --

RICE: She's not that old -- (inaudible). (Laughter.)

SCHMIDT: And furthermore, you've made your -- your entire adult career -- (inaudible). And furthermore, with this report, you -- one of the characteristics of CFR reports is they're always bipartisan, right, they're not particularly political, they're trying to get to the -- they're data-driven and so forth, so on. So given the facts are so obvious, why is it so difficult?

LEVY: I think that's a good question. If we knew the answer, we probably would have fixed it. But if you look at -- if you look at the Nation at Risk, which came out when I couldn't yet read -- (laugher) -- no, I mean, it's --

SCHMIDT: Early reading was what it was recommending. (Laughter.)

LEVY: Well, no, but it's -- so my entire lifetime, everybody has known basically the same facts. And when we were looking at the facts in putting the report together, it's not so different than in 1983. And so reading and math and science scores have pretty much been flat. And as we've been pretty stagnant, the rest of the world has been moving ahead. So everybody else is making progress, and we're kind of OK with the way we've been doing education for the last hundred years. And it's pretty clear that that's increasingly not OK.

And I think if I were to guess what the answer is to your question, I think it would go back to what the secretary just said about people being in denial, sort of thinking it's not their -- (microphone noise) -- sorry -- it's not their problem. And so if you're somebody who says, you know, it's somebody else's kid who's getting a bad education; it's not my kid, or if you're a business who says, well, you know, we can hire globally, we -- there's a global talent pool, and you don't get involved in creating a solution, I think that it makes it easier to sort of push it off. I mean, it's a lot more obvious to people that jobs are a concern we have to deal with, that if there's high unemployment today, we have to fix it today. Education is something -- it sort of takes a broader view and a longer-term vision to deal with, and it's easier to say it's not my problem.

SCHMIDT: So Condi, when you and I met in your office a while ago, you made what turned out to be the simplest argument that I should have -- I should have always been hearing, and you made it particularly well. And you said, why don't we just give people a choice of two things? And you made that argument not just around education, but as sort of a philosophy. And I think you argued it was a philosophy about any form of government service or monopoly or -- (inaudible) -- exactly --

RICE: Right.

SCHMIDT: -- however you phrased it. You're clearly committed to a choice argument. So let's explore that just on the record here. Why does -- why does choice matter, and why don't we have it?

RICE: Well, I think we don't have it because frankly, it gores a lot of oxes. And if people are given choices and they have a way out, they may take it.

SCHMIDT: (Gasps.) Oh, competition.

RICE: It's called competition. And --

SCHMIDT: But everyone loves competition --

RICE: Everyone loves competition --

SCHMIDT: -- especially the people who are losing their jobs -- (inaudible) -- (laughter) --

RICE: Right, right, right, right. Well, everyone loves competition unless it might affect me, right? And --

SCHMIDT: And also reviews of themselves and a few other things -- (inaudible) --

RICE: Exactly. And look, my mom was a teacher, right? I am very, very respectful of what teachers do. And it's hard. I think we've made it harder for them because the schools have become a place where you spend most of your time just trying to control the classroom rather than teaching. So I am one who believes we owe teachers a great deal.

I also believe people want to be good teachers and not bad teachers. So either you get good teachers and you reward them, or you help people who want to be good teachers become better teachers. But if you're not a good teacher, then find another profession. We really can't afford bad teaching.

But when it comes to choice, the argument is always something like the following: Well, if we have choice and if funding begins to follow the student in any fashion, then you're going to erode the public school system, and what you will really have is just a kind of free market system in which you don't have this great public institution called the public schools. I say right up front, public schools -- a public school system is one of the cornerstones of our democracy. But you can't have the triumph of the system over the interests of the kids. And at this point in time, good public schools are doing a fantastic job, and some of the charters are doing a fantastic job. And heaven knows -- I see Laurene out there, Laurene Jobs out there -- organizations like College Track or the Boys and Girls Club -- Peter Fortenbaugh is out there -- are trying to work with the public schools to make sure that they can deliver for children.

And so I'm all for doing that, and I'm all for strengthening public schools. But who are we kidding? There are some neighborhood schools that people shouldn't have to leave their children in those schools. And the only people who have to leave their children in those schools are poor people. Other people will get their kids out of that school. As I said, they'll move to a good neighborhood, or they'll send the private schools. That is the height of inequality. And that's why choice.

