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DR. MCLAUGHLIN: Death of an American icon, Senator Ted Kennedy. On behalf of the Group, we offer our deepest sympathies to the grieving members of the Kennedy family, especially to the senator's beloved wife and children. On the weekend of September 12, the Group will review Senator Kennedy's political history and his monumental achievements. May he rest in peace.

Issue One: $5 Billion Race to the Top.

PRESIDENT BARACK OBAMA: (From videotape.) Better standards, better teaching, better schools, data-driven results. That's what we will reward with our Race to the Top fund. America will not succeed in the 21st century unless we do a far better job of educating our sons and daughters. DR. MCLAUGHLIN: As children across the nation return to their classrooms this week, one fact is clear: Education is vital for America, and it needs reform. So says the U.S. president.

The centerpiece of the Obama reform is a $5 billion cash surge. It will be used to overhaul America's underperforming schools. The $5 billion will not flow automatically to the U.S.'s 50 states. They must compete head to head and justify whatever money they get.

PRESIDENT OBAMA: (From videotape.) This competition will not be based on politics or ideology or the preferences of a particular interest group. Instead it will be based on a simple principle: Whether a state is ready to do what works.

DR. MCLAUGHLIN: Question: President Obama has an education reform package. Does it foster competition between the states or facilitate federal control over education? Pat Buchanan.

MR. BUCHANAN: It will do both. I mean, the states will compete for the federal money, and that will give the federal government a whip hand here. John, but this is a drop in the ocean, $4 (billion) to $5 billion, in terms of the enormous education budget -- state, local, federal -- we've got right now, George Bush's No Child Left Behind.

I'm a bit of a cynic, but, you know, the test scores have been dropping since 1964 in this country; sometimes up a little bit. Basically the trend line is down -- the collapse of the family. The culture has affected this; you know, some of the kids coming to school without aptitude or interest, and things like that. And I don't think we're getting at the basic problem at all. I think we're just throwing more money to an industry which has fundamentally failed America.


MS. CLIFT: Well, this is the most discretionary money that any secretary of Education has had. In fact, it probably combines the sums that several recent secretaries have had. And to set up a competition among the states in terms of charter schools, innovative projects, I think it's what has made America great, the sort of innovative spirit.

The only down side I see is that you have some states, like Mississippi and Alabama, who don't like federal control and will see this as a dangerous way for the federal government to interfere. They don't like federal standardized tests. And it will just keep those folks at the bottom.

But I think this is a brilliant idea, a race. America loves competition. And our schools need modernizing. If Harry Truman came back and walked into a classroom today, he'd feel right at home because they look just like they did in 1945. DR. MCLAUGHLIN: How do you like the president's education reform plan?

MS. CROWLEY: Well, I like it. On paper, it looks great -- introducing competition, free-market principles into education. This is something conservatives have been arguing for a very long time. The problem is that there is so much money already being thrown at the education system in America; last school year, 2008 to 2009, $667 billion total spent on K-through-12 education, and that doesn't even include the $100 billion extra in the stimulus package going to education.

I think the real challenge here for President Obama -- and on paper, his plan looks great and I support it -- it's got to be all about school choice, school voucher programs, charter schools, introducing more competition at the ground level for our students, because all of the charter schools and voucher programs show increases in tremendous educational outcomes for less cost when you have some competition.

DR. MCLAUGHLIN: Let's get --

MS. CROWLEY: So the challenge here for Obama, though, is to be able to stand up to the teachers' unions, the NEA and the American Federation of Teachers, because they don't like this part of the equation at all.

DR. MCLAUGHLIN: Let's get into that before we turn to Clarence; then he can take it up. What works for President Obama?

What works for President Obama? Competition -- all 50 states in direct competition, racing against each other to enact reform. For any state to access the $5 billion war chest, it must substantively alter its status quo by putting in place the following: One, more charter schools. The schools receive public money, but they are more innovative, with far less bureaucratic regulation.

Two, standardized testing -- a single yardstick to evaluate students in all 50 states, not the scattershot standards of the U.S.'s 14,500 individual school districts.

Three, data mining. Use test results to identify successful teachers, weeding out bad ones.

Four, teachers get paid based on student performance, a/k/a merit pay. Use the market dynamic to reward teachers who get results. Conversely, when students are habitually not succeeding, fire the teacher. Ignore tenure status.

