 And welcome to the New America Foundation. On behalf of our workforce and family and education policy and fiscal policy programs, we welcome you to this discussion of debt and budgets, education policy, and the relationship to the future and well-being of children in America. We thank the Annie Casey Foundation for its leadership and support in this area. And Gene, one of our speakers, has a handout that's going to go around and sign up, which he'll pass around an opportunity, if you're interested, in some of his work. So he's going to pass that around for your consideration. Our nation's long-term debt trajectory continues to be alarming to many of us. Despite some recent good news, the federal debt is projected to rise to nearly 76% of GDP by 2023. And its continuing upward path is a troubling for our long-term nation's investments unless something is done. Our debt remains unsustainable in the long term, and there's no plan in place to slow its growth over the long term. Congress has acted with some with sequestration, but one could argue that sequestration is politically difficult to sustain, focuses on the wrong areas, hurts the vulnerable, and offers no savings for the long term. And the inaction on the debt to this point in Congress continues to raise serious questions about our nation's ability to make investments in many of the programs and areas where the federal government can make a difference. In addition to fiscal policy, there are areas that we are here to talk about today that focus on the benefits for children and youth as they relate to fiscal issues. While political leaders have different priorities in many areas, leaders from both parties understand the imperative of investing in the next generation through human capital. Yet some experts argue that the percentage of federal spending for children is likely to decline over the next decade, in part because of our fiscal quandary. Moreover, the fiscal situation in localities and states is equally pressed, impacting on their abilities to make investments in the next generation. And meanwhile, with the president's budget submission this spring and discussions in Congress about education reform and overall spending in the wake of both the Budget Control Act, the growth of the Pell Grant program, and other issues, we have plenty that we can talk about today when it comes to education, fiscal policy, and the future of children. And fortunately, we have an absolutely stellar group here today to help us think through some of these issues. And our best bet is to hear from them directly. We are so pleased to be joined by Margaret Spellings, former Secretary of Education, among other distinctions, and currently the leader of the Margaret Spellings and Company. James Quall from the Domestic Policy Council at the White House, Belle Sawhill from the Brookings Institution, Eugene Sturley from the Urban Institute, and Jason DeLyle here from New America Foundation. Friends, I so appreciate each of you taking time to share your wisdom with us today. Thank you. And as always, we appreciate you being here, and we look forward to your questions and our discussion that will follow, and for all those who are joining, watching on the internet today. So to begin with, to provide a federal education budget perspective to help root our discussion today, let me introduce Jason DeLyle, the director of our federal education program here at New America. Jason. Okay, where's my, here we go. All right, thanks. David said I'm Jason DeLyle and the director of the federal education budget project at the New America Foundation, and I wanted to sort of give you the lay of the land of what I think is the sort of fiscal framework that Congress, at least in a little bit, the White House is operating under and how it sort of sets up a little bit of what I would call a headwind for spending on major education policies or even those that are part of current policy. Now everybody is familiar with the sequester, and we all know the sequester happened and it's come and gone, but the sequester was part of a larger policy called the Budget Control Act that was enacted in 2011. Most of us understand that as the, oh yes, that was part of the debt ceiling agreement. So the debt ceiling agreement was this framework called the Budget Control Act, which did set up the sequester, but it also set up caps on discretionary spending. And I've put them up here just to show you the sort of trajectory. The Budget Control Act limited future appropriations at about a trillion and growing, which is this top sort of light colored line. This was the agreement. It was going to rein in spending. This is where these sort of trillion dollars in savings numbers come from, where essentially Congress would agree to abide by these caps on future appropriation spending and then that by abiding by those caps, there would be savings or deficit reduction, even though you still have an increase in spending, it's from a lower baseline than the trajectory we were on. So the first red line segment here is sequestration. Essentially, when the super committee fails, remember the super committee, so the super committee failed, that actually was really important. I know we've sort of forgotten about it and nobody talks about it anymore, but remember, when the super committee failed to find deficit reduction and have that enacted, that triggered sequestration. And so that's that first segment of the line there that we saw where discretionary spending or appropriation spending was cut from the level it was at before, somewhere around I think it was 60, 60 some billion, a significant cut. Here's what nobody's talking about. There is a further cut coming. It's