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Battle of Words Continues Over Harvard Prof's Arrest; House Effort to Reform Health Care Stalls; New Jersey Focus of Major Federal Raid; Obama Announces Education Grants; Minimum Wage Increase Affects Small Businesses
Aired July 24, 2009 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Tony, thanks so much.
We're pushing forward on a charge that's been dropped in a case that just won't go away.
(BEGIN VIDEO CLIP)
SGT. JAMES CROWLEY, CAMBRIDGE, MASSACHUSETTS, POLICE: Knowing he was an affiliate of Harvard, I really didn't want to have to take such a drastic action because I knew that it was going to bring a certain amount of attention, unwanted attention, on me.
PHILLIPS (voice-over): The cop who arrested a Harvard professor and friend of President Obama says he's not the bad guy, and his comrades and bosses agree.
America's lowest-paid workers are getting a raise, but some fear it will cost them their jobs. It's a stubborn recession. The best time or worst to bump up the minimum wage?
And we're live in Central America where the ousted president of Honduras is back in the driver's seat. But it's a long, long road.
(END VIDEO CLIP)
PHILLIPS: Hello, everyone. I'm Kyra Phillips, live in the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.
And we expect to hear soon from President Obama, but guess what? For the first time in days, he won't be talking health care. He and Education Secretary Arne Duncan will put out more than $4 billion in stimulus money to bankroll reform in America's schools. It's called Race to the Top. And you'll see the president live, right here, in the CNN NEWSROOM at quarter past the hour.
Now, some Massachusetts cops have had enough. They've just held a news conference coming to the defense of Sergeant James Crowley, the officer at the center of the Harvard controversy. Some of the speakers pretty much called out President Obama for criticizing the arrest of his friend, Harvard professor, Henry Gates Jr. Take a listen.
(BEGIN VIDEO CLIP) SGT. DENNIS O'CONNOR, PRESIDENT, CAMBRIDGE POLICE OFFICERS ASSOCIATION: Whatever may be the history, the supervisors and the patrol officers of the Cambridge Police Department deeply resent the implication and reject any suggestion that in this case, or any other case, they have allowed a person's race to direct their activities.
However, we hope that they will reflect upon their past comments and apologize to the men and women of the Cambridge Police Department.
(END VIDEO CLIP)
PHILLIPS: Then just a few minutes later, the tone softened a little bit.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Let me make it clear. We're not demanding an apology from anyone. Our view is that we think if Governor Patrick and the president review all of the facts, which they did not have before them when they made their off-the-hip remarks, that they would have commented differently. We're hopeful that upon reflection, they will realize that their statements were misguided and will take appropriate action in the form of an apology.
If Professor Gates chose to do that, I think that would be an excellent outcome, but we're making no such request, and we'll leave that decision to him.
(END VIDEO CLIP)
PHILLIPS: Well, there you have it. Calling out the commander in chief, not something that happens very often, especially by a group of local cops. So, how is all this sitting at the White House? Suzanne Malveaux is there.
Suzanne, I don't think this is where we thought this story was going to head to. We're talking about local cops and the president of the United States, and no one's giving an inch.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, certainly. And one of the things, the big question is, you know, whether or not the administration or the president would say upon reflection, he apologizes or has any different ways of wording this.
And we heard from the president yesterday who said, quite frankly, he was surprised by all the discussion, the controversy, around this. He called it straightforward commentary.
I spoke with Robert Gibbs this morning about this, asking -- the question was, of course, whether or not there was any regret in getting involved in all of this. The answer from Robert Gibbs was saying, well, you know, there would be regret if there was a sense that he knew that all of this obsession and distraction would take place.
But then he really turned the corner, and he simply said that the president understands the hard work of people who do the job of law enforcement, that he has a great deal of respect for them, and essentially that he feels that the president has addressed this story. He's addressed this concern and this controversy.
I want you to take a listen to how the president saw all of this upon reflection.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It doesn't make sense, with all the problems we have out there, to arrest a guy in his own home if he's not causing a serious disturbance.
Now, I don't know all the extenuating circumstances. And as I said, I respect what police officers do. What I can tell -- from what I can tell, the sergeant who was involved is an outstanding police officer, but my suspicion is, probably that it would have been better if cooler heads had prevailed.
(END VIDEO CLIP)
MALVEAUX: So, Kyra, you know, another question we put to Gibbs is, what is the president's role here? How does he see this? When he was hit with this question, obviously, it was one that he anticipated. He's good friends with Professor Gates, so he expected it, and he'd been thinking about -- about his response. But it was clear that it was unscripted and that it was a real moment for the president.
And Gibbs was asked does the president see his role in some way illuminating black as well as white Americans in racial profiling, taking this opportunity to educate? Or does he see his role as being someone who needs to bridge the divide, to bring people together?
Gibbs saying he doesn't believe that these are competing roles, and that that was something that the president was trying to do in responding in the press conference to that question, to what had happened to Professor Gibbs.
We'll see whether or not there is any kind of walk-back, if you will, whether the president will address this once again, Kyra.