The biggest stick point, of course, is number four, merit pay. Teachers' unions oppose the direct linkage of student test results and teachers' salary. Let's put the teachers' salary aside and talk about standardized testing.

MR. PAGE: Okay.

DR. MCLAUGHLIN: Do you think standardized testing -- that's a single yardstick developed by the federal government for the evaluation of students in all 50 states -- is a good idea, or does it have a down side? Aren't the states supposed to be incubators of change, innovation, new theory?

MR. PAGE: That's right.

DR. MCLAUGHLIN: Doesn't this defeat all that?

MR. PAGE: No, it doesn't defeat all that. Pat's right; there's not that much money to defeat everything. However, there is enough money that the states aren't going to turn down the feds. They're willing to go along with them.

DR. MCLAUGHLIN: But the testing is standardized.

MR. PAGE: Standardized testing. And you know why, John? You know why it's got to be standardized? Because we don't really know what a diploma is worth anymore if we don't have it. And this is something George Bush started. As you know, I talked with Arne Duncan here recently, the new secretary of Education, who came here to Washington from Chicago.

DR. MCLAUGHLIN: And now has his kids in private school.

MR. PAGE: And he will tell you -- one of the first things he will tell you is that George Bush's biggest contribution was in getting some kind of standard nationally so we know whether diplomas work. Too many kids weren't able to read their own diplomas. But you're also right; there's a danger if you start teaching to the test, and that's a problem we have seen happen here and there.

DR. MCLAUGHLIN: What about --

MR. PAGE: And you don't want that to happen. But there is some value to it. DR. MCLAUGHLIN: What do we think of having a dossier on every child, every Johnny, every Sophie who goes through school for inspection on how they performed on their essays? I mean, how much more --

MR. PAGE: You make it sound so dire, John.

DR. MCLAUGHLIN: How much are we going to have --

MR. PAGE: You and my son would have a good time discussing conspiracy theories.

DR. MCLAUGHLIN: -- people's backgrounds kept by the federal government?

MR. PAGE: (Laughs.) You make it sound so dire, John. No, you've got to have some way --

DR. MCLAUGHLIN: Do you want that --

MR. PAGE: You said you want merit pay, right? How are you going to judge merit pay if you don't look at how effective the teachers are?

MS. CLIFT: Well, and --

MR. PAGE: And that's one thing that Duncan has made progress on with the teachers' unions --

DR. MCLAUGHLIN: I'm talking about standardized testing.

MR. PAGE: -- because there's so much pressure against that.

MS. CLIFT: In the old --

MR. PAGE: That's all part of it.

DR. MCLAUGHLIN: There are arguments on both sides.

MS. CLIFT: In the old days, the dossier was called a report card. (Laughs.)

MR. PAGE: Thank you. That's right. (Laughs.) You have to --

DR. MCLAUGHLIN: But those are all now available on the computer under this new program --

MS. CLIFT: Yes, yes, and --

DR. MCLAUGHLIN: -- by the federal government.

MR. PAGE: Not by name, though, by individual. DR. MCLAUGHLIN: By name. By name.

MR. PAGE: But not to the public.

MS. CLIFT: The first --

DR. MCLAUGHLIN: Not to the public, but it's there for inspection by the CIA or any --

MR. PAGE: How are you going to grade the schools, John?


MS. CLIFT: The first President Bush, George H.W. Bush, called himself the education president, and he proposed a federal standard. And he was defeated, probably within his own party, and everybody set up their own standards. And governors dumbed down the tests to make sure they had better numbers. And it's completely phony. Unless you have federal national standards, you really don't know how you're competing. And if we're going to compete in a globalized society, we have to turn out students who are going to be able to make it with those standards.

MR. BUCHANAN: But let me just say -- you say, you know, if the teacher doesn't produce, fire the teacher. Sometimes the kids are not good students. Sometimes you've got wonderful teachers in very difficult schools. "Blackboard Jungle" -- you remember that, John? And some of these kids -- I mean, teachers are doing their best --

MS. CLIFT: That was the 1950s. (Laughs.)

MR. BUCHANAN: Yeah, but --

MR. PAGE: That school was easy, Pat, compared to some of the schools out there now.

MR. BUCHANAN: Right. That's like a day care center compared to what they are now.