not going to happen through sequestration, but the spending cap on all appropriations that Congress is going to debate this year requires Congress to reach a total level of funding that's below the level that was reached by sequestration. So for all the sort of bluster and discussion about the painful cuts from sequestration, Congress essentially is going to walk through an appropriations process if they follow the caps in the budget control act, which are law by the way, there's a sort of another round of cuts coming. And then we have further increases. Now, if you were to look at when does the appropriations limit get back to about where it was in 2012, not adjusting for inflation, that's somewhere around 2018. It would be later if you were adjusting for inflation. So this is a significant constraint on domestic policy and even defense spending unless you're a House Republican. If you're a House Republican, you want defense spending to essentially get healthy and be restored to where it was before sequestration, but you also, in the Ryan budget and the budget that the House Republicans have passed, want to abide by this new lower cap that I showed you that further cuts beyond sequestration in total appropriations spending. Well, how do you do that? How do you make defense get back to the level of funding it was at before sequestration but stay within this new lower cap while you make the labor HHS, education, subcommittee and all of its appropriations bills eat the difference. So what this is, is this is the amount of money that Congress has allocated each year to the Labor HHS and Education Appropriations Bill. And it's the limits that they're supposed to work within when they're appropriating money for those agencies. The House, the number that they released earlier this year would put the total limit for labor HHS back to where it was in about 2001, 2002. Margaret, do you remember that? So essentially the House Republicans would, if they got their way this year, would erase almost all the funding gains for education policy made under the Bush administration and maybe even then so. Although we don't know how this is gonna work out. This is a broad allocation for labor HHS and education and it's not final in the Senate, which is this top light blue line has a different plan. As you can see, they would essentially increase funding, but of course there would have to be an agreement to turn off the Budget Control Act to do that. So that's another significant sort of headwind where you have the House Republicans who are simply following what they believe is the Budget Control Act and the law. That's the kind of number that they arrive at for an allocation for the education and other domestic initiatives. That's a significant cut indeed. So here's the other sort of headwind. So I wanted to talk about two basic constraints on longer term or even near term fiscal policy for education. This was the first, the Budget Control Act and sequestration and this is the other one. This is the Pell Grant Program. The bottom two lines are the key K-12, the large K-12 programs, Title I grants to local education agencies and special education grants since 2001. And the green line is Pell Grant Program. I mean, people realize that the Pell Grant Program is expensive and that funding has doubled, but I don't think people quite understand that that's happened within the context of more or less flat line funding for the other key K-12 programs. Why is this sort of a headwind and not so much an achievement? It's because this larger funding for the Pell Grant Program is not necessarily in the budget baseline. So going forward to maintain this level of funding for the Pell Grant Program, Congress is either, it's either going to have to come from other programs, so other higher education programs, student loans or other policies altogether or tax increases. Or it's gonna have to come from education programs within the appropriations process or Congress will simply have to ignore some of the spending caps that are in place and deal with that issue. So this is another, and the increases in the Pell Grant Program I think are a big part of the sort of, as you're witnessing right now in the debates around student loan interest rates, there is very intense political pressure for the federal government to do more and spend more on financing higher education and it's resulting in graphs that look like that. And I think that's another significant constraint and that we're going to be facing and I think that Congress is going to be facing in the coming years with respect to budgets for education, children and families. So I'll turn it over to the other panelists now. Thank you. Thanks, Jason. I appreciate it and I ask Gene to come up now and as we think about the impact of the fiscal trajectory we're on in the medium and even long term, let's invite Gene Stirli to come up and talk a little bit about some of his work as it relates to fiscal policy and particularly our ability to make investments in the next generation. Gene? Thank you. Some of what I'm going to present here comes from work with a number of my colleagues at the Urban Institute. We've been putting out an annual series called Kids Share. If you're not on to receive that or you don't know about it, put an additional note if you sign up for my column that you want to get the latest copy. We should have a new version out in about another month. What we try to do is we try to track spending on children, including education from year to year just to see how it's playing out. I'm going to talk a bit more about the intermediate and the long term in terms of spending on children and education policy. The