And then people will say, well, not every child will be served by choice. True. But some will be. And some who are being badly served right now will be served by choice. So if 50 percent of those kids can get out into a better school, we're better off than we are now.

SCHMIDT: The -- one more question for Julia. Joel wrote an article that is the single best indictment I've ever read of New York public unions, over their inability to do even the most obvious things that would improve education. You remember the article. You lived through the -- and I'm sure there's another side to the argument, but the fact of the matter is you did write it, and I did read it. (Laughter.) The -- you lived through that -- the attempt to reform New York. Again, why is it so hard -- my criticism is it appears to me that the educational system for K through 12 is run for the benefit of the adults, not the children. It's the simplest conclusion I can come to. Why?

LEVY: Well, if you look at just sort of overall spending on education in America, it's like 80 percent of what we spend goes to the people in the system, the teachers and other educators. And so there's a lot of -- I mean, so that's 80 percent of $600 billion a year. It's a huge amount of money. There's 70 or -- yeah, there's 70 million teachers, I think, in the -- in the country. Or sorry -- am I getting the number wrong? It just sounds so huge. (Laughter.)

But in any case, it -- I think that there's obviously huge vested interests. And then over time there've been these giant contracts. I mean, if you look at the contract with the teachers in New York City, it's, I think, 250 pages long, which is -- which is pretty long. There's a lot of rules; there's a lot of regulations. And it's really hard to sort of go backward without something big happening, without sort of some big, dramatic change.

And so people -- I mean, the rules are set up to -- for example, if you're a teacher in New York and you have 10 years of experience and you have a master's degree and you're really great at your job, you're the best teacher, you're getting the same -- you're getting $75,000 a year, which is the same amount of money that you're getting if you are horrible at your job, or you're getting the same amount if you're a phys ed teacher versus a math teacher, even though a math teacher might be in higher demand.

And so it's just the rules are set up in way where everyone's sort of used to it. The people who are defending the status quo are defending the status quo, and it's hard to make changes. That said, I think that there's been some changes recently, and I think those are causes for optimism. And I think a lot of times people claim that you can't change anything. And I think those people probably should re-evaluate, because a lot of people, including people in the teachers unions, some of them, are interested in the same goals that we were discussing as part of this report.

I think that -- I mean, everybody kind of came together around the idea of this being a national security threat. And I think that if we could do more of that kind of constructive conversation, we could maybe move in a direction toward actually changing some of the rules to open the schools up to more innovation and to sort of changing the orientation of the system to one that really thinks about the interests of kids rather than perhaps the interests of the people -- the adults in the system.

RICE: Could I just add on that? I do think things are changing. And my mom was a teacher. She was a member of the union. And so one thing that I'd like to be very -- I think we have to be very clear of, because this sometimes gets cast a bit, well, you're anti-teacher -- everybody admires teachers and good teachers. We all had them, you know. We probably wouldn't be sitting here if we didn't have good teachers along the way.

And so the question is, how do you free the teaching potential that is out there? I've heard it said, well, the best people don't go into teacher. Well, I don't actually think -- yes, it's true that a lot of people who would have gone into teaching, particularly women, in the 1950s and 1960s now have other options. But there are an awful lot of really good teachers out there.

So how do you free their potential? How do you make it possible for the teacher who really merits greater pay because he or she has spent the summer in continuing education and has gotten a new credential -- how do you really reward that without a stultifying system that drives everybody to the lowest common denominator? And I think that's a conversation that can be had with the unions. I found Randi quite open to that conversation.

And so I would hope -- and I do think we're starting to see some partnering. Michelle Rhee was able to get a union contract that was really quite dramatic. Some of the things they've done in Indiana --

SCHMIDT: Michelle, of course, we fired afterwards.

RICE: Well -- yeah, well, there was that. But -- (laughter) -- but she's doing OK in Sacramento, I happen to know.

SCHMIDT: (Inaudible) -- you can always the pioneers by the arrows in their backs. So she's clearly one of those. (Laughter.)