MR. PAGE: Yeah.

DR. MCLAUGHLIN: So there should not be any automatic control over the teachers --

MR. BUCHANAN: No, but John, when you --

DR. MCLAUGHLIN: Why don't they leave it to the superintendent of the school? Why don't they leave it to the principal in the school to decide --

MR. BUCHANAN: Well, some of the schools -- some of these report cards now are phony. You find out the kid gets all As, and he takes a tough test and he can't pass it. I do agree -- we used to have national merit scholarship things when we were in high school in those days, standardized tests nationwide, and that really weeded folks out.

MS. CROWLEY: There's another part of this equation that we haven't talked about, which is parental responsibility here and having parents becoming increasingly involved and interested in their own children's education, which has been on the decline for a long time.

MS. CLIFT: Nobody's against that. Nobody's against that.

MS. CROWLEY: On the question of --

MR. PAGE: It's worth looking at what Duncan did in Chicago, like just for first-day attendance, over a month in advance working with the parents to get the kids out, and they improved year by year the attendance substantially. And, I mean, there are things you can do to get parents more involved.

MS. CROWLEY: Exactly. And also, on the question of federalism and should the states be incubators, on Obama's proposal about putting out this $4 (billion) to $5 billion to have the states compete, there have been at least four states -- I know, off the top of my head, Massachusetts, Rhode Island and Tennessee -- who have put legislation in place to increase the number of charter schools because they want to be able to compete for that money.

So the real question is, will these states follow through? If they get the money, will they follow through on charter schools? And that's yet to be determined. But I hope that's the case.

DR. MCLAUGHLIN: Okay. Education is essential.

PRESIDENT OBAMA: (From videotape.) In a world where countries that out-educate us today will out-compete us tomorrow, the future belongs to the nation that best educates its people.

DR. MCLAUGHLIN: Which nations best educate their students? In a global study of science education of 15-year-olds, the U.S. ranked 29 -- repeat, 29 -- out of 57 countries. China, Japan and Korea are well ahead of us, as well as ex-communist nations like Latvia, Croatia and Slovenia. Question: Education is the key to competitiveness in the workforce. That's what Mr. Obama tells us. But no amount of education will keep U.S. jobs here. All we will have is a highly educated pool of unemployed people. Data shows that jobs for college- educated are rapidly being outsourced to cheaper labor markets. So education is not the key to competitiveness in the workforce. Pat Buchanan.

MR. BUCHANAN: John, first off, we saw all the manufacturing jobs for these kids that don't graduate from high school or just get out of high school -- great jobs. They're gone. Now, Alan Blinder, the economist, said 30 (million) to 40 million white-collar jobs -- accountants, people doing medical diagnosis -- all these other jobs can be done abroad. You just send it by computer. Thirty (million) to 40 million are at risk.

We've got one of the highest standards of living in the world, and these jobs are going to go to places, quite frankly, where they don't have to pay as much money and they can get an equal amount of good work done.

MS. CLIFT: Yeah, but every study you read shows people do better if they have high school education, much better if they have a college education, even better if they have a graduate degree. I don't think you can take that away even with your argument that these jobs are going overseas.

And then you have to look at the rest of the president's education proposals, and that is the community colleges. And he's putting a lot of money and a lot of energy into community colleges to train people for the jobs that will exist. And here we get into the green economy. I know you can say it's rubbish. (Laughs.)

MR. BUCHANAN: Well, a lot of this --

MS. CLIFT: But the green economy is coming and retrofitting, and there's going to be --

MR. PAGE: And not just the green economy.

MS. CLIFT: The 21st version of those manufacturing jobs are going to come back.

MR. PAGE: Right, $10 billion more that we've spent on education since the GI Bill. And we're talking about community colleges. We're talking about medical technology, nursing, police and firefighters, people going back to school for continuing education. It's a really diverse student body out there. And this is --

MS. CLIFT: Geriatric care is going to be big.

MR. PAGE: Geriatric care. Thank you. MS. CLIFT: (Laughs.) Right.

MR. PAGE: A lot of us geriatrics are going to be going there too. (Laughs.)

DR. MCLAUGHLIN: Exit question: If education is not the answer, what is, Pat Buchanan?

MR. BUCHANAN: What is to the American economy?