main point I want to make, if you don't remember nothing else, is that we are not going to be able to put money into education. We're not going to be able to put money into children unless we gain some control over the budget. And by control what I mean is in some sense let's control, excuse me, let's control from the past in more of an enabling of our future. That is, to some extent, we need to provide a more discretionary budget than we have and one more traditionally we've had in the past. And here I want to distinguish, because this always gets complicated, I want to distinguish between past efforts and whether they've been successful. So past efforts in health, past efforts in education, past efforts in social security and where we're going to go in the future. And actually at the end of the day I think we're actually living at a time of opportunity. And I'm going to show you some numbers that indicate we're actually going to probably under a Republican or a Democratic budget spend substantially more, say a decade from now than we are today. But that basically children are caught in the crossfire between a automatic growth in a number of programs, particularly health and retirement and lower taxes that refused to even pay our bills to such an extent that there's almost nothing left in the budget for these particular programs. I say it's a time of opportunity because in a traditional budget, historically the budget was largely discretionary. So if you went out over a period of 10 years or 20 years, you would find the amount of revenues whether it was under a tariff or an income tax would increase over 20, 25 years, 3% growth in the economy. You might have double the number of revenues. If you're in a discretionary budget and the money hasn't been pre-allocated, then you have a lot of decisions to make as to what to do with that money. You might, and usually did, the country usually did spend it on different programs. Sometimes they enacted a tax cuts as when Thomas Jefferson lowered the tariff rate from that which was enacted under Alexander Hamilton and George Washington. But for the most part there was discretion in the budget. And what I'd like to suggest to you is that we actually live at a time of opportunity if you look at the raw numbers. We look in a time of austerity if you look at where the numbers are gonna go. So this next slide I'm gonna present to you comes from, it's about a year old, it comes from the last kid share budget where we actually allocate all the spending, the additional spending in the budget to different programs. And what it shows you, this is President Obama's proposed budget by the way. So for those of you who are more on the Democratic side you might say this is the type of budget you think you wanna favor because it's put forward by the president. And this shows you where he would spend money in 2012, 2022 versus 2012. And what you'll see is that about $900 billion of additional spending, additional spending would go for Social Security Medicare and Medicaid, excluding children by the way. This excludes any spending on children within those programs. About 900 billion or 876 billion would go for those programs. Interest on the debt would rise by 270 billion. One reason interest on the debt is rising is not just simply because we expect interest rates to rise, but because over the years we've refused to collect enough taxes to pay our bills, right? So that's adding onward and onward to these things. A defense would go downward. That's partly because of getting out of Iraq and Afghanistan, but it's also because it's subject to the types of cuts and sequesters that we were just discussed. The children's budget would basically grow about zero. Now mind you, the economy by this point is projected to be 20 or 25% larger. So it's share of the economy is actually declining fairly significantly. And if you took out the additional health care being spent on children, the non-health budget for children is actually going pretty much into a tailspin. And that's President Obama's budget last year. Now we haven't redone the children's numbers, but we have redone some numbers. It's not quite the same graph. From his current budget. This time I've added in the tax subsidies to present a more broad spectrum on this. So this is his current budget. Under his current budget, if you carry it out to 2018, now here I'm only going out five years from 2013, you'll see that largely on the spending side, we still have net interest, health care and social security dominating the spending increases. But you'll also see here that I've added in the tax subsidies. So even with the extent to which the president wants to cap these tax subsidies, you'll still see they grow by about $300 billion. But again, look what happens to the under mandatory part of the budget. That includes things like formerly called food stamps. Look at domestic discretionary spending. It goes negative. And defense again goes negative again. So that's how we've decided to allocate the money. In this case, I've added in the tax subsidies. We're going to get to a number not too far from a trillion dollars over five years, mainly because I've added in the tax subsidies. So there's more money. We are spending more money, but this is what we have decided under our current budgets, our current budgets to spend on. And by the way, if I took a budget, we don't have all the details, but if you took a budget by the Republicans or by Congressman Ryan, you wouldn't find numbers that different. You'd probably find the discretionary going even more negative, even more into a tailspin, but you'd find the growth largely over on the left being very similar. Maybe the defense