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Obama Introduces to Chicago's School Chief as Education Secretary; Crunching New Numbers; Push for Impeachment for Illinois Governor
Aired December 16, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: It is Tuesday, December 16th in the CNN NEWSROOM.
Here are the top stories that we're following for you this hour.
Well he gets much of the credit for fixing Chicago's broken public schools. And live this hour, the man Barack Obama has chosen for education secretary.
Caution, falling prices. They are plunging at a record pace. Is that a good thing? Well, the CNN money team fills us in on that.
Plus this --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: For most people this is 100 percent of their liquid assets. They're now wiped out, penniless. They need money to live on.
(END VIDEO CLIP)
NGUYEN: Stunning disbelief, a prominent Wall Street trader accused of swindling billions from rich and famous investors.
Good morning everybody. I'm Betty Nguyen in for Tony Harris today. And you are in the CNN NEWSROOM.
He is a fellow Chicagoan and basketball buddy. The president- elect is set to nominate Chicago's school chief as his education secretary this hour.
CNN's Brianna Keilar is in Chicago. She joins us now live.
What do you know, Brianna, about Arne Duncan?
BRIANNA KEILAR, CNN CORRESPONDENT: Arne Duncan is in charge of Chicago Public Schools. And in fact, this announcement we're expecting is going to be happening at a Chicago public school that has turned around here in the last couple of years.
Chicago Public Schools, the third largest school district in the nation. And Duncan is really someone who is palatable, not only to teachers' unions, but also reform-minded people, people who are into education reform. He's also someone who has a personal connection to Barack Obama. He plays basketball with the president-elect. In fact, he's got a very varied resume. He played professional basketball in Australia.
And Betty, CNN has also learned that President-elect Obama is going to be settling on his pick for the interior secretary. That's expected to be Senator Ken Salazar of Colorado. This is someone who would join that energy, environment and natural resources team that we heard President-elect Obama announce yesterday as part of what he talked about, an all-hands-on all-hands-on-deck approach when it comes to energy independence. And we're expecting that announcement again later this week -- Betty.
NGUYEN: All right. And during this news conference, no doubt, I imagine the situation in Chicago, those politics there, the governor of Illinois, that name may pop up?
KEILAR: Yes. And this has been popping up, of course, in every press conference the president-elect has had since Illinois Governor Rod Blagojevich was indicted.
Of course, the big news yesterday afternoon was that the Obama team is delaying the release of an internal investigation into communications between the Obama staff and the governor's staff, any communications about who Obama's successor in the Senate will be. And that really means that the scandal is continuing to be an unwelcome distraction. We're expecting it will be today as it was yesterday, if you take a listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: There is nothing in the review that was presented to me that in any way contradicted my earlier statements that this appalling set of circumstances that we've seen arise had nothing to do with my office, and that those facts will be forthcoming to all of you in due course.
(END VIDEO CLIP)
KEILAR: And the delay of this report actually at the request of the U.S. attorney, who is pressing -- or pushing charges against Blagojevich, Patrick Fitzgerald. But really, the fact that it is at the urging of the U.S. attorney and not just that the Obama team, doesn't quell the curiosity. In fact, it may heighten it a little bit. There's still some unanswered questions, and people want to know just what those communications were between the two camps -- Betty.
NGUYEN: And no doubt those questions will be asked.
OK. Brianna Keilar joining us live.
Thank you, Brianna.
And you can see President-elect Obama's news conference in the CNN NEWSROOM, 11:45 Eastern, 8:45 Pacific, live from Chicago's Dodge Renaissance Academy. Don't miss it.
Also, after the news conference, I'm going to talk with Roy Romer, the former Colorado governor and superintendent of Los Angeles schools. He's currently heading up the advocacy group Strong American Schools. So stay tuned for that as well.
This is also making news today. The fever-hot inflation of summer has definitely cooled for late fall. Prices took a record plunge in November.
Christine Romans, part of the CNN money team, is in New York for us.
Christine, kind of afraid to ask, but you know, we've got to talk about the numbers today. How much of a plunge was it? And how will this affect this afternoon's Fed decision.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, this is inflation, something all of us feel, something all of us are very aware of. The fact that gas prices have come down so much, that's driving a decline in inflation. The Consumer Price Index tumbling 1.7 percent.
These, Betty, are history-making numbers day after day. This economy making history. Again, this is the biggest drop in prices since record keeping began in February 1947, two months in a row now of a record drop.
This means that what you're paying with your credit card, with your cash at the mall, for an airline ticket, again and again, you're paying less than you were the month before. So that's good news.
But the reason why you're paying less is because the economy is just so weak, the demand is dropping off and those prices are falling. And of course, longer term, it can be a sign, it can raise fears of deflation, which can be very dangerous for an economy.
Housing starts also tumbled here. So all of this, Betty, is what the Fed is talking about.
The Fed has all this history-making data to talk about. Personal bankruptcies up 30 percent over the past year. A million people filing for bankruptcy over the past year. Almost two million jobs have been lost this year. Home foreclosures are accelerating.