RICE: Well, and you know what? It's going to happen. You know, you're going to have a push-back because there's political power that is also wrapped up in this. But my concern about working through the system in a slow way is we're losing a generation of kids not every 18 years, but every three or four years, because we know that if you can't read by the time you're in third or fourth grade, you're probably not going to read. So part of the reason we wanted to do this report is we feel that there's a greater urgency to push some of the reforms that are under way.

SCHMIDT: Let's -- I think we suggested -- we'll just sort of get you all involved a little earlier than planned. I wanted to make sure that I acknowledged Emerson Collective and the Allegro Foundation. Both made significant contributions -- (inaudible) -- so thank you.

RICE: Yes, absolutely. (Applause.)

SCHMIDT: Tom, you had your hand up first.

QUESTIONER: I'm wondering how we think about what needs to be done legislatively --

SCHMIDT: And by the way, as a principle, why don't you establish your name so we fully know who --

QUESTIONER: Tom Stephenson, partner of Sequoia Capital. I used to work with Condi at the State Department.

SCHMIDT: Excellent.

RICE: Hi, Tom.

QUESTIONER: How we think about what should be done legislatively -- No Child Left Behind -- Senator Kennedy -- it was a -- very much a bipartisan proposition, tremendous contribution in the sense that it really, for the first time, established the concept of accountability in the education system. As we look at where we are today -- and you alluded a bit to this -- on the one hand, we have those who think of things from a states' rights standpoint and think that all of this should be at the state and local level, and there are very strong arguments to be made about education being managed at the local level; on the other hand, you talked about the core standards that need to be out there.

And how -- what do we do from a federal -- if anything, from a federal legislative standpoint? Because the worry, at least to me, is that if you leave it totally to the states and the local -- the local school districts, you may have as much a race to the bottom as to the proper race to the top of this administration. So how do you think about what we should be doing from a national perspective legislatively?

RICE: Yeah, thank you, Tom. And by the way, Tom was the ambassador to Portugal, not just working with me in the State Department. (Laughter.) So he was in the European Union watching some of what they do on education.

I do think that one thing that we've tried to do by declaring this a national security challenge or a national security crisis is to say there actually is a federal role here. It isn't a federal role in the sense -- we very clearly rejected the idea that we were ever going to go be -- fill in the blank -- Singapore, China, Finland, which are all way up there in terms of their performance on tests. But the United States of America ought to have its own way of reforming that reflects American strengths and American values.

The first of those values is competition. This is a country that values competition and merit. So let's introduce that in. Secondly, this is a country that values federalism and values local control and has. So let's see how that can work.

That means that the federal government's role is not to impose a set of curricula -- not to have a national curriculum, for instance. But it can mean that the federal government can have -- generated from the states, by the way -- a way of helping to assess, helping to hold accountable for federal funds that might go -- so from No Child Left Behind through Race for the Top -- Race to the Top, that's been the idea, that the federal government tries to incent certain kinds of behavior -- and that the federal government can play a role of doing an audit that also makes certain that the country is improving as a whole.

But when it comes to the argument that Alabama is a different environment than Texas or California or New Hampshire -- absolutely. And so let's put the control, if you will, of how these -- how the common core gets into the schools and so forth into the states' hands, maybe even into the localities' hands -- because we've talked about the states, but of course the local school board is also very critical here.

Let's realize that this is a partnership, but that the federal government does have a role to play. And I worry a lot when I hear the arguments that, you know, there should be no Department of Education or there should be no federal government's role in this. It doesn't make sense. We are one country. And Google can hire in Alabama, it can hire in California, or it can go and hire abroad. And we'd better make sure that our kids are prepared across that broad competitive spectrum.

SCHMIDT: Go ahead.

QUESTIONER: Hi. I worked in another issue, health and security, and in fact worked for General Gordon and Frances Townsend in the White House, also worked in the Clinton administration, so, you know, I've seen what -- when we tried to make health a national security issue, the problem wasn't convincing anybody, as you have done so well here, that it's really important. The problem was convincing the security community, which you know better than anyone in this room, that it is.

So the Defense Department, the State Department, they'll give lip service to it, they'll actually even push it a little bit, but that's not how you get promoted or that's not how you make your bones in either State or Defense, or, for that matter, in the security community everywhere, because they're trained differently. They're not educators. Most of the people in here understand what's going on here, but the people who've chosen in government to do the security side of things, it's not really their thing.