PHILLIPS: Suzanne, why don't you just ask the president if he'll invite Sergeant Crowley and also Skip Gates to the White House? The three of them can have a conversation. You can cover it, and then we just put an end to all this. What do you think?
MALVEAUX: It's a great idea, Kyra.
PHILLIPS: OK. You take that to Robert Gibbs.
MALVEAUX: We would have a big audience, I'm sure, for that one.
We did ask him if he had reached out, if President Obama picked up the phone to call Professor Gibbs, or if the other way happened. We know these two men have not talked since this controversy, since the president weighed in on this. We'll see if there's actually some sort of outreach and whether or not some people will get together and talk about this in a much more direct way.
PHILLIPS: We just need to all get along. Suzanne Malveaux, appreciate it.
MALVEAUX: thank you.
PHILLIPS: Well, we didn't hear from Officer Crowley at today's news conference, but he did sit down with Kim Casey of Boston affiliate WHDH. Here's what he had to say about what led up to Professor Gates' arrest.
(BEGIN VIDEO CLIP)
CROWLEY: I was continuously telling him to calm down in this whole exchange, because I really didn't want this either. And I didn't -- although I don't -- didn't know at the time who Professor Gates was, knowing he was an affiliate of Harvard, I really didn't want to have to take such a drastic action, because I knew that it was going to bring a certain amount of attention, unwanted attention, on me.
Nonetheless, that's how far Professor Gates pushed it and provoked and just wouldn't stop.
(END VIDEO CLIP)
PHILLIPS: No surprise, Sergeant Crowley's account of the arrest isn't sitting well with Professor Gates' attorney. Some reaction now from Charles Ogletree next hour.
Now, remember when I said President Obama wouldn't be talking health care today? Well, I meant in public. He's already met in private with the top Senate Democrat and chairman of the Senate finance committee, who are shunning his deadlines, but heeding his call to keep on working.
Over in the House, meanwhile, it's Democrat versus Democrat, and one key Dem has had enough.
CNN's Brianna Keilar on the Hill. What can you tell us, Brianna?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Some developing information here, Kyra. As you said, it's Democrat versus Democrat in the House. That is the holdup. They haven't decided exactly on some key points for moving ahead on health care.
And what we're now learning is that Democratic leaders may consider bypassing some of their concerns and moving this whole health-care reform bill to the floor. This is -- the person we're talking about is Henry Waxman. He is the chairman of the energy and commerce committee.
And, Kyra, the way it works is you have three committees in the House that took up this bill, and they were supposed to pass it out of their committees and then go to the House floor. Well, two of these committees were able to pass this bill through. But the third, it got hung up because of a group called the blue dog Democrats. Some fiscally conservative Democrats who have major concerns, in a nutshell, about the costs of this and how you're going to pay for it, how the Democrats' plan pays for this.
In this committee they have delayed moving the bill through, and so now this is kind of the threat that's come down from Chairman Waxman that you know what? We may just bypass these blue dog Democrats and go straight to the House floor, Kyra.
PHILLIPS: All right. Well, meanwhile, action going on in the Senate, as well.
KEILAR: Yes, that's right. And a big slowdown there. If there's a slowdown in the House, there's really a slowdown in the Senate.
As you know, President Obama was meeting with Harry Reid, the top Democrat in the Senate, and also with Max Baucus, the head of the Senate Finance Committee, really the key committee that's trying to find a bipartisan compromise. They just wrapped up their meeting at the White House.
We understand one of the big things they talked about, according to one Democratic source, was the importance of passing something out of that committee, passing a bill out of the Senate Finance Committee, by the time the Senate leaves for recess in August 7.
But it's really going to be a heavy lift because those folks there, the six key players, Democrats and Republicans who are trying to hash out a deal, Kyra, but it's certainly slow going, as evidenced by the fact that we learned from Harry Reid yesterday that there is not going to be a vote before the full Senate, certainly, before the Senate leaves for its recess.
PHILLIPS: All right. Brianna Keilar, thanks so much.
Now, at the top of the hour you heard from Sergeant Jim Crowley for the first time on a one-on-one camera interview on his account of the arrests of Harvard Professor Skip Gates.
And we have just reached T.J. Holmes, who just finished an interview with Charles Ogletree, Professor Gates'S attorney. He's actually responding to what we've heard for the first time. T.J. joins us on the phone.
How is Ogletree -- well, I guess, what did he say once he heard the interview, T.J.? Because I know you just wrapped up your interview.
T.J. HOLMES, CNN CORRESPONDENT: (via telephone): Well, some of the things he's saying at this point, Kyra, is that they are really looking forward to moving forward. He said he has been in touch with police and other officials there, the district attorney as well, and that this is no longer, in his words, about race. He said he has never said -- at least Ogletree, and, remember, representing Gates -- this is not about race. This is about an officer and bad judgment.
However, Kyra, just a few questions later, he went back -- and I asked the question, "Well, why is it that this is all about racial profiling? Why has this become what it is in the public eye now?"