The Federal Reserve Board, after this two-day meeting, at 2:15 Eastern Time this afternoon, is expected to cut interest rates again. They have been cutting interest rates for more than a year to calm this economy. They've been injected funds into the system, they've been buying up short-term debt. They have bailed out financial firms. They have spent hundreds of billions, more than $2 trillion, in all of these different measures to try to shore up the economy.
The Fed funds rate today is at 1 percent, already historically low. They're expected to cut it in half. The prime rate at 4 percent. If they lowered that as well, that would lower the rate that's tied to all kinds of different loans that you get. It would lower the cost of borrowing for you.
What does it mean for you, all of this? It means that the economy is very weak. It means that these are still recessionary kinds of numbers.
Many economists are telling me they're not showing any signs of bottoming. It means the Fed is really sitting there with a big plate of negative economic data and trying to find ways to heal the economy and shore up the financial system.
NGUYEN: Yes, but Christine, let me ask you this. It's only at 1 percent right now. If you cut that in half, you know, you're at half a percent. Are they running out of options, out of things to do to try to fix this situation?
ROMANS: They have been cutting monetary -- they've been cutting interest rates for a very long time now very dramatically, and the economy is still quite weak. It's what they say they're going to do outside of cutting those interest rates that people are very interested in, because you're right, they don't have a lot more to move on the rate front here. I mean, how much cheaper can money become to borrow?
NGUYEN: Right. Yes. OK.
Christine Romans breaking it down for us.
Thank you, Christine.
ROMANS: Sure.
NGUYEN: And one other note on the economy. The White House told us this morning, no announcement on the auto industry is imminent. General Motors and Chrysler say that they are on the brink of bankruptcy and need federal loans to survive into 2009. Now, negotiations on the size of the loan and concessions, well, they've been going on since the bailout bill collapsed in Congress last week.
Illinois Governor Rod Blagojevich signals that he will not go down without a fight, but it is going to be one tough battle.
Our Ed Lavandera is on the case in Chicago.
And Ed, we understand state lawmakers are gathering right now to talk about impeachment?
ED LAVANDERA, CNN CORRESPONDENT: Right. And they are doing that right now.
They actually voted last night, the House here in the state of Illinois, voted unanimously, 113-0, zero to begin the impeachment proceedings against the governor of Illinois. And essentially what we're seeing right now is almost like a stalemate, see who's going to blink first. The governor's people giving every indication that he has no plans of resigning at this point. So, state lawmakers here, many of them who have been calling for the governor's resignation intensely over the last seven days, say they had no choice but to begin these proceedings.
Of course, impeachment proceedings isn't anything that can just happen from one day to the next. This will take weeks to complete. Once the House votes on impeachment, it will then have to go over to the state Senate for the trial there, if you will. So, this is a process that will take some time.
And, of course, many lawmakers are saying that they could avoid all of this drama if the governor would just simply resign his seat immediately to avoid all of this. But they are not giving any indication that that's going to happen. In fact, the governor's attorney, speaking last night, said that they're ready to put up a good fight.
(BEGIN VIDEO CLIP)
ED GENSON, BLAGOJEVICH'S ATTORNEY: The case that I've seen so far is significantly exaggerated. It's just not -- it's not what people think it is. And we'll have time to talk about it.
(END VIDEO CLIP)
LAVANDERA: So what is the governor doing? As everyone around the state is talking about his situation, well, he's going on business as usual.
He had left his home this morning, had gone over, we presume, to the governor's office here that he uses in Chicago. In fact, we were told yesterday by a spokesman that the governor spent most of the day working on state business, including signing some legislation.
In fact, one piece of legislation that he signed yesterday was a piece of legislation that was brought up in the criminal complaint against him, where basically investigators had accused him of trying to accept a bribe in support for this legislation. So the business continues, at least the governor here in Illinois trying to put on a business-as-usual front -- Betty.
NGUYEN: Very interesting. All right. Ed Lavandera joining us live.
Thank you, Ed.
(WEATHER REPORT)
NGUYEN: You know, a quick reminder for you right now. I want to tell you that President-elect Obama is expected to unveil his choice for secretary of education this hour. You can see that news conference in the CNN NEWSROOM. It's 11:45 Eastern, 8:45 Pacific, live from Chicago's Dodge Renaissance Academy.
So don't miss it.
Meantime, though, dynamite in an upscale department store? It is sending holiday shoppers fleeing. So what happened?
(COMMERCIAL BREAK)
NGUYEN: All right. Some live pictures right now out of Illinois. This is the House there, as they are conducting impeachment proceedings right now, dealing with, obviously, Governor Rod Blagojevich, who faces charges in dealing with the possibility of him trying to sell President-elect Barack Obama's Senate seat. So those impeachment proceedings taking place at this hour.
Of course, we're going to continue to follow that and bring you the latest.
In the meantime, though, a vacation trip turns deadly in Israel. A bus veers off a desert road and right into a ravine. Look at this.
Sixty people were on board at the time. At least 22 of them killed. It happened in the southern part of the country. That tour bus was actually taking tourists from St. Petersburg, Russia, to the Red Sea Resort.
Well, holiday shoppers were quickly evacuated from one of Paris' most famous department stores today after explosives were found. So who put them there and how dangerous was it? Well, CNN Senior International Correspondent Jim Bittermann joins me now live.