How do you see getting past the fact that we all agree but what you really need to do is get more than a speech from the secretary saying that they agree too? You've got to get it -- it's got to be institutionalized in those security environments that actually can push this as an idea.

RICE: Yeah. Thank you. I think there are three points that I'd make and there -- there are kind of two categories and one point. The one point is that we actually did have some fairly influential special security types on the task force, and if you look around this room, you will see a number of people who are actually here because they're from the national security community. And so we believe that it's our obligation to in fact make the case to the attentive public as well as to the -- what I call the moose heads of national security -- (laughter) -- you know, the ones -- those of us who have tried to do it and now have some platform from which to make the argument.

Secondly, I actually do think -- for instance, in State there are a lot of people that are worried about critical languages, a lot of people, because they know that when we needed to get people into Iraq who could speak Arabic, we didn't have enough of them. And so that's a problem that -- in fact that category resonates in the State Department more than you might think. It resonates in the military that more than 70 percent of people can't serve in the military. That resonates. And Pete Geren, former secretary of the Army, was on the task force, and he made this argument continually. It resonates in the Pentagon that when military families move, they are at the mercy of the public school system district to which they move. And so that resonates.

So what we tried to do here was to actually not just make a kind of argument that this is national security because we wanted to call it something important, but that there are literally pieces of this that are affecting our national security in a very concrete way. And if you think you're going to solve the problem of 70 percent of the people not being able to serve in the military with a lousy K-12 education system, good luck. If you really think you're going to solve the problem of critical languages not being spoken in our country by waiting until people are 25 and trying to send them to the Foreign Services Language Institute to learn these hard languages, good luck.

And so I think we've actually established that there are pieces of this that are -- now, the harder argument, and obviously people will maybe -- I make this argument all the time, you know, the social cohesion argument, people say, oh, yeah, right, but if you look at the aggrievement argument that's out there right now -- you know, the United States has never really had a narrative of aggrievement: I did -- I'm not doing well because you are doing well. And all of a sudden now this becomes a kind of more class warfare, 1 percent, all of that. The reason I think that resonates is that there are people who are saying: You know, really, I can't get out of my circumstances, and more importantly, my kids can't get out of their circumstances. And that points directly to education.

So I think we've tried to be more concrete than just saying it has implications for national security. It actually has national security -- there are a number of national security problems that you cannot solve with the K-12 education system as it is.

SCHMIDT: Questions. Did you have a question, (Mary ?).

QUESTIONER: Condi, I wonder if you could elaborate on your third point, conducting the audit. Who do you recommend conducts it? What will it cover? What's the role of the results, how we communicate it, that sort of thing?

RICE: Thank you. And this is a place where I think we have to do some more work, because what we don't want to do is put it in a federal agency where it dies a death alongside every other report that has to be done every year. You know, I used to have to do those reports myself as secretary, and it's -- so just get that off my desk. We don't want it to be like that.

Secondly, there was a big discussion as to what this audit ought to involve, a lot of concerns that if it became yet another way to expose individual teachers and whatever, then there would be a lot of resistance to it. And so -- maybe Julia will want to speak to this, but I think this is a place where we've got to do some follow-up work with education reformers who might be able to help us better structure our ideas about an audit.

We know that we need to -- we can say what we need to be able to assess, how many people are now studying foreign languages, particularly critical languages, how are we doing on these tests, how are we doing in terms of getting the common core along. I mean, there are some metrics that you could have. But how they relate to longer-term progress is really a much harder issue, and this is something I think we need to spend some more time doing.

LEVY: I'd just add that I think one of the things we talked about was not just having the education crowd coming together and saying here are the things we care about and we're going to go measure them, but having a broader constituency, so including business leaders and leaders from the national security community in that conversation about the priorities and what we'd be measuring, so that, hopefully, would mean that what we're actually measuring is something that actually is related to national security and not just something that people are imagining is related.