Now, he says, this case became about race when that witness called and said she saw two black men at the door. So, I found it interesting in that -- in one breath he wanted to say and wanted to defend why this was not about race, or racial profiling as far as he's concerned. It's about an officer who displayed bad judgment.
But then, of course, as we know, Kyra, in this whole public dialogue that's going on has, in fact, been about racial profiling, white officer versus black professor. And he said the reason it became that because when that call went in from that witness, he said there are two black men at the door, he said that put things into motion. That put a certain mindset into those police officers' minds of what they were dealing with. So, it was interesting to hear.
And another piece of news I guess he's making here, Kyra, is that he's saying at this point there will be no lawsuit. He's saying a lawsuit, quite frankly, is not on the table at this point. He is not 100 percent ruling it out somewhere down the road, saying there will be no lawsuit. But several other options, is how he put it, are on the table.
Those options being the possibility of more sensitivity training and certainly having more of a dialogue between police officers and the community around this country. But at this point, Kyra, no lawsuit, he said, is even being contemplated.
PHILLIPS: All right, T.J. Holmes, we look forward to hearing more from Charles Ogletree's -- Gates's attorney. Appreciate it.
Looking forward now, busted in New Jersey. Money laundering, corruption, black market kidneys. The feds say it's one of the worst cases they've seen in a state that's no stranger to crime.
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PHILLIPS: So, what would you do if you saw this through your passenger window? Would you sit and watch, hope and pray? Or jump into the fire and save a little girl?
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PHILLIPS: The state of California is one step closer to closing a $26 billion budget gap, but nobody's popping champagne yet. After working all night, the state senate signed off on a complex package of spending cuts and stop-gap maneuvers. But the state assembly is still wading through it. Assuming it passes, Californians will see deep cuts in education, health care, welfare, prisons and parks.
Twenty-four days to the fiscal 2010. Three other states still haven't passed budgets. Pennsylvania, Connecticut, and North Carolina still trying to make up for slumping revenues and higher obligations, all tied with the recession. We'll keep you posted.
So does America need a consumer financial protection agency? Treasury Secretary Tim Geithner says yes. Fed chief Ben Bernanke says no. They're airing their differences separately before a House committee that's looking at ways to protect us from shady or risky mortgages, credit-card loans, investments, you name it.
Bernanke said that's the Fed's territory. Geithner said a whole new agency is needed.
Slightly fatter paychecks are on the way, at least for some of you. But some say the minimum wage goes up; so do the chances of losing your job. We're going to talk about that.
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PHILLIPS: Stormy skies in parts of the Midwest. Some travel delays in the northeast. Chad Myers watching the maps and the radar for us. Hey, Chad, what's up?
(WEATHER REPORT)
PHILLIPS: Juicing up the International Space Station. Endeavour astronauts this hour, live pictures on an extra-long space walk to install more fresh batteries for the station. The walk is scheduled to last more than seven hours.
Four new batteries were supposed to be plugged in during Wednesday's space walk, but after two were in place, NASA sent the two astronauts back inside after a problem with carbon dioxide levels, actually, in one of those space suits. That's not a good thing.
Endeavour is scheduled to head back to Earth one week from today.
It's a state with a history of corruption. Now history repeats itself in New Jersey in a big way that's grabbing headlines around the world.
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PHILLIPS: Does New Jersey have the most rampant corruption in the nation? Well, the feds say it might after a corruption and money laundering bust that netted more than 40 suspects, including rabbis, mayors and state lawmakers.
Today news of the raid is rippling across the globe, with the arrests of the rabbis grabbing headlines in Israel. Meanwhile, the scope of the case is staggering, even in a state with a history of corruption.
CNN's Deborah Feyerick brings us up to date.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): It began as an investigation into international money laundering, allegedly by a handful of prominent New Jersey rabbis with ties to Israel. It turned into a far-reaching probe of public corruption in New Jersey, as nearly 30 politicians and public officials, Democrats and Republicans, were rounded up in what prosecutors called the largest sweep of its kind.
WEYSAN DUN, SPECIAL AGENT, FBI: This case is not about politics. It is certainly not about religion. It is about crime, corruption. It is about arrogance. It is about a shocking betrayal of the public trust.
FEYERICK: The two cases are linked by a single cooperating witness posing as a real-estate developer but, in fact, working for the government, says New Jersey's top prosecutor.
RALPH MARRA JR., ACTING U.S. ATTORNEY: "I don't donate, I invest," the C.W. would say in meetings in parking lots, at restaurants, luncheonettes, diners, offices, basement boiler rooms, and bathrooms. And the politicians willingly put themselves up for sale.
FEYERICK: Prosecutors say public officials including mayors, deputy mayors, councilmen and a New Jersey assemblymen brazenly took envelopes stuffed with thousands of dollars in bribes in exchange for political favors.
One of the most damaging statements allegedly made? Hoboken Mayor Peter Cammarano III, who allegedly took $25,000 in bribes, telling the phony developer he would become a priority while, quote, "the people who were against us the whole way, they get ground into powder."
Prosecutor Ed Kahrer has been working the case for ten years.