wouldn't go down quite as much. So those are the budgets that under both political parties were in. And so the question is, is this the budget that we really think Democrats or Republicans really want? And I suggest it's not. And the question is the next, how do we get here? Well, some of it has to do with the way we actually index, this is a complicated subject, I don't just mean index for inflation, that we index different programs to grow or decline. So these are just a couple of examples. So here's the child tax credit. It's an easy one to calculate because we know its number, it's $1,000 per child. It's not indexed for inflation. And by the way, it is actually scheduled in a few years to actually drop back from $1,000 to $500. So you take into account inflation, everything else. This is what we would give to a newborn child in 2015 versus a newborn child in 2010 over that child's lifetime. So this is about 18 years of child credits. And on the right, we have the extent to which social security and Medicare benefits not at current levels, which in some cases, at least in terms of the annual benefit, I think are too low for moderate income people. But lifetime benefits and social security and Medicare would go up. So those of you retiring in 2015, you're gonna do a lot better than those retiring in 2020. For those of you who are young in the population, my generation is promised on a lifetime basis, on a lifetime basis, close to a million dollars in social security and Medicare benefits. Those of you who are younger, who are about in your 30s or 40s, you're promised about a million and a half dollars. This is the current dollars in social security and Medicare benefits. So that's where, again, a large amount of the growth in government goes. Their index to grow, these other programs are indexed either to stay constant are actually declined. Those are sort of the details of how these programs work. And by the way, these are just raw numbers. These are numbers, these are real numbers. They're not a Democratic number or a Republican number. These are actually numbers from the budget. There's no Yogi Berra math here. Yogi Berra once said that 90% of baseball was mental and the other half was physical. So the numbers do add up. So here's one more take on it if you wanna know about size of programs. So this is again, 2022 versus 2012 just to show you individual programs. These are programs we often argue over on the left such as SNAP, formerly called food stamps, the ITC family support. You'll see things like those programs either decline or remain relatively constant. Again, because for the most part they don't have built in growth. You can see what happens to Medicaid, social security and Medicare again. So, and I want you to concentrate not so much even on the level, but on the growth. And my main message as I said at the beginning is if we can capture, if we can recapture control or some decision making, some discretion over that growth, that's to me is the only way we're ever gonna get more money into things like pre-K and a lot of other types of educational types, other types of expenditures. It's not an attack on current levels of spending in these programs. It's not saying we need to cut benefits for current retirees, but it is asking the younger among you whether that's where you want all the growth in government, all the government to grow. I wanna end with just a final note or two and I don't really have a lot of time to do this about how did we get to this point in time? This is an index that I developed with Tim Roper and we call it a fiscal democracy index and it's basically nothing more than what percent of the budget is left on a discretionary basis after you take into account mandatory programs. Now mind you, it's not a liberal index and it's not a conservative index because two things make this index go down over time. If you cut taxes and don't pay your bills, then the percent of revenues you have left over a discretionary basis is necessarily less. And if you have automatic growth in programs that's absorbing the growth in government, the mandatory programs of government, that too cuts back on the index. And what you'll see in this graph is if you look here in 2009, for the first time ever in American history, every dollar of revenue, every dollar of revenue had been spent before Congress walked in the door. So anything that Congress wanted to do on a discretionary basis, by the way that includes the education, large portions of the education budget and large portions of spending on children. In fact, large portions of spending on the basic functions of government and many of the things that the Middle Ages get, not health and retirement, basically had to be spent far out of a deficit. And we got here both because of this as I say, this growth in the automatic side of the budget, what's happening automatically. But we also got here because Republicans, largely responded by saying, well, you know, if Democrats can give away money and get credit for spending this money, we'd like to do it too. There's a guy by the name of Jude Wyninski who was an editorial writer for the Wall Street Journal, the home of extreme supply side economics. He argued for something called a two sanitary in the mid 1970s. He argued that, you know, Democrats got to be Santa Claus and Republicans had to do deficit cutting and that was a losing proposition. He argued it was a losing proposition partly because he said it's bad supply side economics. But his political side of his argument was we want to be Santa Claus too. And he wrote this article called the two sanitary, which basically said, at its heart, we need to cut taxes and not pay for them