And then -- yeah, I mean it's not like we came up with the whole format of the audit and determined that that would happen, but I think that everyone thought that the quality of the information we have currently about education in this country is really lacking. It's really hard, unless you're an expert in it, and even if you are, to say here's how a student is doing in this district and here's how he compares to a student on the other side of the country in another school district, and here's how the schools compare. And I think the idea here was both to sort of keep our country sort of thinking about what our task force was thinking about and also keep everybody focused on moving in the direction we want it to move in.

RICE: And we would need to talk to the Department of Education and others, but again, you know --

LEVY: Yes.

RICE: -- we need to find a way that this is not wholly-owned by the United States government or it really does just become a report that somebody's got to fill out.

SCHMIDT: Every single person in that table. (Laughter.) Let's start with -- (inaudible).

QUESTIONER: Thank you very much. I'm Pino Coriare (ph) from the Stanford Center for International Security Cooperation. The report makes a very compelling case that we're in crisis. It also makes a very compelling case that we can't change what we can't measure. But on that score, I wanted to ask a little bit about something you just very briefly touched on when you talked about the arts.

And I want to set it up by noting that I taught for a couple of weeks in Korea last summer and had a chance to teach some of the very best college students in Korea. And what struck me is that if you asked them to write a project on the history of the Nuclear Nonproliferation Treaty, they'd do great, but if you asked them to take part in a simulation where they had to represent the United States or Japan or China or Korea, they fell completely apart. They really would ask how many words could be in their memo, how many words could be in the title, how big the font size should be.

So I wonder what we might bring to the discussion of educational reform, even from a national security perspective, with respect to creativity and how we make sure that doesn't fall out of the equation.

RICE: Absolutely. And Pino (sp), thanks for being here. And one of the concerns that I think we had with this was, as I said, not to try to replicate in a slightish way something that we can't replicate anyway. We are not a very hierarchical society. We are a society that has done its best because of its creativity and innovativeness, and so how do we -- how do we replicate that in the education reform rather than trying to look like Singapore or Korea?

And we -- that led to an argument that maybe there's not enough attention even to the arts or to the way that people do critical thinking. I was interested to find that the common core, for instance, imagines that in the language arts it might be about reading a text and actually knowing what's in it and then being able to discuss it in a way that suggests that you've actually had to grapple with the paradoxical concerns within it or that you've actually had to deal with the dilemmas that are raised within it. So it seems to me that those are ways that you get kids to actually think.

Now when you talk to teachers -- and here I have some sympathy for what the teachers are saying -- they're saying, but you know, when you start teaching to the test, you're going to teach to the test the easiest things that are quantitative and where there's a, quote, "right and wrong" answer, and I'm going to push all creativity and innovation out of the classroom.

We have to somehow find a way to do both, and I do think with the arts, with simulation, with interpretative writing, interpretative reading, the ability to bring technology into the classroom -- you know, I was quite stunned to find out how much in art classrooms now the computer has become ubiquitous as a tool for learning how to do -- to do art.

So the United States has to have some U.S.-specific answers to this problem, and I do think innovation and creativity is part of what we have going for us, and we don't want to knock it out of our schools as we're trying to teach kids to do math problems.

SCHMIDT: This gentleman right behind you.

QUESTIONER: Thank you. I'm Jonathan Spalter. I'm chair of the board of Mobile Future, a mobile and wireless technology association and think tank which is based in Washington D.C., although I get to live here.

RICE (?): (Chuckles.) Lucky you. (Chuckles.)

QUESTIONER: You know, one of the things that is a connective tissue between those of us who are living around and working around these ZIP Codes of Sand Hill Road and the national security community of course is STEM education, our concern for its future and advancement in the country, for all of the obvious reasons.

I know that your report has been focused on the K-to-12 time frame, but curiously, when you talk to people in the STEM movement, the research has shown that if we lose children in the preschool years, if we don't touch the kids in the preschool years, we effectively will lose them by the time most of them actually get any STEM education, which is typically in -- around the eighth grade.

I have the really good honor of being an adviser to a -- the Jim Henson Company, which has a new national program, called Sid the Science Kid, based on this learning that you have to touch the preschool kids in order to capture them and their parents on this path to sustainability in STEM education in the U.S.

I just was wondering, generally, your thoughts on the reform -- the context of reform in STEM but also -- and again, not suggesting mission creep, because you can't do everything -- did the preschool years enter your thinking as you were thinking about the report? And I'd be interested in hearing --

LEVY: So the easy answer is, the scope of the report was K-12.