ED KAHRER, FBI PUBLIC CORRUPTION DIVISION: Corruption is not only persuasive; it has become ingrained in New Jersey's political culture.
FEYERICK: New Jersey Governor Jon Corzine criticized the corruption, while asking one of his staff to step down after he was investigated but not charged.
GOV. JON CORZINE (D), NEW JERSEY: This morning I asked for the resignation of Commissioner Joe Doria, and he has agreed to resign.
FEYERICK (on camera): Prosecutors say the same cooperating witness who had allegedly been paying public officials bribes had earlier infiltrated the money-laundering organization, which involved rabbis allegedly taking fees for laundering millions of dollars for their charitable organizations.
Deborah Feyerick, CNN, Newark, New Jersey.
(END VIDEOTAPE)
PHILLIPS: As you know if you've been watching the past hour and a half or so on CNN, we took live the Cambridge Police Department holding a news conference. You'll see right here, Sergeant Jim Crowley, the officer who arrested Harvard Professor Skip Gates. His bosses, his comrades, co-workers, stepping up to the mikes, showing support for him.
Our Don Lemon was actually there at that news conference, on the phone with us now.
Don, I understand you had a chance to talk to some of those cops just a few minutes ago.
DON LEMON, CNN CORRESPONDENT (via telephone): Yes, Kyra, and boy, oh, boy, was it emotional. Not only did I get a chance to speak with some of the police officers; I got a chance to talk to Sergeant Crowley himself. He didn't want to comment much on camera, because, you know, he's been advised and has given his word not to talk any more, on good advice, he says.
But, you know, we went into a room. It was an exclusive with him and about 20 of the officers, most, if not all, of the officers who were on that podium with him. And I got to tell you, it ended with tears and -- and hugging. And, Kyra, these were officers who were black, Hispanic, white, Asian, women, all standing around this officer, supporting him, saying, "When I heard about what happened, I thought they absolutely had to have it wrong. There is no way" -- this is according to them -- "on earth that this sergeant would ever racially profile someone, especially someone who trained officers in how to not to racially profile anyone."
And I point-blank, Kyra, I asked an African-American officer who's been on the force, I think she said, for almost 20 years. And I said, what do you think of the president's comments? She goes, "I don't like the president's comments. I voted for him. I supported him. I will not vote for him again, because he's insulted police officers all around the country."
And, you know, I asked them what would they say to Professor Gates. They say, "Professor Gates, you need to sit down and bring this down, because you" -- in their estimation, they believe that he has created a smokescreen and created something that is not there. They believe that he was acting erratically. And no way was he racially profiled, and he needs to take it down a notch. So, that was the sentiment.
And at the end, as I said, the officer -- the sergeant, hugged everyone in the room. They started crying. All of his buddies. And, you know, how it is. The police officers are very insular, and they're very close, Kyra. So, you can imagine these big, tough guys and these tough gals who are out every day fighting -- you know, fighting the fight and putting their lives on the line. They're all standing there hugging each other and supporting each other.
PHILLIPS: So, you know, what's it going to take to just put this to rest, Don? What's your sense? I mean, I said to Suzanne Malveaux, I said, you know, now that the president's involved, you know, he's the commander in chief. He should just get Skip Gates and Sergeant Crowley and bring them to the white House and all three of them just have an open and frank conversation.
LEMON: You -- you hit the nail on the head, Kyra. You just hit the nail on the head. Because I spoke to a law enforcement professional expert. He's a two-time police chief and was an officer here in Massachusetts and now runs his own consulting company, and he advises police departments.
He said, "Do you know what they need to do? They all need to get into a room -- the police commissioner, the sergeant, the president, the professor, the attorneys -- and they need to work it out, and they need to take it down a notch, because there are lots of misperceptions about this story."
Now I'll tell you what these officers -- what's important here and, you know, maybe I buried the lead. They said absolutely -- and you know it, Kyra. I mean, you and I have talked about it. Yes, there's profiling. He said -- and they said, yes, it happens right here in Cambridge. But this case, they believe, was not that. It was simply a big misunderstanding and something that got blown out of proportion. That is not necessarily racial profiling.
Maybe it's something else. Maybe it's communication. Maybe it's other things they need to work on. But they don't believe that this one was racial profiling.
So, to answer your question, you hit the nail on the head. They need to sit down and talk and not judge each other and be open to each other's thoughts and comments and work it out, as they say. Work it out, Kyra.
PHILLIPS: It just seems like a perfect opportunity. You've got Skip Gates who writes on this. I mean, he's famous for this subject matter. You've got Sergeant Crowley, who's the one that educated other officers about racial profiling and how not to do that on the job.
LEMON: And Kyra...
PHILLIPS: And then you've got the president of the United States, an African-American.
LEMON: Yes.
PHILLIPS: I mean, it seems like a no-brainer to hash this out in an intelligent way and put an end to it.
LEMON: You saw the front of the "USA Today," Kyra. I think it says, "The President" -- "The Professor and The President."
So, yes, you're absolutely right. And you also have to -- listen to this -- and I'm not saying that -- I don't know. I was not there. I don't know if the officer did anything wrong. I don't know if Skip Gates did anything wrong, but we know that racial profiling does happen. Situations can get out of control.