the same way we think Democrats are increasing spending and not paying for it. And that way we get to be Santa Claus too. And I would submit to you that by the time we got to the first decade of this century, we went from surplus to deficit more than we had any other time in our history because we had mandatory spending increases, we had discretionary spending increases, we had defense spending increases, and we basically enacted tax cuts at the same time. So we got Santa Claus in spades, if you want to, maybe at least two Santa Clauses. And the result of that type of policy was that we now have this budget where almost everything is far or dang because we don't collect enough revenues and because so much of it's mandatory. I don't think we're ever going to solve this issue about how to increase spending on children, on education. More broadly if we want to raise, expand our discussion for infrastructure for a variety of other investments unless we can restore some discretion to the budget. I'm gonna stop there and turn the microphone over to the next speaker. Great, Jason and Gene, thank you very much for those most helpful explanations. You know, I think about the challenge of the fiscal trajectory generally and if we even think about the long term, the really long term is we look out to 2030 or 2050 or even 2080 where 248% of our GDP would go to debt under current projections. The situation clearly is grave and it's grave on a couple levels which affect all of us. Gene mentioned the interest rates which are just starting to rise and that exacerbates the current trend. We want to have an economy which continues to grow and it's put at risk if the debt is not taken seriously. Entitlement programs are at risk, the economy's at risk, tax code remains inefficient and as we talk about today all of this impinges our ability to make investments, to have some reaction to things as they come up but to make strategic long term investments in human capital and one thing we take seriously here and I know all five of our panelists take seriously is the value of investments in human capital and so as we think about a long term federal budget to be able to find a way as Republicans and Democrats to come together to solve some of the fiscal, change the fiscal trajectory, there are a number of compelling reasons to do so and one of them is in order to make important investments that would otherwise be squeezed out in the next generation. Fortunately we have some of the most thoughtful minds on this subject and others who are with us to help us initiate the discussion today as we talk about it. I'm going to start with Margaret. Margaret Spelling's former Secretary of Education and from her vantage point in the education field and others has insights to these issues and others so I might start with you Margaret to share your reactions and your thoughts on this important topic. Thank you very much. So I think we'll all just stipulate the facts that have been laid before us and we don't need to revisit those. I'm proud now in my life after public service recovering bureaucrat to be affiliated with both the campaign for the fix the debt campaign as well as the U.S. Chamber of Commerce and just last week the chamber board launched and public education campaign around entitlement specifically because I think while you know you're a very elite audience and you know about this and you're paying attention to these issues I think our brethren around the country, our fellow citizens really do not understand the order of magnitude of these issues and what the implications are and in particular that the entitlement side of the equation is going to eat us all alive. In my Texas gubernatorial days as well as my early White House days we used to say and it's a you know worked on domestic policy as James does for a good while we used to say reform plus resources equals results and I think we are at risk of losing all of those dimensions. Obviously resources have been discussed but also you know the quid pro quos and we are now in education in this what I see as kind of a renewed era of local control which we tried for 40 years with a very anemic put the money out and hope for the best kind of well-intended federal role around some lofty and righteous goals I will say as part of the civil rights era which were the role of the federal government was to invest strategically around our neediest students be they higher ed students or K-12 so that got us Title I, IDEA, Pell, other student supports and you know enter the era of no child left behind and the gubernatorial Clinton and the convening of the governors and so on we moved through a period that started to talk more about standards and accountability and transparency data and results and I'm as concerned now about these resource issues as I am or I'm as concerned about the reform issues as I am about the resource issues because it appears to me that and there are it's this interesting political alliance on both sides of the aisle where we are retreating from many of those policies so this notion of no child left behind kids on grade level by the end of third grade and so forth we now are getting into a place where there's kind of a crazy quilt of state accountability systems supported by Republicans and Democrats alike I wanna be you know an equal opportunity offender here and the name of local control on the one hand let's let local school boards decide these things if black and Hispanic children ought to get to grade level or not and so on and so forth and they delight in the fact that well maybe we can under resource those things because you know the buck stops somewhere else so we have this sort of insidious