Jim, explain how these explosives were actually discovered.
JIM BITTERMANN, CNN SR. INTERNATIONAL CORRESPONDENT: Well, in fact, Betty, it came in the form of a warning letter that was sent to Agence France-Presse, which is the largest news agency here in Paris. They received a letter this morning and said that on the third floor of that department store, which is one of the oldest department stores and one of the largest in Paris, they would find explosives in a toilet.
And in fact, police then evacuated the store and went around with bomb-sniffing dogs. And they did indeed find five sticks of dynamite bundled together in the toilet, but there was no detonator connected to the dynamite.
Now, this would be kind of taken lightly, except for the fact that the letter was very threatening. It said that unless French troops are withdrawn from Afghanistan by the end of February, the people that perpetrated this morning's event would, in fact, come back, and this time there would be no warning. And suggesting that, of course, the next time it would be a real bomb that was found.
So, while the interior minister said today that there was no threat really from today's incident, there's a great deal of worry here about what the future may hold. The French have about 3,000 troops in Afghanistan, and this is not the first time they've been threatened. But this is going to really affect public opinion here, which has been kind of turned against their involvement in Afghanistan ever since 10 French troops were killed there back in August -- Betty.
NGUYEN: Well, Jim, OK, let's get back to the people who sent that letter. The Afghan Revolutionary Front is the name of it.
What do you know about this group?
BITTERMANN: Well, no one knows much about this group. In fact, the interior minister herself said that she was unfamiliar with this group.
Terrorism experts are a little bit perplexed by all of this because of several factors. First, the group is unheard of. Secondly, the kind of explosives that were used, sticks of dynamite. And thirdly, the idea that this wasn't a real bomb that was planted.
So they're a little bit puzzled as to exactly who might be behind this. But clearly, the threat is being taken very seriously, and certainly being taken seriously by those who are out trying to celebrate the holidays and do a little shopping this year -- Betty.
NGUYEN: Yes, it is a frightening thought.
All right. Jim Bittermann joining us live.
Thank you, Jim.
All right. Imagine the scenario -- you are called in and then told to get out. Suddenly, you are a statistic. So what do you need to know about being laid off before you make another move?
(COMMERCIAL BREAK)
NGUYEN: All right. So there are few things that are scarier than losing your job. And while there's no way to guarantee that you'll be safe from recession layoffs, you can at least know what to do should HR come knocking.
So, Gerri Willis is here where her part two of her "Surviving a Layoff" series. So very important.
OK, Gerri. So what should people expect?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, yes, I think that's the big question. Hi there, Betty.
Mass layoffs at big companies like the ones you hear about every day, they're highly orchestrated by attorneys to keep the company's legal liabilities to a minimum. Normally you'll have some sort of exit interview with your manager. If the employer asks you to sign a release form in order to get severance, it's a good idea to have it looked over by an attorney.
Now, the good news here, this is your opportunity to get a referral. Do it. Who can turn you down at this time of year?
Next, call the payroll department. Find out what the company currently owes you. This is critical for folks who are paid on commission. This is not a phone call that you want to make from your kitchen next week. Do it now.
NGUYEN: OK. And as you gather your things, because, you know, that's something that you have to do when this happens, what do you know what to take? I mean, what should you leave behind? What should you bring? Obviously, your personal stuff you want to take.
WILLIS: Great question. You know, the reality is you may not be allowed to take too much.
Look, leave the company laptop, PDA. But take your personal effects like photos. Look, even getting your Rolodex out at this point may be tough. Yes, because the security guards will stop you for anything they see as company property.
NGUYEN: But even if those are your contacts and your numbers?
WILLIS: Well, here is my thought on this. You get this Rolodex out before the layoff. There's certainly lots of rumors before it happens. You need to get your personal information out first.
And look, if you take things that are considered company property, it could jeopardize any kind of severance pay that you might get anyway. So you want to make sure you pay attention to the details here.
NGUYEN: Yes, absolutely.
WILLIS: Also, you know, one other thing to think about here, if you -- you know, sometimes it's not a big company where it's highly orchestrated. Sometimes you come to work and there's a padlock on the front door and it's over.
There's a federal law to protect you called the Warren Act. It requires employers to give 60 days' notice and pay people through this period. If you have a problem with pay, call the Labor Department at 1-866-4-US-WAGE. There is backup here.
NGUYEN: Well, that's good to know.
OK. So, once you have been shown the door, shall we say, you've got your box full of goods, what do you do next? Do you file immediately for unemployment?
WILLIS: Yes. Look, it takes three to three weeks to get it anyway. So the sooner you file, the sooner you get your money. The truth is, you'll be lucky if jobless benefits cover a third of your salary.
Look, the average worker gets about $293 a week. But it's of course based on your earnings. And benefits have been extended. They're longer now than 26 weeks.
Go to workforcesecurity.doleta.gov to find your state's unemployment insurance Web site. It will tell you how much -- how many weeks of employment you're up for.
If you have a job-related question though, send it to me at gerri@cnn.com. The devil is in the details here, and we are combing through all of them trying to get you the best answers in the event of layoffs.
NGUYEN: Well, this was definitely good stuff today.