But this officer was handpicked by a former African-American police commissioner here in Cambridge, who is now retired, and handpicked...
LEMON: ... officer did anything wrong. I don't know if Skip Gates did anything wrong. But we know that racial profiling does happen, and situations can get out of control.
But this officer was handpicked by a former African-American police commissioner here in Cambridge who is now retired, and handpicked to teach officers how not to racially profile people. So, it's, like, oh, you know, what do you do? That doesn't necessarily mean that he's 100 percent immune and doesn't do it, you know. Everyone, you know, makes mistakes and everyone has misjudgments and misperceptions.
But, you know, it's -- every time you -- the onion just keeps unpeeling. The onion just keeps unpeeling and unpeeling and unpeeling. And every minute I learn something new about this story.
PHILLIPS: Wow, and it's such a great opportunity for these players. And we're talking about, you know, the sergeant and Skip Gates and the president to do something really amazing with this and turn it into a positive outcome. It's up to them. They've got the opportunity. We've teed it up, right, Don?
LEMON: It is. Absolutely, they do have the opportunity.
PHILLIPS: All right.
LEMON: And I think the president, you know, from what he says about these matters, he says he's open to that sort of dialogue. He's not, you know -- it's OK to disagree, but then you can move on and make progress. So, we'll see, Kyra. You know, good idea. Let's hope it works.
PHILLIPS: OK, let's push for it. Thanks, Don.
LEMON: All right, thanks.
PHILLIPS: All right. Mr. President, I hope you're listening.
Will more money into people's paycheck translate into fewer jobs? It's an age-old argument, and it's being revisited today as the federal minimum wage goes up to $7.25 an hour -- or, an hour, rather, from $6.55. That means that around 4.5 million workers will see bigger paychecks. And some economists think that struggling businesses might have to cut jobs to keep up, but others think that workers will spend the extra dollars stimulating the economy.
Now, if you want a state-by-state breakdown, just go to CNNmoney.com for this interactive map. Some states that already pay more than $7.25 an hour, like California, will see no change. Here's a look at it right now. And other states like New York, where the state minimum wage is $7.15, the hike will be more modest.
Twenty-nine states will see some kind of raise. Twenty-one states and D.C. won't. The largest raise of 70 cents actually translates into $28 a week or more than $1,400 a year. Just go on to CNN.com. You can actually click on to any state there in the U.S., and it will actually tell you the minimum wage.
So, it's just a few bucks, right? Well, for some mom-and-pop businesses, it could add up to a huge burden, one they won't be able to bear. Businesses, like Slice-O-Rama Pizza Shop just outside Atlanta. Co-owner Terry Odom is hoping and praying that she can make payroll. But she says the recent string of pay hikes is killing her pizzeria. Now, Terry is joined by her daughter Kimberly, a Slice-O- Rama worker who's about to get the raise. Let's hope we don't start a mother/daughter feud here.
Hi, guys.
UNIDENTIFIED FEMALE: Hey.
PHILLIPS: And maybe, you know, let's start on the positive side here, OK, before we go to you, Mom. Kimberly, you're 22. You know, you're going to school. You're having to pay all your bills. Mom's not, you know, letting you off the hook in any way. So, you're working. You're paying your bills. So, you must be pretty excited about the minimum wage going up.
KIMBERLY ODOM, SLICE-O-RAMA WORKER: Well, yes, I mean, it's going to mean an increase in my paycheck, but I know it's going to be a strain on her. I mean, it's hard enough as it is, and now it's just going to get a little worse. I don't know, I mean, it's going to be hard, and I'm just going to have to...
PHILLIPS: Well, you're in a tough position.
K. ODOM: ... (INAUDIBLE) with her.
PHILLIPS: Sure. I mean, it's more money for you in your pocket. Yet, Mom, you're saying that this is going to be really tough for you because day by day, you're wondering if you're going to make ends meet. So, tell us the con for you on this.
TERRY ODOM, OWNER, SLICE-O-RAMA: Unfortunately, I understand from a younger person's perspective, more money, more money in their pocket is great. As a small mom-and-pop business, you know, every...
PHILLIPS: Terry, forgive me. Stay with me, guys. The president of the United States at the Department of Education in Washington now. We're going to listen to his announcement of a billion more federal dollars for schools. Hopefully we'll get back and talk minimum wage after the speech if our guests will hold on.
(JOINED IN PROGRESS)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you for the outstanding introduction from Matthew. And Matthew's teacher, you're doing obviously an outstanding job. Although I understand Matthew's mom's also a teacher, who has also won awards for her outstanding work. So, you know, the acorn doesn't fall far from the tree. We are very proud of him. Obviously, I want to thank my wonderful secretary of education, Arne Duncan, who has helped to lead us.
(APPLAUSE)
OBAMA: I want to thank all the members of Congress who are here, the governors who are in attendance, and I want to give a special shout out to Chairman George Miller of the Education Committee in the House, who has just been an outstanding partner for reform. Please give him a big round of applause.