MR. BUCHANAN: Economic nationalism.

DR. MCLAUGHLIN: The workforce.

MR. BUCHANAN: Oh, for the workforce? John, I'll be an honest. I don't have -- I mean, I don't think education is the answer. I believe the United States has got to make itself, as a nation, separate from other countries, because, quite frankly, if you want to maintain the highest standards on earth, you cannot have cheap products coming in and all your jobs going out.

DR. MCLAUGHLIN: What about Ross Perot and what he had to say?

MR. BUCHANAN: Well, Ross Perot was very true when he said that, you know, you can get workers for $2 a day in Yucatan. And that's where they've gone. They've gone to China. All those jobs are -- these white-collar jobs, John --

MR. PAGE: You've got folks at Wal-Mart, Pat.

MR. BUCHANAN: Oh, sure. We're going to --

MR. PAGE: The pitchfork brigades are going to be at your door saying, "I want my cheap clothes. I want my computer laptop."

MR. BUCHANAN: They're going to be made -- they're all made in China, yeah. And the salesmen will be in Wal-Mart, but they're all made in China.

MR. PAGE: That's where education comes in, because the more education you've got, the more choices you've got in life, just to repair those computers and cars, et cetera.

MS. CLIFT: Economic protectionism and pulling in and building --

MR. BUCHANAN: (Inaudible) -- this country.

DR. MCLAUGHLIN: Let her finish. MS. CLIFT: Building a moat around the country is not the answer in the 21st century. The answer is education and innovation, and Americans have been very good at that in the past.

MR. BUCHANAN: Economic nationalism built America.

DR. MCLAUGHLIN: What about --

MS. CROWLEY: I totally agree with Eleanor on this.

MR. PAGE: Oh, my goodness. (Laughs.)

MS. CLIFT: We've come to the day. (Laughs.)

MS. CROWLEY: Education is the key. The United States cannot remain the world's global superpower without a highly educated workforce. But you've got to couple that with an understanding that not every kid is bound for college or should go to college. So you've got to put a stress on trades and the vocations.

DR. MCLAUGHLIN: What about a level playing field, which is what Ross Perot insisted on, and fair trade?

MR. PAGE: That's why Ross Perot did so well in his presidential run, right?

MR. BUCHANAN: John, you're exactly right.

DR. MCLAUGHLIN: (Inaudible) -- the right ideas.

MR. PAGE: I've always supported fair trade. But, you know, the fact is, we are in a global economy.

DR. MCLAUGHLIN: That means the rule of law.

MR. PAGE: And really, protectionism --

DR. MCLAUGHLIN: It means environmental standards, exactly what we have here. We should make those worldwide.

MR. BUCHANAN: Do it, John. The Chinese -- you're exactly right. You put environmental standards here, tough ones.

DR. MCLAUGHLIN: Workplace safety. MR. BUCHANAN: Workplace safety -- all those on American business. The price and cost of producing here goes up. You move the factory to China; you avoid all that. And the goods come back --

MR. PAGE: Inasmuch as we owe everything to China, we're not going to be able to put much pressure on them.

DR. MCLAUGHLIN: You're not taking into consideration the unions. Don't you understand?

MR. PAGE: Oh, I am taking into consideration the unions. And look at how unions have been flat on their back for so many years because of Taft-Hartley and other stuff. But that's another argument. But the fact is --

DR. MCLAUGHLIN: So you think education is the key.

MR. PAGE: Education is still the key, John, and will continue to be --

DR. MCLAUGHLIN: So a competitive workforce --

MR. PAGE: -- because America has grown not through protectionism but through innovation. We are the innovative nation, even if we don't get as many straight-A kids and more gentlemen's Cs.

MR. BUCHANAN: Yeah, but we were the most protectionist nation on earth until 1948.

DR. MCLAUGHLIN: For personal self-growth, education is great.

MR. BUCHANAN: I think education is a good thing. I do.

MS. CLIFT: It's not 1948 anymore.


DR. MCLAUGHLIN: Don't over-extend yourself here, Pat.

MR. BUCHANAN: If you think salvation lies there, what has happened the last 50 years?

MR. PAGE: Well, we fell behind on some -- jobs are dynamic.

DR. MCLAUGHLIN: Do you think that Obama was motivated at all by the fact that the teachers' union is so radically left?