That said, we did talk about the importance of early childhood. It just didn't make its way into the report. But I think everybody who was part of the task force effort believes in it. It's sort of -- it -- that early childhood education is really critical, and what you have when you get to kindergarten really matters. It's not like if you start out three years behind, you can easily catch up.

So yes, it's important. No, it wasn't really part of the scope of what we -- what we discussed.

RICE: I think it was raised several times by -- particularly by the educators, and we all understand the value of it. It's just the scope of the report was to K-12.

SCHMIDT: Someone over here.

QUESTIONER: George Schenk (sp), and I'm not an educator.

Reading your report, one gets the -- one is struck by the conspicuous absence of a comment that additional money would help solve this problem.

RICE: Right.

QUESTIONER: Now you cite figures showing that -- that would give someone the impression that money has kept pace with the needs. At the same time, however, you talk about how special needs children are taking a larger and larger share of the money that's available for education. And I think it would be useful to see -- to have greater detail on that, because if in fact you have less money available for the population that you're talking about, that needs more of the attention, I'm not surprised by the results.

And in a society where people are focused -- the political issues are focusing on a -- an ideology of -- or a division on the ideological question of whether one should pay more in taxes or not pay more in taxes, it strikes me that the use of competition as a solution in the report may be missing the point.

I look at competition in the university level and I see -- I would be distressed to see a society where the University of Phoenix gets more money because they compete well and the University of California gets less because no one is paying taxes. So could you talk about those issues a little bit more?

RICE: Sure. OK. I mean, I think there are several things that suggest it's not an issue of necessarily more money, but it is an issue of how money is spent. And we do cite some figures that show the threefold increase in education spending in the United States over the last several decades.

I might just cite something that I think Michelle Rhee would cite, which is that Washington, D.C., was the per capita -- the inner-city schools -- the per capita second-largest expenditure on children -- on education of children in the country and the worst school district.

So even if there's some relationship, it's obviously not a direct relationship between money and performance.

I do think that you have seen a significant growth -- let's leave out special needs children, although I think there is some concern that the definition of "special needs" has been growing and growing. But let's leave that aside.

There's clearly a concern about the ratio of teacher to administrator that needs to be understood better. And one of the reasons that we think this audit is important, to go to Laurene's problem -- Laurene's question, is that, you know, data are actually pretty hard to find on a lot of these issues across the system.

I have a friend who -- somebody I work with who is an applied economist, who works on educational issues at Harvard, and he's got into this because he said he'd never seen an area that was more data-free -- (laughter) -- than the question of educational reform. So obviously we have some issues about data.

It is also the case that you have a number of schools, charter and parochial, which, for very much less money, do a better job of educating kids.

So I don't think there is a direct relationship. I would be perfectly willing to spend more if I thought you were actually going to get results. But putting more money into a system that is so radically broken is likely to waste more money.

And so the question is, if you reform first and then think about what are the resources needed for the reform system -- so for instance, if there is indeed more money needed so that the common core can spread -- I'm perfectly happy to advocate for that. But more money into a system has been going backwards in terms of its performance seems to me to put the cart before the horse.

Now I had to -- I had to actually deal with these issues. I was Stanford's provost. That's the budget officer. And I used to make people really nervous by saying I've actually never seen a budget that couldn't cut by 10 percent and be better if you will spend money on the right things.

So I think you have to answer the question first, what do you want the system to do; how you're going to reform it; how are you going to deal with the obvious deficiencies in it; and then what resources are needed to this reformed system, rather than asking the question the other way around.

And by the way, in terms of competition in the higher education system, absolutely, I would hate to see money follow reputation in quite that same way. But students follow reputation, and that matters.

SCHMIDT: The lady in the back has the last question from that table.

QUESTIONER: (Off mic.)

SCHMIDT: (Chuckles.) We've exhausted that table.

QUESTIONER: (Off mic) -- monopoly.

SCHMIDT: They -- no, they were all standing up and ready to go and -- (inaudible).

QUESTIONER: (Off mic.)