(APPLAUSE)
OBAMA: You know, from the moment I entered office, my administration has worked to beat back this recession by creating jobs and unfreezing credit markets, extending unemployment insurance and health benefits to Americans who are out of work. But even as we've worked to end this immediate crisis, we've also taken some historic measures to build a new foundation for growth and prosperity that can help secure our economic future for generations to come.
One pillar of this new foundation is health insurance reform that can control deficits and reduce costs for family and businesses and provide quality affordable health care for every American. Another pillar is energy reform that makes clean energy profitable and creates green jobs that can't be outsourced and frees America from the grip of foreign oil. We're also working to enact financial reforms that will set up firm rules of the road to help prevent an economic crisis like the one we've just gone through from ever happening again.
But even if we do all of those things, America will not succeed in the 21st century unless we do a far better job of educating our sons and daughters, unless every child is performing the way Matthew's performing. In an economy where knowledge is the most valuable commodity a person and a country have to offer, the best jobs will go to the best educated, whether they live in the United States or India or China. In a world where countries that outeducate us today will outcompete us tomorrow, the future belongs to the nation that best educates its people, period. We know this.
But we also know that today our education system is falling short. We've talked about it for decades, but we know that we have not made the progress we need to make. The United States, a country that has always led the way in innovation, is now being outpaced in math and science education. African-American and Latino students are lagging behind white classmates in one subject after another, an achievement gap that by one estimate costs us hundreds of billions of dollars in wages that will not be earned, jobs that will not be done and purchases that will not be made.
And most employers raise doubts about the qualifications of future employees, rating high school graduates' basic skills as only fair or poor. Of course, we -- as I said before, we've talked about this problem for years. For years, we've talked about bad statistics and an achievement gap. For years, we've talked about overcrowded classrooms and crumbling schools and corridors of shame across this country.
We've talked these problems to death, year after year, decade after decade, while doing all too little to solve them. But thanks to Arne's leadership, thanks to George Miller's leadership, thanks to all the dedicated Americans in statehouses and schoolhouses and communities across this country, that's beginning to change. We're beginning to break free from the partisanship and the petty bickering that have stood in the way of progress for so long. We're beginning to move past the stale debates about either more money or more reform, because the fact is, we need both. We're beginning to offer every single American the best education the world has to offer, from the cradle to the classroom, from college to careers.
In recent months, I've spoken about the different parts of this strategy. I've spoken about what we're doing to prepare community college students to find a job when they graduate, to make college and advanced training more affordable and to raise the bar in early learning programs. Today, I want to talk about what we can do to raise the quality of education from kindergarten through senior year, because improving education is central to rebuilding our economy.
We set aside over $4 billion in the Recovery Act to promote improvements in schools. This is one of the largest investments in education reform in American history. And rather than divvying it up and handing it out, we are letting states and school districts compete for it. That's how we can incentivize excellence and spur reform and launch a race to the top in America's public schools.
That race starts today. I'm issuing a challenge to our nation's governors, school boards and principals and teachers, to businesses and non-for-profits, to parents and to students. If you set and enforce rigorous and challenging standards and assessments, if you put outstanding teachers at the front of the classroom, if you turn around failing schools, your state can win a race to the top grant that will not only help students outcompete workers around the world, but let them fulfill their God-given potential.
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. We will use the best evidence available to determine whether a state can meet a few key benchmarks for reform. And states that outperform the rest will be rewarded with a grant.
Not every state will win. And not every school district will be happy with the results. But America's children and America's economy and America itself will be better for it.
Now, one of the benchmarks we will use is whether states are designing and enforcing higher and clearer standards and assessments that prepare a student to graduate from college and succeed in life. Right now, some states like Massachusetts are setting high standards, but many others are not. Many others are lowballing expectations for students. Telling our kids they're prepared to move on to the next grade, even if they aren't, awarding diplomas even if a graduate doesn't have the knowledge and skills to thrive in our economy. That's a recipe for economic decline, and it has to stop. With the "Race to the Top" fund, we will reward states that come together and adopt a common set of standards and assessments. Now, let me be clear. This is not about the kind of testing that has mushroomed under "No Child Left Behind." This is not about more tests. It's not about teaching to the test. And it's not about judging a teacher solely on the results of a single test.
It is about finally getting testing right. About developing thoughtful assessments that lead to better results, assessments that don't simply measure whether students can use a pencil to fill in a bubble, but whether they possess basic knowledge and essential skills like problem solving and creative thinking, creativity and entrepreneurship.
And already, 46 states are working to develop such standards. I urge those 46 states to finish the job. I urge the other four to get on board.
(LAUGHTER)
OBAMA: One of the other benchmarks we'll be using in awarding race to the top grants is whether outstanding teachers are being placed in our classrooms. From the moment a student enters a school, the single most important factor in their success is the person in front of the classroom. Every one of us can point to a teacher who inspired us and in some way shaped the course of our lives.
Great teachers are the bulwark of America. They should be valued, and they should be honored. Few have worked harder to do that than our national union leaders. Randi Wiengarten is right here, and Dennis Van Roekel are two union leaders...