MS. CLIFT: The teachers' unions --

MR. BUCHANAN: I think Obama is well-motivated on this, but I do think he is responsive to pressure.

DR. MCLAUGHLIN: You don't think he realizes that the teachers' union is his constituency, lock, stock and barrel? MR. BUCHANAN: Oh, sure -- the teachers' union, NEA.

DR. MCLAUGHLIN: Do you think this is pork for them? Is that why he did it?

MR. BUCHANAN: Partly pork -- all of it's partly pork.

MR. PAGE: It's not pork, because he's also gotten them to bend on merit pay.

MS. CLIFT: Right.

MR. PAGE: And that is a key.

DR. MCLAUGHLIN: Issue Two: The 51st State?

SECRETARY OF STATE HILLARY CLINTON: (From videotape.) What I want is for Puerto Ricans to have the same rights as other Americans to determine your future.

DR. MCLAUGHLIN: Since 1898, 111 years ago, the end of the Spanish-American War, Puerto Rico has been a possession of the United States. Politically, for the last 57 years, since 1952, Puerto Rico has been a commonwealth, a self-governing entity but not a state of the United States. And now it is one step closer to becoming the 51st state of the United States.

Puerto Rico has a population of 4 million and a GDP of $70 billion, ranking 79 out of 229 countries, ahead of nations like Oman, Uruguay, Jordan. It is roughly the size of Connecticut. Puerto Rico has a representative in the U.S. House of Representatives named Pedro Pierluisi. Pedro is called resident commissioner of Puerto Rico. He is allowed to serve on House committees but not vote on the House floor.

In May, three months ago, Representative Pierluisi introduced a bill called the Puerto Rico Democracy Act of 2009. Last month the House Natural Resources Committee approved the measure by a vote of 30 to 8. The bill authorizes Puerto Rico to set up two referenda for Puerto Ricans to vote on. The first asks whether Puerto Ricans want to keep their current political status of commonwealth, yes or no.

If a majority chooses no -- "We want a change" -- a second referendum will be triggered. Puerto Ricans will then decide whether they want to become an independent nation or a U.S. state with full U.S. state rights, or an associated sovereignty -- still a part of the United States, but not a state, and more independent than it is now.

Okay, the politics. Puerto Rico is rootedly democratic, not Republican, and it is even more proudly so since one of their own heritage has just taken a seat on the United States Supreme Court, Justice Sonia Sotomayor. If Puerto Rico chooses to become the 51st state, that would mean two more Democratic senators in the United States Senate and at least six new Democratic representatives in the House of Representatives.

Question: What is President Obama's position on Puerto Rico's status? Do you know, Monica?

MS. CROWLEY: Well, I would assume that, since he's a liberal Democrat, he would love to have full-blown statehood for Puerto Rico, for the reasons you've just laid out.

DR. MCLAUGHLIN: Wait a minute. You think he's a political animal? (Laughter.)

MS. CROWLEY: He's a totally political animal, as is every American president, John. They're the president as well as the leader of their party. So he would actually be remiss politically if he didn't argue for that. I have not heard him go at it very strongly in terms of this position, and I really don't think he needs the headache right now.

MS. CLIFT: The appropriate position is to be hands-off. It's up to the people in Puerto Rico. And I would be amazed if this legislation saw the light of day.

MR. BUCHANAN: It is --

MS. CLIFT: Look, I live in the District of Columbia. We don't even have representation, because that would be too political.

DR. MCLAUGHLIN: What's the advantage in Puerto Rico becoming a nation?

MR. BUCHANAN: That's an excellent idea. Puerto Rico should have been let go just like the Philippines. It is a small nation. It is an entirely different nation than the United States.

DR. MCLAUGHLIN: But they don't want it, apparently.

MR. BUCHANAN: Well, look, but what we want --

DR. MCLAUGHLIN: There's been no plebiscite. MR. BUCHANAN: What do we want in the other 50 states? We've got a right to decide. I don't think America should become an official bilingual nation, because that is an empire, not a country.

MS. CLIFT: You know, you're alone in that position.

MR. PAGE: (Inaudible) -- Mexico -- I mean, Puerto Rico wants to be a state, really. Every referendum tends to point in that direction. Full independence gets maybe about a third, I think.