Gerri, we do appreciate it. Thank you.
WILLIS: My pleasure.
NGUYEN: As the most serious credit crisis in decades does rock your finances, well, cnnmoney.com has some advice for you. Also some important answers. So check out our special report "America's Money Crisis." That's at cnnmoney.com.
He was a trusted, respected Wall Street veteran. And investors say he was also a swindler.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: For most people, this was 100 percent of their liquid assets. They're now wiped out, penniless. They need money to live on.
(END VIDEO CLIP)
NGUYEN: Bernard Madoff, the shocking scope of his alleged fraud.
(COMMERCIAL BREAK)
NGUYEN: Take a look. Live pictures now from Springfield, Illinois, where the House Impeachment Committee is holding its first meeting today to discuss the criminal charges against Governor Rod Blagojevich. Illinois lawmakers voted to create this committee that could remove Blagojevich from office. As you'll recall, he was arrested on federal corruption charges a week ago.
The president-elect is about to announce his choice for education secretary, and take a few questions from reporters.
CNN's Jessica Yellin is with the Obama transition team in Chicago.
And Jessica, you're at a Chicago success story, shall we say, the Dodge Renaissance Academy. Talk to us about what's behind that success there.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, this is one of the schools that Arne Duncan, the man that President-elect Obama has chosen to name as his secretary of education, has championed. This school was closed in 2002 because it was failing. And when Duncan came in to run public schools here in Chicago, he reopened it with a new focus that included longer days for some teachers, specialized focus on individual instruction with kids in their classrooms, and also teacher training, pairing an experienced teacher with a person who is studying education and learning to enter the school system.
And all this has come together to lead to higher test scores, a better graduation rate, and overall model for what he's tried to do throughout the school district here in Chicago. This school is an example of one of the reasons, clearly, Obama believes that Duncan is a good man to run his Education Department.
And one of the things I should point out, Betty, about this man is, he's a guy who is known as both a reformer and a risk-taker, but also gets along both with the teachers' unions and folks who try to charter schools and try new things. For example, he's in favor of pay for performance. That's a controversial position for a lot of folks, paying teachers who get students to perform better in the classroom.
So it points to a new direction, points to an openness to reform for the Education Department. And I should also point out that Duncan and Obama are quite good friends. They've been playing basketball together for many years. In fact, Duncan was one of the folks he played basketball with on Election Day -- Betty.
NGUYEN: Yes, and Duncan used to be a -- what -- a professional basketball player overseas for a little while?
I want to ask you this: What is the reaction to the news that he is Obama's pick for education secretary?
YELLIN: So far positive. The folks on -- even Margaret Spellings, the current education secretary, a Republican, has praised Duncan. So, so far all sides are praising him.
I'm sure there are those who object to some of his more controversial positions. For instance, he backed the creation of a gay-friendly school, a school that would have been opened to people who have been bullied and to gay and lesbian students. And that has raised the ire of some conservative groups.
But other than that, he is considered a very well liked figure -- Betty.
NGUYEN: CNN's Jessica Yellin with all the information.
Thank you, Jessica.
And you can see President-elect Obama's news conference in the CNN NEWSROOM 11:45 Eastern, about 15 minutes from now, 8:45 Pacific, live from Chicago's Dodge Renaissance Academy.
The celebrated Wall Street trader, Bernard Madoff, has a court hearing this afternoon. He is accused in a stunning $50 billion pyramid scheme. The scope of the alleged fraud touched investors from corporate executive suites, to the U.S. Senate, even to Hollywood.
Here is CNN senior correspondent, Allan Chernoff.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Since the arrest of Bernard Madoff, the list of high-profile victims continues to grow: U.S. senator Frank Lautenberg, Fred Wilpon, owner of the New York Mets and Mort Zuckerman, owner of "U.S. News & World Report" had a charitable trust invested with Madoff.
Some victims had entrusted their life savings.
BRAD FRIEDMAN, MILBERG LAW FIRM: For most people this was 100 percent of their liquid assets. They're now wiped out, penniless. They need money to live on. They're having to put their homes on the market in this depressed economy where you can't even sell a home.
CHERNOFF: In Palm Beach, some panicked victims are now looking to unload homes at the exclusive Breakers Resort. Foundations organized by Steven Spielberg and Elie Wiesel reportedly were invested with Madoff. And across the globe, major investment houses have announced losses, including Spain's Banco Santander, Japan's Nomura Holdings, and the Royal Bank of Scotland.
Madoff offices in London and New York are shuttered as Justice Department and SEC investigators pour through company records trying to determine who, if anyone, was helping Bernard Madoff execute his fraud.
LINDA THOMSEN, SECURITIES AND EXCHANGE COMMISSION: We are acutely focused with our colleagues in the Southern District of New York and the FBI to figure out exactly what's going on, to pursue the case that we've got, to preserve assets to the extent we're able, and to bring everyone who is responsible for the conduct at the Madoff firm to justice.
CHERNOFF: The SEC had concluded an investigation of Madoff last year, coming up with nothing. One source speculated Madoff's investment operations may have been entirely off the books, which would have made it very difficult for the SEC to uncover.