(APPLAUSE)
OBAMA: ... who are here. And I'm very pleased that they're with us today.
But if we're honest with ourselves, we'll admit that in too many places, we have no way -- at least no good way -- of distinguishing good teachers from bad ones. As Arne has pointed out in the past, they have 300,000 teachers in California. The top 10 percent are 30,000 of the best that are out there. The bottom 10 percent are 30,000 of the worst out there. The problem is, we have no way to tell which is which.
That's where data comes in. Some places are keeping electronic records of how a student does from one year to the next and how a class does in any given year. This helps students, parents, teachers, principals and school boards know what's working and what's not in the classroom. Basketball coaches have a game tape for the teams to see what they did right and what they did wrong after a tough series. Teachers and principals should have a way of doing the same.
Now, I recognize there's a concern among some that a teacher won't be judged fairly when we start linking students' performance to the performance of their teachers. And that's why we need to bring teachers into the process and make sure their voices are heard.
(APPLAUSE)
OBAMA: And that's why we need to make sure we use tests as just one part of a broader evaluation of teachers' performance. But let me be clear. Success should be judged by results, and data is a powerful tool to determine results. We can't ignore facts. We can't ignore data.
That's why any state that makes it unlawful to link student progress to teacher evaluations will have to change its ways if it wants to compete for a grant. That's why the "Race to the Top" grants will go to states that use data effectively to reward effective teachers, to support teachers who are struggling, and, when necessary, to replace teachers who aren't up to the job. And we also need to reward states that are placing outstanding teachers in schools in subjects like math and science where they're needed most. That's one way to foster the next generation of math and science teachers.
And, by the way, everyone has a role to play in training these teachers. So, universities and nonprofit organizations can launch programs like "You Teach" at UT Austin that allows aspiring teachers to get a math or science degree and teaching certificate at the same time. And businesses can follow the example of Intel and Microsoft by developing the software tools and cutting-edge technologies that prepare today's students to be tomorrow's teachers.
So, we know we need better standards, and we know we need excellent teachers. But we also know that a number of chronically underperforming schools will require an extra effort to get back on their feet. Roughly 5,000 schools across this country, the bottom 5 percent, fall into this category. In fact, just 2,000 high schools produce over 50 percent of America's dropouts.
Now, there's no silver bullet when it comes to turning these schools around. We know that many of these schools are in very tough neighborhoods, and kids are coming to school already with some significant problems. And the most effective and innovative approaches will be developed outside of Washington, in communities across this country. The best ideas will come from educators, who are helping a young man who is far behind to catch up or helping a young woman master the English language or going the extra mile for a student with special needs. Change will come from the bottom up. But what we can do, all of us in federal government, is reward states that are pursuing forceful and effective and consistent approaches with "Race to the Top" grants.
There are a number of different strategies that school districts are employing to fix these schools that are in such tough shape. One strategy involves replacing the principal, replacing much of the staff and giving the school a second chance. Another strategy involves inviting a great nonprofit to help manage a troubled school. A third strategy involves converting a dropout factory into a successful charter school. These are public schools funded by parents, teachers and civic or community organizations with broad leeway to innovate. Now, we can't hold charter schools to lower standards than traditional public schools. If a charter school is falling short year after year, it should be shut down. But if we're holding charter schools accountable, and if we are holding them to a high standard of excellence, then I believe they can be a force for innovation in our public schools. And that's why I've encouraged states to lift caps on the number of charter schools that are allowed, something being done in Louisiana, Indiana and across the country.
And that's why we will reward states that pursue rigorous and accountable charter schools with "Race to the Top" fund grants. Better standards, better teaching, better schools, data-driven results. That's what we will reward with our "Race to the Top" fund. But, as I've said before, fixing the problem in our schools is not a task for Washington alone.
It will take school administrators, board presidents and local union leaders making collectively bargaining a catalyst and not an impediment to reform. It will take business leaders asking what they can do to invest in education in their communities. It will take parents asking the right questions at their child's school and making sure their children are doing their homework at night. And it will take students -- I'm not worried about Matthew, but all the other ones, including my daughters -- showing up for school on time and paying attention in class.
Ultimately, their education is up to them, it's up to their parents, their teachers. It is up to all of us. I'll never forget a school I visited one day when I was a community organizer in Chicago. As I walked around the school with the principal, I remember saying to her how wonderful it was to see all these kids full of energy and hope and the spark in their eye. And when you asked them what they were going to be when they grew up, they said, we're going to be doctors and lawyers, and they all had these big dreams for the future. And I remember the principal saying that soon, all that would change, that in a year or two, something would shut off inside as they began to realize their hopes wouldn't come to pass.
Not because they weren't smart enough. Not because they weren't talented enough. But because they didn't see a pathway to success. And that's true of too many children in this country. Maybe they don't have a great teacher. Maybe they don't find their classes exciting. Maybe they aren't being challenged at school. Maybe their parents aren't pushing them the way they need to. Maybe nobody's setting high expectations for them. Maybe they can't afford a college education. Maybe they don't know anybody who's ever gone to college.