MR. BUCHANAN: No, independence gets nothing. Commonwealth gets almost 50, Clarence.

DR. MCLAUGHLIN: So you're in favor of it becoming the 51st state.

MR. PAGE: Well, I favor them becoming a state. But I agree with Eleanor that with the District of Columbia, you know, Democrats always say they want statehood for the District, but it never quite happens. It's not going to happen in the foreseeable future in Puerto Rico.

DR. MCLAUGHLIN: Well, how does that affect the Miss Universe -- (inaudible) -- Puerto Rico?

MR. PAGE: You're still going to have a Miss Universe in Puerto Rico.

MR. BUCHANAN: And the Olympic team, John.

DR. MCLAUGHLIN: They can't become a state, or they can.

MR. BUCHANAN: John, that would add eight electoral votes to the Democratic Party every presidential election.

Issue Three: Meltdown Blues.

The last 20 months have been brutal for the global economy. But the last 120 months, a decade, have been productive for the world in some respects. In 1999, the world's average GDP per capita was just under $6,200. Today it is now just under $10,400.

In 1999, the average American made $33,000 per year. Today it's $47,000 per year. The wealthiest country in the world in 1999 was Luxembourg, with a GDP per capita of $49,000. Today Liechtenstein is the world's wealthiest country, but with a GDP per capita of $118,000 per year.

And the positive news doesn't end there. In 1999, the number of people in the world living on $1.25 or less a day -- what the U.N. calls extreme poverty -- was 34 percent. The most recent figure has it at 25 percent. Question. Two postulates: One, the global economy has been in meltdown for the past 20 months. Two, the global economy has spiked in wealth for the past 10 years. What's the real economic story? Is it one or two? I ask you.

MR. PAGE: The real story is one of diversity, John, because you find some areas where growth is continuing, including China and India. Their growth rate has slowed, but they haven't really been brought down by the recession in the West. On the other hand, nations where you do have extreme poverty, we have seen some bright spots of trade and development, especially in the continent of Africa, but it's been slow.

But I think on the whole, though, we can see that the global economy is on a growth slope. (Laughs.) At present, though, the recession has been slowing everything down.


MS. CLIFT: We've made enormous gains in the last decade, but the global slowdown has really hit people. And the IMF says 50 million people have been submerged into extreme poverty. And in a country like India, where they have 200 million people -- I mean, these numbers are hard to comprehend -- living just above the poverty line, they are now facing the danger of going under.

So I think the generational impact -- because the people now that get forced into this really extreme poverty, they take their children out of school. They can't afford health care. So it has an impact on the following generation and really undoes a lot of the good things that have happened over the last decade.

MR. BUCHANAN: China and India -- the brick countries, China, India, Russia and Brazil, have really done well; especially their middle class and upper class have done tremendously well. The elites in the West, in Europe and all the rest, in the financial industries have done enormously well for those 10 years.

But you take the working folks, the working class in America, you take the lower middle class in America in these areas, they have been stagnant or they have been dropping and dropping for years, because these are the folks who have been hurled into competition with Chinese, Indians. These guys will work for far less. They're hard workers, industrious, smart. So this is -- it's a real diverse picture.

DR. MCLAUGHLIN: So the stateless global elites in Larry Summers' --

MR. BUCHANAN: Oh, they've done tremendously.

DR. MCLAUGHLIN: They've done tremendously. MR. BUCHANAN: Yeah. This is their world.

MR. PAGE: Yeah.

DR. MCLAUGHLIN: But the average worker --

MR. BUCHANAN: Average western worker is really getting pressed. Look, even in Europe they're cutting back on the welfare states and things because they can't afford it when these guys are working and competing with the workers in the Third World.

DR. MCLAUGHLIN: So when we hear that per capita has gone up, we really have to be careful what per capita means.

MR. PAGE: That's right.

DR. MCLAUGHLIN: Per capita suggests that everybody's gone up. That's not true at all.

MR. BUCHANAN: Not true at all.

DR. MCLAUGHLIN: There's a wide variation.


MS. CROWLEY: Right. But the general global trend, as you pointed out, has been going up significantly for the very reason that Pat points out, which is China and India. They have moved toward greater free-market systems, greater capitalism. And that has lifted more boats than anything.

DR. MCLAUGHLIN: Out of time. Bye-bye.