What is known is that Madoff was very secretive about his investing. "Barron's" magazine in 2001 quoted a money manager who pulled funds from Madoff: "What Madoff told us was, 'If you invest with me, you must never tell anyone that you're invested with me. It's no one's business what goes on here.'"
Madoff had also complained of SEC regulation at a forum sponsored by the Philoctetes Center.
BERNARD MADOFF, MADOFF INVESTMENT SECURITIES: (AUDIO GAP) Understand the scope of it. It's one of the few industries where the cost of doing business for the consumer has gone down dramatically from a commission standpoint, yet the expenses of doing business from the industry's perspective has dramatically increased.
CHERNOFF (on camera): Mr. Madoff was able to avoid regulatory oversight and able to continue his scheme because of his very fine reputation. His attorney says in spite of Madoff's admission of guilt to a federal investigator, nonetheless, Mr. Madoff, he says, will fight to get through this unfortunate set of events.
Allan Chernoff, CNN, New York.
(END VIDEOTAPE)
NGUYEN: And we want to take you now back to Chicago where you see right there at the podium, we understand that President-elect Barack Obama is going to be coming to that microphone just a little bit early. We expected him about 11:45 Eastern to announce his pick for education secretary. We understand that it's going to be just a minute or so away.
Let's talk for a brief moment with our Jessica Yellin.
And Jessica, when we talk about Arne Duncan, who is Obama's pick, it doesn't seem like it's much of a surprise because he was an adviser, wasn't he, on Obama's education policy, during his campaign?
YELLIN: Yes, he's been a close adviser to Obama on education throughout the years. They sort of worked together on these issues, both in their activist years here in Chicago and since he's been in the Senate.
But there were other names in contention. There was a lot of talk, at least, about Joel Klein in New York City, a more controversial figure, and someone else who was on Obama's transition education board. But Arne Duncan won out both -- the hometown roots, it's a big plus for Chicago to be sending somebody to Washington, D.C. And also they have this historic relationship.
And this is a man who, much like Obama, is a person who is willing to take risks and also compromise. He's known to work across the aisle, work with teams that are often in conflict -- teachers' unions and charter reformers, for example. And people on both sides have good things to say about him. So it's a person with whom Obama would no doubt have an easy relationship and a lot of trust.
And of course, it gives him a built-in pickup game in D.C. This guy is one of his -- apparently his favorite basketball players. So that had to be an edge for him.
NGUYEN: Yes, and someone who definitely has some game. He played professional basketball in Australia from 1987 to 1991.
Let's talk just for a second about the Department of Education. Because there's been criticism of President Bush's initiative when it comes to "No Child Left Behind." But I understand Duncan really doesn't want to scrap that initiative, but in fact he just -- in fact just wants it to have a little more flexibility.
YELLIN: Correct. He believes that it can be reformed without being eliminated, that there has to be sort of less of what is called teaching to the test, but more teaching to students' needs, allowing for what they call open-ended questions, preparing students to take tests where they don't just fill in bubbles but have to come up with the answers on their own.
So the idea is to augment "No Child Left Behind," not necessarily eliminate it, but also introduce other kinds of reforms possibly into the system. Again, he's been recognized especially for his openness to charter schools and also what we talked about a moment ago, pay for performance, where you reward teachers who get good -- who increase their students' grades and improve their performance.
Now, some teachers say that's unfair because if they go into the most troubled schools, they suffer personally as a result because they're taking on the risk of students who are less able to perform. But Duncan obviously thinks it's something that works and he's been willing to try it here.
He's had very good results in Chicago. Throughout his tenure here in the seven years, they've seen grades go up and they've seen performance improve. And as I said earlier, he's praised by Democrats and Republicans. Margaret Spellings, the Secretary of Education under President Bush, most recently praised him.
And here comes the president-elect, Betty.
NGUYEN: Yes, and he was going to be making an announcement on his pick for education secretary, who we believe will be Arne Duncan. Let's take a listen.
(JOINED IN PROGRESS)
OBAMA: Over the past few weeks, Vice President-elect Biden and I have announced key members of our economic team. And they are working as we speak to craft a recovery program that will save and create millions of new jobs and grow our struggling economy. But we know that in the long run the path to jobs and growth begins right here, in America's schools, in America's classrooms.
So today, we're pleased to announce the leader of our education team, whose work will be critical to these efforts, our nominee for secretary of education, and my friend, Arne Duncan.
In the next few years, the decisions we make about how to educate our children will shape our future for generations to come. They will determine not just whether our children have the chance to fulfill their God-given potential, or whether our workers have the chance to build a better life for our families, but whether we as a nation will remain, in the 21st century, the kind of global economic leader that we were in the 20th. Because at a time when companies can plant jobs wherever there's an Internet connection and two-thirds of all new jobs require a higher education or advanced training, if we want to out- compete the world tomorrow, then we're going to have to out-educate the world today.
Unfortunately, when our high school dropout rate is one of the highest in the industrialized world, when a third of all fourth graders can't do basic math, when more and more Americans are getting priced out of attending college, we're falling far short of that goal.
