Thank you. I am pleased to discuss the link between education and our economy. Our economic power is determined by many factors. But the most important is education. The quality of our education system is directly responsible for our economic success.

Over the past century, we've done pretty well. In the past, millions of children have received a quality education, generation after generation. Year after year, our children study mathematics, literature, science, language, art and other subjects, just as we did in our childhoods. There has been much success over the years. Each of us owes much to our parents, teachers and other mentors who have given this lasting legacy to our country, through sacrifice, hard work and dedication.

But the truth be told, not everyone has been included in our educational success. And maybe in the past we turned a blind eye to underachievement or just shrugged our shoulders. Many of us thought that some children simply didn't have the spark for learning, or that some children simply couldn't learn.

Well, that kind of thinking is changing. We live in a new world, with new challenges and rapidly changing dynamics. An evolving global marketplace still finds its most creative energy and economic power emanating from our country. But there are growing economies in Eastern Europe and the European Union, India, China and even in parts of Africa. There has been recovery in Japan and among our other Pacific competitors. Our days of unchallenged dominance are over. This intense competition is a central fact in our new century.

So we have to examine every aspect of our economic future. Anything less would be irresponsible and catastrophic. And that examination must begin with our education system.

Most people aren't aware that last year we spent more than half a trillion dollars on K-12 education. This was on the local, state and federal levels. Our nation's education efforts are a large financial endeavor--rivaling spending on defense, agriculture, transportation, telecommunications and the entertainment sectors.

Education may be the industry upon which all others depend. Thriving national and international economic policies are dependent on sound national education policy.

We pay a steep price when we do not educate children. Poor education ripples out to touch all of us. It affects the business community in many ways, such as in:

• substantial remedial education costs,
• longer on-the-job-training,
• more workplace accidents,
• greater health expenses, and
• lower productivity.

These costs are known and well-documented. For example, a study done in Michigan by the Mackinac Center for Public Policy found that more than a third of Michigan's students leave high school without possessing basic academic skills, forcing employers and colleges to make up the difference to the tune of $600 million annually in Michigan alone.

But there are other costs. Crime has been linked to a failure to educate; poverty, too.

And even relocation costs. There are now many corporations who turn to labor markets in other countries with employees who are well-educated--better educated than many of our employees--and less expensive.

The availability and quality of education are linked to every aspect of life. Education is also important in the war against terrorism. Education is crucial to fostering tolerance, partnerships and international cooperation. You probably know that soldiers and teachers have worked to revitalize the Iraqi school system. They have re-opened schools, organized relief efforts for school supplies and textbooks, and provided security for students and schools.

There we see the power of education in action. It is an important way to build a better future in Iraq. President Bush recently said that our goal in Iraq "is not only to defeat an enemy; it is to give strength to a friend--a free, representative government that serves its people and fights on their behalf." We can do that through education efforts and through other actions. The president recognizes that a free Iraq will deny terrorists a base of operation; it will spur reform in the region; and it will increase the safety and security of the American people. Achieving that goal is a substantial undertaking. The path from dictatorship to democracy is not an easy one. But as President Bush recently said, "A representative government that protects basic rights, elected by Iraqis, is the best defense against the return of tyranny--and that election is coming." And America and the entire world will be safer.

We can look at other countries, too. Globalization has made quality education imperative. In the past, graduating students competed with job seekers in their community or country. Now our graduates compete globally. There is no longer any guarantee of employment with just a high school diploma. Even a college diploma may not be enough. We have entered a new age: the 21st century is now a service economy dependent on technology, innovation, information and technical skills. We need what are called "knowledge workers." And knowledge workers must be well-educated. Marginally educated or undereducated workers are not in high demand.

You see this in Michigan, where you have both a manufacturing-based economy and an information economy. The demand on all levels is for knowledge workers. You see this even on the assembly lines. If you walk around the floor of any automobile or truck manufacturer, the use of computer technology is astounding. Skills in reading and mathematics are prerequisites for almost every manufacturing job. In the past, employers had jobs for both brawn and brains. Now, almost every job is highly dependent on intelligence, the ability to communicate and high-level computer skills.

The United States is economically powerful now. We must retain that position of strength and stability. One recent commentator called our economy "the job-creating machine." We are creating jobs at a rapid rate. In this country, new job growth has been phenomenal in the last few months, with almost 300,000 new jobs created last month and the month before, with strong growth in all segments of the economy, including manufacturing jobs. We can be competitive in the foreseeable future. Our workers can be the most sought-after, highly recruited, most desired workers in almost any industry. But this will happen only if our workers are highly qualified, educationally prepared, and well-trained.

Unfortunately, all of our students are not ready for this new environment. Millions of students are mired in mediocrity, denied a quality education. The vast majority of those left behind are African American, Hispanic, special-needs, English learners, or low- income. For various reasons, they have been passed on and passed out.

How bad is it? Well, many students do not read at their grade level; some are years behind; some cannot read at all. For example, by the time they reach 12th grade, only one in six blacks and one in five Hispanics can read at grade level. Math scores are even worse: only 3 percent of blacks and 4 percent of Hispanics are testing at the proficient level. It is an outrage. In Michigan, 70 percent of African American fourth-graders are below basic levels in reading, compared to 25 percent of white students. And 52 percent of Hispanic students are below the basic reading level.

We are witnessing an emerging de facto educational apartheid. This is no exaggeration of the facts. Millions of children have been left behind. Millions! Again, we know exactly who these children are: our most vulnerable. This educational divide is cruel, vicious, demeaning, disrespectful and degrading. It is intolerable!