QUESTIONER: Yeman (ph), the Heartland Institute. There were a number of people on the task force who actually disagreed that the issue you describe is actually a grave national security threat, and Stephen Walt, a huge national security expert, was among them. I was wondering if you could address their concerns.

And if I could cheat a little bit and throw in one more question, I actually grew up in inner-city Oakland, California, and I went to Oakland's public school system, not from K through 12 but from four to 12, and so I knew a few amount of how -- about how bad Oakland's public -- inner-city Oakland public -- I'm sorry -- inner-city public schools are, and I know a fair amount about how bad public school teachers can be. But I also actually know a lot more about how bad public school students are.

And this leads me to my question. To the extent that all of these recommendations that you guys describe here could potentially, you know, be very beneficial, how much success do you think you could get if we don't fix some of the other fundamental root problems that are not necessarily part of the education system but are actually societal problems?

So for -- particularly if we talk about poor neighborhoods, you know, problems such as the breakdown of the family, the absence of law and order, the failure of people to assume personal responsibility. And if we fail to address those things -- and additionally things like economic, you know, revitalization and things like that -- if we fail to address those questions, do you -- are you confident that the solutions that you guys provide will in fact yield real results down the line?

RICE: I would love to do something about all those problems, but let's be real; we're not going to be able to do something about all of those problems until we've lost several more generations of kids. And in the interim, the one intervention we've got into those problems is a school system that somehow gives a kid a first-class education and pulls them out of those problems.

I am sure that people like Peter Fortenbaugh here from the Boys & Girls Clubs could tell you many stories of kids who are in the Boys & Girls Clubs who come from all those circumstances you've just described but somehow, through the education and the intervention of adults on their behalf, they're getting out.

So all I'm asking is, yes, it's terrible that we have broken homes. Yes, it's terrible that we have poverty. Yes, it's terrible that we have neighborhoods that are dangerous, but it's not an excuse for the public schools not to do a job of getting some of those kids out and educating them so that they can then get themselves out of those circumstances.

Let me tell you a little story. I grew up in Birmingham, Alabama. It's the most segregated big city in America. Birmingham, Alabama, with Bull Connor determined that black people were actually barely human, could have been a place where nobody got educated. But nobody made that argument in Birmingham, Alabama. Instead, people said: Our schools are going to be good enough and our teachers are going to be demanding enough that Bull Connor's not going to determine the future of our kids.

And not just for kids like me, who had educated parents, but kids who had parents who themselves couldn't even read managed somehow, in Birmingham, Alabama, in the most segregated big city in America, with schools that were getting 25 percent of what the white schools were getting in terms of resources, they managed to educate those kids.

So we need to stop making an excuse for public schools that aren't somehow able to pull kids out of the miserable circumstances that you're talking about, because we're not going to, unfortunately, be able to fix all of America's ills. We're going to have to intervene where we can. And public school education has always been one of those interventions that mattered. Increasingly, it matters less to the kids that are in the most difficult of circumstances.

Now, as to those who don't think this is a national security problem, fine. People can think that. But I just want to repeat, 70 -- more than 70 percent of the people who are available cannot serve in the military. That's a national security problem. I can't find people who can speak critical languages to be in the intelligence services or in the foreign service. That's a national security problem.

Jobs are going someplace else. There are increasingly structurally unemployed people in the United States. They're going to live on the dole because they will have nowhere else to go. That actually is a national security problem, because a country that does not have an economic base that serves its people well is subject to and in danger of all kinds of problems of social cohesion.

So I'm perfectly willing to let somebody argue that it's not a national security problem. I just don't happen to agree. (Laughter.)

SCHMIDT: Another question, right here.

QUESTIONER: Yeah, hi. Bill Reichert with Garage Technology Ventures.

RICE: Yes.

QUESTIONER: Arguably the most significant federal initiative recently has been the Race to the Top. And I'm wondering to what -- to what degree do you think it's a good model, to what degree do you think it's -- you know, it's not going far enough, it's going too far? Are you aligned? You know, how does that model apply, which is sort of the -- it's the simultaneous reform and money model. It's -- right, as opposed to reform and then money? I don't know.