For years, we've talked our education problems to death in Washington, but we failed to act, stuck in same tired debates that have stymied our progress and left schools and parents to fend for the themselves, Democrat versus Republican, vouchers versus the status quo, more money versus more reform -- all along failing to acknowledge that both sides have good ideas and good intentions.
We can't continue like this. It's morally unacceptable for our children and economically untenable for America.
We need a new vision for the 21st century education system, one where we aren't just supporting existing schools but spurring innovation; where we're not just investing more money, but demanding more reform; where parents take responsibility for their children's success; where we're recruiting, retaining and rewarding an army of new teachers; and where we hold our schools, teachers and government accountable for results; and where we expect all our children not only to graduate high school but to graduate from college and to get a good-paying job.
These are precisely the goals to which Arne Duncan has devoted his life. From his days back in college tutoring children here in Chicago to his work at the helm of a nonprofit remaking schools on the South Side, to his time working for the Chicago public schools, where he became chief executive officer of this city's school system.
When it comes to school reform, Arne is the most hands-on of hands-on practitioners. For Arne's school reform isn't just a theory in a book, it's the cause of his life. And the results just aren't about test scores or statistics but about whether our children are developing the skills they need to compete with any worker in the world for any job.
When faced with tough decisions, Arne doesn't blink. He's not beholden to any one ideology. And he doesn't hesitate, for one minute, to do what needs to be done. He's worked tirelessly to improve teacher quality, increasing the number of master teachers who have completed a rigorous national certification process from just 11 to just shy of 1,200; rewarding school leaders and teachers for gains in student achievement.
He's championed good charter schools, even when it was controversial. He's shut down failing schools and replaced their entire staffs, even when it was unpopular.
This school, right here, Dodge Renaissance Academy, is a perfect example. Since this school was revamped and reopened in 2003, the number of students meeting state standards has more than tripled. In just seven years, Arne has boosted elementary test scores, here in Chicago, from 38 percent of students meeting the standards to 67 percent.
The dropout rate has gone down every year he's been in charge. And on the ACT, the gains of Chicago students have been twice as big as those for students in the rest of the state. So when Arne speaks to educators across America, it won't be from up in some ivory tower, but from the lessons he's learned during his years changing our schools, from the bottom up.
I remember a conversation we had about one of those lessons, a while back. We were talking about how he'd managed to increase the number of kids taking and passing A.P. courses in Chicago, over the last few years.
And he told me that, in the end, the kids weren't any smarter than they were three years ago. Our expectations for them were just higher. Well, I think it's time that we raised expectations for our kids all across this country and build schools that meet and exceed those expectations.
As the husband and brother of educators, the vice president-elect and I know this won't be easy. But we've seen how hard Jill and Maya work every day. And we know it's going to take all of us working together. Because, in the end, responsibility for our children's success doesn't start in Washington. It starts in our homes and our families.
No education policy can replace a parent who makes sure a child gets to school on time or helps with homework, and attends those parent-teacher conferences. No government program can turn off the TV or put away the video games and read to a child at night.
But we all need to be part of the solution. We all have a stake in the future of our children. I'll never forget my first visit to this very school several years ago, when one of the teachers here told me about what she called, "These kids syndrome" -- our willingness to find a million excuses for why these kids can't learn, how these kids come from tough neighborhoods, or these kids have fallen too far behind. "When I hear that term, it drives me nuts," the teacher told me. They're not "these kids," they're our kids.
I can't think of a better way to sum up Arne's approach to education reform. With his leadership, I'm confident that together, we'll bring our education system and our economy into the 21st century, and give all of our kids a chance to succeed. I'm going to ask Joe to say something briefly, and then we'll have Arne come up.
JOE BIDEN (D), VICE PRESIDENT-ELECT: Thank you, Mr. President- elect; congratulations, Arne.
My mom has an expression, and you all are tired of hearing me say this all through the last couple years, that children tend to become that which you expect of them. These kids, Mr. President, are the kite strings that lift our national ambitions aloft. These kids are, as you said, our kids. And Arne Duncan, as the secretary of education, is going to understand a great deal of our children, and I expect Arne, maybe of our parents as well.
And that's a really very, very good thing. Because if our children are going to succeed, if our economy is going to thrive, we have to have an education system that's second to none in the world. That's the only way our children and our nation are going to be able to compete in today's global economy. Any nation that is -- to paraphrase what the vice -- what the president-elect just said, any nation that out competes us -- out educates us -- will out compete us. It's that basic. And that means a stronger commitments to our high schools, our elementary schools, but also our community colleges. And it means college degrees must be within the reach of all -- all of our children, for nothing less is good enough.
But education is not just about competing, as any teacher within the walls of this school fully understands. It's about changing lives. As was referenced by the president-elect, his sister, and my wife, who are educators, they understand that -- that they need, also -- the very good teachers are inspirations to their children. Education systems are inspiration to children.
From what I've learned from my wife, when you educate a child, you do a lot more than teach them math, grammar, historical facts. You shine a light. You open doors. You make it possible for dreams to come true. You give a child hope and then nothing is ever the same, again, for that child.
And that's what Arne Duncan has done. From the time he got out of school to this very moment, he's shined a light for an awful lot of these kids. He's raised standards. He's helped kids in school. He's expected more. He's changed lives. And I can't think of anything more important for America's next secretary of education to do than what Arne has been doing all along.