and troubling but you know a coupling of a lack of resources and a lack of reform and my worry is that ultimately and we're already seeing it we're gonna see a serious retreat on results that we have made very significant progress particularly around the needs of poor and minority kids over the last you know 10 to 15 years. I also wanna pause for a second and talk quickly about higher education and I recently served on a task force led by the Council on Formulations that Condi Rice and Joel Klein chaired with Craig Barrett, myself and a number of others and basically it talked about the need for a federal imperative around education as a national security issue, as an economic issue as a moral issue and you know one of the things that I think we forget about we look at these in terms of the right now what is my student loan interest rate going to be next semester and I think when we and Belle will talk about this I'm sure you know do this under investing and under reforming if I can put my you know thumb continue to put my thumb on the accountability and the you know performance matters side of the equation you know we end up X number of years from now with a population that is not ready and prepared to be the next senior level of management or executives or leaders because they didn't get in the pipeline at the starting gate and so I think you know this story goes from bad to worse I will say that the other thing and I think this is why forums like this and I'll soon shut up are really important that we need to you know get bipartisanship and leadership around these issues on both sides of the aisle starting with the president and obviously congressional leaders, governors and others because right now everybody is off the hook for their own reason and it's sort of you know very dispiriting and discouraging and to watch while it all goes on in this sort of devil's bargain that we have about under investing, local control and a lack of reform. Margaret, thank you very much. Belle Saw-Hell has shared tremendous insights with me here at New America and our collaboration with the Brookings institution over the years and I appreciate her being here as well. Belle, will you share your perspective with us? Sure, thank you, David. You know one of the things that I've been arguing for a long time along with Gene Sterling and some others is that we need a new intergenerational contract by which I simply mean that we need to reallocate resources from the better off or more affluent elderly to younger families and their kids especially those that are lower income. And I think that you know some people look at that argument and they say oh you are preaching intergenerational warfare and I don't see it that way at all and I think we need to reframe this debate as follows. Everybody is young at one point in their lives and old at another point in their lives. Believe it or not I used to be a child. I look at myself in the mirror and say oh those were the days. However, the point is if you take this life cycle perspective then you realize that if we invest in younger people right now and we do it wisely we will get a rate of return over time and the magic of compound interest will work for us. Imagine that you knew an education program that returned five percent. Now they don't all do that but just assume there were some. Within 40 years a dollar of investment in that good education program would lead to a rate of return in terms of higher earnings and other benefits of seven dollars. That is simple arithmetic. That is the magic of compound interest and that's why I think we need to start thinking in terms of life cycle perspectives and in terms of a new intergenerational contract. Now I think that a big problem right now and I just wanna flag it is we don't have revenues and we don't have any new revenues and for political reasons that we are all very well aware of. And we're probably not gonna have a lot more. A lot of my friends on the left say, oh well we can do it all. We can maintain Social Security, Medicare, Medicaid, education, all these good programs. We just need more revenue. Well I think the problem is not only is there a political party that's opposed to that right now the public is not in favor of much higher taxes. They do believe we could maybe tax the affluent a little more but in general the American public is not like the French public. They don't want a much bigger government and they particularly don't wanna be taxed a lot more. So if we wanna free up resources as Gene has very carefully and convincingly shown, we're going to have to focus on entitlements. They are crowding out everything else as he and David have emphasized. There is the makings of a grand bargain, a political deal, a fix the debt kind of deal here. It's gonna require some give on entitlements and some give on revenues. But I'm not real optimistic it's in the process of happening right now. I do want to make the point because I believe it gets lost too often that right now is not the time for austerity. Jason talked about the cuts that were embedded in the Budget Control Act plus the sequester and then the stuff that the Republican house members are trying to do on top of that. That's just the Budget Control Act and the sequester and the expiration of the payroll tax cut by themselves. Just those three things are cutting the projected GDP growth rate this year in F. So that's the reason that's not, this economy is already fragile. We've had very high unemployment rate. We do not need austerity right now. We do need austerity for the longer term and we do need to put it in place as soon as possible. So this is not an argument for not taking an action. It's an