And the reason you're here, the reason Arnie's here, the reason I'm here is to make sure that we are giving all of those children, all our children the pathways they need to make the most of their abilities, to make the most of their opportunities, to make the most of their lives. I am absolutely confident that if I do my part, if Arnie does his part, if our teachers do their part, if you do yours, if the American people do theirs, then we will not only strengthen our economy over the long run and we will not only make America's entire education system the envy of the world, but we will launch a race to the top that will prepare every child everywhere in America for the challenges of the 21st century.
I'm convinced we can do that. But it's not going to come easy. It's not going to come quick. We're going to have to have staying power. We're going to have to be consistent. We're going to have to put the interests of our children ahead of our own parochial interests. But we have no choice. And I'm absolutely confident that we can make it happen.
Thank you very much, everyone. God bless you.
PHILLIPS: OK, usually we're talking about health care reform, but today it was education reform. The president of the United States there at the Department of Education. He and Secretary Arnie Duncan, you saw there live talking about putting out more than $4 billion in stimulus money to bankroll reform in America's schools. It's called "Race to the Top."
So, we'll follow up on those grants, and if, indeed, this goes through and how of course they're working out as the president not only pushes for health care reform but also pushing for education this week.
Now, we're pushing forward to the next hour. You're looking at an alleged -- all right, we're going to take a quick break. More from the CNN NEWSROOM right ahead. I apologize.
(COMMERCIAL BREAK)
PHILLIPS: Well, I know a lot of you are happy about more cash in the paycheck because minimum wage went up today, $7.25 an hour. That's a hike of 70 cents. So, it's just a few bucks, right? Well, for some mom-and-pop businesses, it could add up to a huge burden, one that they won't be able to bear. Businesses like Slice-O-Rama Pizza Shop, just outside Atlanta in Lilburn, Georgia.
Co-owner Terry Odom hoping and praying that she can make the payroll. But she says the recent string of minimum-wage hikes is killing her pizzeria. Terry is actually joined by her daughter, Kimberly, a Slice-O-Rama worker who's about to get a raise, so she's pretty happy.
Once again, we want to keep the peace between the mom and the daughter. Guys, thanks for waiting out through the president's speech. I sure appreciate it. Kimberly, we had a chance to talk to you. You're excited about a pay raise, of course. It helps you pay the bills and keeps Mom happy on that front. But at the same time, Mom, you're pretty stressed out about this because day by day, you're just trying to make ends meet. Why are you concerned about the minimum-wage increase?
T. ODOM: I think as a mom-and-pop store, it hurts us. It increases our payroll so much where we're already pinching every penny. Over the last couple of years, we've seen our commodities almost double. We held out with our prices as long as we could, finally going up about a year ago. So now, I'm in this position where I'm forced to raise minimum wage. And does that mean I go up on my prices? Do I let employees go? Or do I finally close my doors?
PHILLIPS: And that's a tough position to be in. So, what are you going to do? Are you going to have to kind of have a family meeting? Are you going to have to go over all the bank books? How do you do this, Terry?
T. ODOM: I think it's a matter of, we're going to have to just sit down and look at our books, you know, look at, you know, where we cut every way we can. You know, we count on our loyal customers. We do very little advertising just because that's another expense we chose to cut, getting the word out about us. But it's hard making the minimum wage, making our bottom line go up at least, you know, a minimum of $4,000 last year. And that was what we had that last year, and now I've got another $4,000. So, we're looking at $8,000 on my bottom line.
PHILLIPS: Wow. And Kimberly, you know, this has got to be so hard as you look at your mom and you see the family business struggling. But at the same time, that's 70 cents more an hour that can go towards your books, your cell phone bill. I mean, it helps you, right, in many ways?
K. ODOM: Yes. I mean, it is going to mean a little more money to where I can afford things a little easier. But at the same time, I don't want to be happy that it's hurting my mom. And since it is our family business, it's hurting me too. It's kind of not fair.
PHILLIPS: No, it isn't fair. It is a struggle. And Terry, I know you feel this really forces your hand in a time where you're all really struggling right now, right?
T. ODOM: It does. And you know, another important thing is, you know, most of the people we hire are younger school kids. Most of those kids live at home. They don't depend on this money to survive, whereas some of our older workers, you know, they depend on that.
So, when I'm mandated to give minimum wage at $7.25, that takes away from what I can give my long-term employees a raise. Then it cuts back on theirs as well.
PHILLIPS: That's a point well made. We're at the top of the hour, guys, so I'm going to do this for you on national television because I know you're a hardworking business. Everybody that's watching right now, go to Lilburn, Georgia, Slice-O-Rama Pizza. Hopefully this helps, guys. I know how hard you work.
Kimberly, stay in school. Terry, stay strong. We're going to follow up on your business, OK?
T. ODOM: Great. Thank you so much.
PHILLIPS: All right. You bet.
K. ODOM: Thank you.
PHILLIPS: Oh, Terry and Kimberly Odom, you are so welcome. Go get some pizza at that shop. We're definitely going to order for the team.