RICE: Right. Well, what it is is it's an attempt. And I actually do think there are a lot of good elements to Race to the Top. And I think, like Margaret Spellings before him, Arne Duncan's done a good job. But what Race to the Top is trying to do is to try to incent, through the funds that the federal government has available, those who are willing to take difficult decisions.

I think some of the states have lobbied back to get the standards lowered, which doesn't fill me with confidence, but at least they're responding to the need for standards. I don't want to overstate what the federal government can do. And I think we all have to be -- to recognize that there is so much of an education bureaucracy out there that is not influenced by Washington that there's only so much the federal government can do.

But at least the federal government can speak up for standards. At least the federal government can speak up for standards that are consistent across the country, can hold people accountable for whatever federal funding they might receive and can be a bully pulpit from which we can have a discussion of why we do not want to be a country in which so many people -- most especially the poorest of our kids -- are poorly educated.

And so if the federal government can do those things I'll be satisfied. And I think both Arne Duncan and Margaret Spellings have tried to do that.

SCHMIDT: We have time for one more question. Go ahead. Yes, sir.

QUESTIONER: (Off mic.) No problem. (Laughter.)

RICE: All right. Just speak loudly. (Laughs.)

QUESTIONER: (Off mic) -- never have a problem making myself heard. (Laughter.)

Thank you very much. My name is Joe Hurd and until February I was at the Department of Commerce. Now I'm actually back in California working for an online education start-up, very similar to -- (off mic).

To what extent during the conversations did technology and innovation come to the forefront? And -- but I'll -- with a bit of a twist, right? You take a look at, say, a homeschooling -- (off mic) -- and take your political opinions -- (off mic) -- it is possible to leverage the computer, online, open-source, openly available course work, open-source material, in order to give children an education. And how much of that -- did the availability of technology play a role in the chance to -- in an effort to leap forward and leap over the traditional -- (off mic)?

RICE: We did have a significant discussion of technology, as you might imagine because of Joel's interest in this area.

LEVY: (Inaudible.)

RICE: Yeah, go ahead.

LEVY: So I think -- I think what we talked about was sort of over time a lot of technology has been put into schools, so if you look -- by 2008 I think there was a three-to-one computer-to-kid ratio in the country, and 70 percent -- more than 70 percent of schools had interactive white boards. And all of that looks great, but a lot of the use of technology to date has been kind of attached -- you know, put into the existing system, so it's not really changing the way that teachers are teaching or that students are learning.

And so I think that there's a lot of efforts more recently that haven't yet been studied but are really exciting. And you probably know about a lot of these, but sort of the ideas of looking at new ways to help people learn. So you mentioned Khan Academy at the beginning, and I think that's a really amazing example of something that can happen that's not attacking what -- it's trying to change fundamentally how people learn. It's not going and sort of changing what happens in an individual classroom right now, but it's really exciting.

And if you apply something like that to what you talked about, homeschooling, or students who are in a school that doesn't have enough demand for AP classes taking AP classes, there's a lot of really exciting companies out there but also sort of efforts to use technology in new ways that haven't really been studied yet. We talked about them as a group and we thought they were interesting, but we --

RICE: Yeah. And even to the degree that you might be able -- I remember an example that was given. You know, when I was in school, everybody had to learn fractions at the same time. Maybe I learned fractions more quickly but could have been helped with long division, which I still can't do very well. And so the ability to even individualize the curriculum for the student within the classroom is something that technology provides.

But I think Julia's point is the important one. Technology provides many, many different possible answers, but you can't graft it onto the way that things are done today. It really -- and that could require more in the way of resources, not for the hardware or the software, but for training teachers to actually be able to use it in a way that would have an impact.

SCHMIDT: Let's take a minute and thank Julia. Julia, of course, now spent -- again, less than a decade -- (laughter) -- lots of time, along with her colleagues, trying to reform education, in what I think was one of the hardest assignments that we can give her. She's now doing something called Culture Craver. And, of course, Secretary Rice, Condi, as she likes to be known, it looks to me like she's going to continue her fine service to Stanford. She's teaching again. She seems to like that a great deal. And I have a feeling that you're gong to be spending a lot more time on education.

RICE: I hope so. Thank you.

SCHMIDT: Thank you all for coming. Thanks, Julia. (Applause.)

LEVY: Thank you. (Applause.)