argument for anything we do in the way of deficit reduction should be phased in slowly so as not to undermine the ongoing economic recovery. There are obvious things that we could do around which there could be some political compromise. The President has put on the table very courageously I think given the views in his own party, doing something to change the inflation index that's used for both taxes and entitlement programs, the so-called change CPI. I believe there could also be as part of a compromise some greater income relating of Medicare premiums. That would be part of my notion that we need to reallocate resources from more affluent elderly to kids and their families. But to get a political deal, you can't just do these things on the entitlement front without also either doing something on the revenue front or sweetening the pot for Democrats by making some of these investments in the younger generation. I can imagine a deal where you cut Medicare premiums for the wealthy elderly and then you invested some of the money in deficit reduction and some of the money in the President's pre-K program, proposed pre-K program. So there are all kinds of ways to skin this cat. And the other thing I would say to my friends on the Democratic side of the aisle is that they are too focused on the size of government and not sufficiently focused on who is it we should be helping and how should we be helping them? In other words, we should be focused more on the two criteria of fairness first and secondly, effectiveness and economic growth secondly and instead of just how much are we spending or how little are we spending? And I love Margaret's idea of reform plus resources equals results. I think that's exactly right. And I'm sort of saying the same thing and I'm just adding fairness and thinking about where the money is going and pointing out as Gene did that a lot of this money that's going to be spent is not means tested in any way. It's going to the elder. It's going to people like me. I get a social security check right now. I don't happen to need that social security check. It just comes. I actually went online and made a contribution to the US Treasury to reduce the debt. Now I didn't put my whole social security benefit in there but I did it kind of for symbolic reasons and to see how it worked. So let me say a little bit more about the fact that we really do need to be investing in education and science and infrastructure and the other things that are going to lead to economic growth and especially education. And that brings me to what Margaret was talking about. I would argue and suspect she might agree. Maybe there'd be a few differences between us but probably not a lot that we need to do more on pre-K. I like very much the president's proposal to expand access to pre-K and to work with the states on that and to incentivize the states to do more. He pays for that with a tobacco tax. That seems reasonable to me. We don't need people smoking. We should make it more expensive for them to do so. On the K-12 front, we badly need reform as Margaret said. I think it's quite a good sign that most of the governors have now agreed to the so-called common core standards which will lead to more accountability and less focus on state standards which as Margaret said, can be all over the map and not very rigorous. We are talking about at the state level particularly new ways of selecting and compensating teachers. The administration's raised to the top fund I think incentivized states to do some good things on that front. I met recently with the governor of Delaware. Delaware was the top ranked state, I believe in the race for the top competition. And if you listen to the governor of Delaware, they are doing everything right on the education front as far as I can tell. I don't know if you've talked to him. Post-secondary. Post-secondary I think is the area where reform hasn't yet begun or has barely begun. We spend $137 billion a year on higher education at the federal level. That's as you saw largely for Pell grants but it's also for student loans and for tax credits that are available to people sending their kids to college. And I've been doing a little bit of work on this recently and I thought, well surely there is good evidence and would you give a kid from a low income family a Pell grant that it is gonna have an effect on their educational success? Well I was surprised to learn that although there's some evidence that Pell grants increase enrollment in post-secondary education, especially in two year community colleges, there doesn't seem to be any evidence that they increase completion. And there are what we economists call sheepskin effects in education, meaning it's important to get your degree, not just go to college for a few years. There are some experiments going on now or some state level programs that are working more on tying student aid to performance. For example, you in West Virginia get a promised scholarship to go to college for free for up to four years if you maintain a certain GPA and if you take a certain number of credits. But so there's a whole conversation that in my view needs to go on about performance based student aid but I can't take the time to say too much more right now. I think at this point I should probably stop but happy to come back and talk about any of these issues. Great, well thank you very, very much. James Quall has been a leader in this space for many years as well. I first noticed his work in 1999 when he was serving in one of his various tours at the US Department of Education before among other things helping run the policy shop for the winning side on the last presidential campaign. And now