I think this is a truly great pick, and I look forward to working with Arne and congratulations.
(APPLAUSE)
ARNE DUNCAN, EDUCATION SECRETARY NOMINEE: Thank you so much, Vice President-elect and President-elect Obama.
I'm deeply, deeply honored to be asked to serve in your administration. Like so many Americans, I was inspired by your campaign. I'm even more inspired by the team of people you are building to help bring much needed change to our country.
While many issues will demand your attention, I am convinced that no issue -- no issue is more pressing than education. Whether it's fighting poverty, strengthening our economy, or promoting opportunity, education is the common thread. It is the civil rights issue of our generation, and it is the one sure path to more equal, fair and just society.
Education has been my life's work. Starting on the South Side of Chicago where I grew up along with my sister and brother as a part of my mother's inner city after-school tutoring program. Her remarkable courage and dedication has been a constant source of inspiration to me.
It continued throughout high school, college, and much of my professional life, including Australia where I worked with under- privileged young people when I wasn't playing basketball. I am grateful that you have recognized all the hard work our team here in Chicago has done to turn around struggling schools, and create new learning options and opportunities across this city.
I absolutely did not do this alone. And I am confident that the progress will continue. We are on a winning streak here, and have proven it twice the rate of the state on elementary test scores and at twice the rate of the state on the ACT test. Those trends must continue.
I'm also eager to apply some of the lessons we've learned here in Chicago to help school districts all across our country.
We have worked with a the tremendous sense of urgency because we can't wait. Our children have just one chance to get a quality education, and they need and deserve the absolute best.
While there are no simple answers, I know from experience that when you focus on basics like reading and math, and when you embrace innovative new approaches and when you create a professional climate to attract great teachers, you can create great schools.
We are producing more nationally board certified teachers than any other big city school system in the country. And in this work, talent matters tremendously. We must continue to attract and support the best and brightest teachers who are committed to making a difference in the lives of our children.
I just want to take a moment to thank a few people who made it possible for me to be here today, starting with Mayor Daley. He had the confidence in me seven years ago when he asked me to take my current job, and he has always supported me when we made tough decisions, like the one to close and reopen this school right here.
I want to thank our mutual friend John Rogers, who's been a mentor and friend to me since I was 10-years-old. He gave my sister and I the opportunity to start a great school in the South Side of Chicago, and that has become a model for success in urban education.
I want to thank my children, Claire (ph) and Ryan (ph), and my wife Karen for all the tremendous support she's provided me during this job. And I want to thank her in advance for what I expect to be an even more demanding job in the years ahead.
And, finally, I want to thank all the people of Chicago who helped make us a national model for reform, starting with my partner, Bob Resin Watkins (ph) and our board president, Rufus Williams.
I know how important teamwork is, and it takes a lot of teamwork just to (INAUDIBLE) an education. I am deeply, deeply grateful to be a part of the Obama team. And together we have a chance to do something extraordinary for our nation's children.
Thank you.
OBAMA: Excellent. (APPLAUSE)
OBAMA: OK.
(APPLAUSE)
OBAMA: I just wanted to dispel one rumor before I take questions. I did not select Arne because he's one of the best basketball players I know.
(LAUGHTER)
Although I will say that I think we are putting together the best basketball-playing Cabinet in American history.
(LAUGHTER)
And I think that is -- that is worth noting.
I'm going to take a few questions.
QUESTION: (OFF-MIKE) mentioned the ties between education and the economy, and that's where I'd like to take us.
OBAMA: Sure.
QUESTION: The Federal Reserve is expected to lower the fed funds rate today to 50 basis points, one of the lowest rates in history.
OBAMA: Right.
QUESTION: I'm just wondering, how confident are you in Ben Bernanke's decision? And with that decision, are we running out of options to jump start the economy?
OBAMA: Well, I don't think it's good policy for the president or a president-elect to second-guess the Fed, which is an independent body. But let me just make an observation that we are running out of the traditional ammunition that's used in a recession, which is to lower interest rates. They're getting to be about as low as they can go. And although the Fed is still going to have more tools available to it, it is critical that the other branches of government step up. And that's why the economic recovery plan is so absolutely critical.
And my economic team, which I'm going to be meeting with today, is helping to shape what is going to be a bold agenda to create 2.5 million new jobs, to start helping states and local governments with shovel-ready projects -- rebuilding our roads, our bridges, making sure that schools like this one are energy efficient, putting people back to work, getting businesses to start seeing some increase in demand, so that we can get, instead of a downward spiral, start getting on an upward spiral.
And I'm confident that we can accomplish that if we've got Democrats and Republicans, federal, state, and local governments all working together. But, look, we are going through the toughest time, economically, since the Great Depression. And it's going to be -- it's going to be tough.
And we're going to have work through a lot of these difficulties, these structural difficulties that built up over many decades, some of it having to do with the financial industry and the huge amounts of leverage, the huge amounts of debt that were taken on, the speculation and the risk that was occurring, the lack of financial regulation; some of it having to do with our housing market, stabilizing that.