We have a moral imperative to act! There are some who think the education debate is about politics or power. That is a misguided view. This debate is about the future. It is about jobs, choices in employment opportunities, economic security, fiscal freedom and secure benefits. It is also about personal growth, intellectual development and the joy of learning. A caring, compassionate nation cannot leave even one child behind. In a highly competitive global economy, anyone left behind is doomed to economic darkness, a life in the shadows, with little opportunity and no hope for economic security.

This achievement gap will not be corrected by simply spending more money. We now spend more on education per pupil in grades K-12 than any other country except Switzerland. And if you include college spending, we are the biggest spenders. Yet, our students are about average when compared to European or Asian students. The education system itself needs to be reformed--revolutionized!

Let me make this argument another way: the best investment in business is an investment in education. Many corporations realize this. A recent study by the United States Chamber of Commerce and Boston College found that:

• 48 percent of the companies surveyed considered K-12 education as one of the social issues about which they cared most;
• 32 percent said that the performance of the public schools is a top social issue that will affect long-term business performance; and
• 59 percent said that business should play an active role and be "part of the solution" for problems in K-12 education.

In fact, education was the number one social issue to which businesses felt they were in the best position to contribute.

We are coming back to the link between education and the economy. The past is prelude. A century ago, company towns often depended on business to finance the school system. The business felt an educational stewardship to the families of its employees. Now, businesses are more diversified, and cities are home to a multitude of corporations. But the need for educational stewardship remains. And many businesses have stepped forward to assume that stewardship.

You can see why if you take a broader view of economic trends. The National Center for Economic Statistics (NCES) found that the productivity of the U.S. workforce is a primary determinant of our standard of living. But since World War II, worker productivity has grown more slowly in the United States than in any other industrialized country. We still have high productivity, maybe the highest. But other countries are catching up. If we want to maintain a high standard of living, we must make even further gains in productivity.

NCES also found that growth in educational attainment has been an important source of growth in worker productivity. Educational attainment improves workers' employment stability, enabling educated workers to maintain their jobs or to quickly find new ones in changing economic conditions. Workers with higher educational attainment are unemployed less and earn more than workers with lower educational attainment.

That is why the No Child Left Behind Act is so important. President Bush and the Congress have instituted a revolution in education designed to vastly increase the quality of education and make it available to all of our children--every single one.

Every child can learn. Like a successful business, the No Child Left Behind Act introduces measurement of progress, makes the system transparent and accountable, and introduces consumer choice. These ingredients ultimately make the system better and provide a better product.

This law can be the salvation of our schools. This is a workable law. It is a necessary law to guarantee a quality education for all children, making the education system more inclusive, fair and just. It is a law that will help preserve our country's economic and political leadership throughout the world. Perhaps more than any other law, this one is our best hope for the future of America.

There has been much misunderstanding and confusion about the law, leading to some mistaken charges about federalism, funding and flexibility.

Let me address each in turn.

Let's start with federalism. The No Child Left Behind law requires the states to set their own standards for teacher quality, for testing, for measurements of adequate yearly progress, and for many other areas of educational accountability. The actual standards are determined by the states themselves because they are in the best position to do so. In other words, the people of Michigan set the standards for Michigan's schools and children.

I do think it is a reasonable expectation for taxpayers to ask states to set standards. I would think every state would agree. We have asked that fourth-graders read at a fourth-grade level, that children read and compute math at grade level, and that they have the skills we expect. That should be the goal of public education.

Let me emphasize this point: the standards are nothing more than the state's assurance that the state itself will do the job of successfully educating its children. There is nothing unreasonable about that as an expectation or as a condition for federal funding. We are only asking that the state do its job, and do it on its own terms.

Funding has also been an issue. The president has set federal support for education at $57 billion for Fiscal Year 2005, a 36 percent increase since he took office. This means that federal education funding for Michigan will be $3.6 billion in 2005, a 47 percent increase since 2001.

In my view, as well as in that of several independent experts and think tanks, this law is adequately funded. We have calibrated the money necessary to implement the law and provided it. Several studies demonstrate that the funding is adequate. Last week the General Accounting Office released a study that shows the law is not an "unfunded mandate." Massachusetts State School Board Chairman James Peyser and economist Robert Costrell said in a study that the money is there. A study out of New Hampshire said the same thing, as did a study by Accountability Works. Please note that these are all independent experts who do not lobby for increased federal funds.

Another area of confusion concerns flexibility under the law. There is much flexibility. This is not a "one size fits all" law, as some have argued. There are important provisions that allow state and local governments to shift other federal education money to meet their particular needs at the local level.

And we have been working on regulatory actions that will help state and local school districts. Since passage, I have worked on a progressive timeline to utilize the flexibility in the law, while at the same time holding states accountable to the taxpayers. This is a balancing effort, and that process of balanced policy development is often missed or mischaracterized.

Reform is vital for our future. If we can improve the education system, we can improve the corporate bottom line. And, I also ask you to help because the bottom line isn't the only line. This is about the future of our children. Each one of us wants the very best for them. And a quality education gives them a good start in life.

Today I ask that you help us revolutionize American education. We must work to give each child a quality education, which represents personal fulfillment, intellectual growth and future opportunities.

If we can make American workers the best educated in the world, we can accomplish many things in the future. We will help our companies stay competitive. We will keep jobs here. We will help new graduates find work and help them stay employed. We can also help every student discover the joy of learning. We will teach greater respect and regard because our schools are more inclusive and fair. We will improve education by raising educational levels for all, not by dumbing down learning. We can seize a future that will be better and safer for our citizens.

We can vastly expand the range of possibilities for our citizens and our world.

Together, we can do all of this and more. With vision, determination and courage, we will give every child a quality education--every single one of them.

Our work begins now, one child at a time, with every child included. We will leave no child behind.

Thank you.

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