It's going to be, I think, critical for us to look at some of the long-term issues that I talked about during the campaign, health care and energy.
And, finally, education is going to play a critical role in this. You know, what the Fed does or what our administration does, in terms of short-term, emergency action, is obviously going to be important to people's everyday lives.
But if we pursue the kind of strategy that Arne Duncan's pursued and I want to see our administration pursue, which is making no excuses and expecting high achievement from every child.
If we can get young people focused on education; if we can change our culture so that we are once again valuing intellectual achievement; and if we are willing to all pull together around making our schools better, that's going to be the single biggest determinant, in terms of how our economy does, long-term, OK? John McCormick (ph)?
QUESTION: (INAUDIBLE). First of all, given the situation here (INAUDIBLE) do you favor (INAUDIBLE) special election to fill your -- vacancy, and secondly, you told us at your first press conference after the election that you were going to take a very hands-off approach to filling that spot. Over the weekend, The Tribune reported that -- Rahm Emmanuel, your incoming chief of staff, had presented a list of potential names...
OBAMA: John, let me -- let me -- let me just cut you out, because I don't want you to waste your question. As I indicated yesterday, we've done a full review of this. The -- the facts are going to be released next week. It would be inappropriate for me to comment, because the -- the -- for example, the -- the story that you just talked about in your own paper, I haven't confirmed that it was accurate, and I don't want to get into the details at this point. So do you have another question?
QUESTION: There's no conflict between what (INAUDIBLE) your hands-off approach and the possibility that (INAUDIBLE)...
OBAMA: John -- John, I said -- The U.S. attorney's office specifically asked us not to release this until next week.
QUESTION: What about on a special election?
(INAUDIBLE) given the (INAUDIBLE) chaos here in Illinois? (LAUGHTER)
OBAMA: You know, I've said that I don't think the governor can serve effectively in his office. I'm going to let the state legislature make a determination in terms of how they want to proceed.
QUESTION: Do you or Duncan have a better jump shot?
OBAMA: Duncan much better. That one's an easy one.
All right. Mary-Anne (ph) (INAUDIBLE)?
QUESTION: (INAUDIBLE) all of their achievements, there have still been many who believe they could do much better. Families wrestle with where to go to school...
OBAMA: Right.
QUESTION: ... you yourself have sent your daughters to private schools. What kind of commitment can you make for resources now, as president for the public school system. Do you agree with Arne Duncan's proposal of cash incentives -- giving kids who receive A's and B's, perhaps, $100? And what did the mayor say when you told him that you were taking Arne Duncan away from Chicago?
(LAUGHTER)
OBAMA: The...
QUESTION: (INAUDIBLE) I had to get them all in.
OBAMA: I understand.
Well, first of all, I think Arne, Joe, myself, all agree that the Chicago public schools aren't as good as they need to be, and that the vast majority of schools that are under performing can do better. That's our job: To raise expectations for parents, for students, for principles, for school administrators. And that's what Arne has consistently done.
What I've been so impressed with is the dedication that he has -- has shown in continuous steady improvement. And that's what we're looking for.
Look, we're not going to transform every school overnight. And there's some school systems -- not just big city school systems -- there are rural schools and suburban schools that just aren't up to snuff. But what -- what we can expect is that each and every day we are thinking of new, innovative ways to make the schools better. That's what Arne's done. That's going to be his job. That's going to be his task.
And one of the things that Arne and I share, I think, is a deep pragmatism in terms of how we go about this.
If -- if pay-for-performance works and we can work with teachers so they don't feel like it's being imposed on them but instead they've got an option for different compensation mechanisms in order for us to encourage high performance, then that's something we should explore. If charter schools work, let's try that. You know, let's not be clouded by ideology when it comes to figuring out what helps our kids.
And I think Mayor Daley could not be prouder of Arne Duncan and the fact that the same dedication, hard work that he has shown here in Chicago he's going to be able to show to the entire country.
OK. Carol Lee (ph)? Where Carol (ph)? Carol from (INAUDIBLE).
There you go.
QUESTION: (OFF-MIKE) you had said before that you were going to appoint a number of Republicans to you Cabinet, and so far we haven't seen that many. Do you -- what can we expect in that area?
OBAMA: I'm not giving you a preview. We've got some more appointments to make. And I think that when you look at our entire White House staff and Cabinet and various appointments, I think people will feel that we followed through on our commitment to make sure that this is not only an administration that is diverse ethnically but it's also diverse politically and it's diverse in terms of people's life experience.
Arne's somebody who has really been working on the ground, for example. You know, he's not a creature of Washington. That's not where he cut his teeth. He cut his teeth working with kids individually, working in schools like this.
You know, we have other people, obviously, who have Washington experience, and I think that blend is going to make us extraordinarily effective on not just our education agenda but our broader agenda to help American families live out the American dream.
OK. Thank you guys.
(APPLAUSE)
NGUYEN: And we have been listening to President-elect Barack Obama today, tuning in as we've been watching him announce his nominee for education secretary. That man being Arne Duncan, the current superintendent of the Chicago Public Schools. In fact, he has run Chicago's school system since 2001. He was also an adviser on Obama's education policy during his campaign.
But today we understand he is the pick for education secretary.