serving at the White House as Deputy Assistant to the President and Deputy Director of the Domestic Policy Council. James, thanks for being here and I look forward to your perspective. Thanks, David. Follow the work of New America scholars closely and learn a lot. So it's always a pleasure to be here. A couple of observations that I have to offer. First of all, I think when talking about budgeting decisions, the type of investments that we're making, it's important for us to always keep a focus on what our goals are, which is not numbers on a page, but ultimately it is economic growth that is sustainable and that is broadly shared. So that is what the President was talking about in the State of the Union when he defined his three goals as making America a magnet for jobs, giving workers the skills that they need to do those jobs and making sure that hard work leads to a decent living. So fundamentally when we're talking about these budgeting decisions, we shouldn't be talking about individual metrics or measurements or policies without asking whether they translate together into the results we're looking for because after all, any set of investments no matter how well meaning are not gonna produce the results we want if our country is not fiscally stable and likewise a balanced budget isn't gonna produce the type of economy that we want if our roads are deteriorating and our young people don't have access to opportunity and workers don't have skills. So we need to be thinking about this altogether and trying to get to a framework that includes both investments and fiscal responsibility. Second point I would make is it is very difficult to imagine the type of economy that the President wants where the middle class is growing and where incomes are rising without education being a central part of that strategy. And we know that investments in education in the past have been responsible single-handedly for about one third of productivity growth. Productivity of course is the only route to higher living standards. And we know that a slowdown in educational attainment has been a big factor in the growth of inequality in this country. So we need to continue to make those investments. And the first thing that the President's budget does is eliminate the foolish across the board spending cuts that are damaging our economy and damaging some of the key investments that we're making and Jason laid out some of the magnitude of those cuts. We know that those cuts will continue to grow and over the next 10 years we're talking about annual cuts to head start of $500 million a year or more special education by $800 million a year or more title one by $1 billion a year or more. So we need to have a smarter approach to deficit reduction than those requests are cut. The President's budget also does include some very significant new investments in children and in education. And we're very proud of the preschool initiative that Bell mentioned. It's a historic attempt to create a new partnership with states to create universal preschool programs. It's fully financed by a tobacco tax that has the added benefit of saving over 200,000 lives. A tobacco tax of course is something that was passed recently to expand children's healthcare. It's something that almost every state has enacted within the last decade or so a tobacco tax increase. So this is something that we really think is a viable, smart and potentially historic investment in children and something that's done even in the face of all of the fiscal challenges that have been discussed. I know this is a knowledgeable room. I'm not gonna go through the many other investments in children, but we are very proud of a couple of other areas of maintaining our investment in WIC and SNAP for example because we know that nutrition for families and children is very important for their healthy development. And the President's budget also permanently extends the expansions of the child tax credit and the earned income tax credit that were enacted as part of the Recovery Act. Those two expansions lifted about one and a half million Americans out of poverty in 2010. So those are very significant steps to improve the well-being of children. So all of these investments do need to fit inside a framework of long-term deficit reduction and we need to make sure that the growth in entitlements are not choking off the investments we need to make in our future, including investments in our children. The President working with Congress has already cut deficits by two and a half trillion dollars over the next 10 years. That's about two thirds through spending cuts and the rest by asking the wealthiest Americans to pay their fair share. The budget that the President's proposed this year would be an additional 1.8 trillion in deficit reduction so that together would reach the $4 trillion target that independent economists have set for what we need to do to stabilize our country's budget and indeed CBO confirms that that would stabilize the deficit and put us on a track where our debt is shrinking as a share of our economy. The budget replaces the sequester, as I said. I think that is not a very smart way to think about addressing our long-term challenges. It does nothing to address the primary factors that are behind the numbers that Gene laid out, which are the retirement of the baby boom generation and the growing cost of healthcare. And it actually, since it turns off after 2021, it does nothing to improve our long-term fiscal situation. So instead, we want a balanced deficit plan that both permits the investments we want to make now and includes some long-term deficit reduction. So for example, Medicare finances. Medicare finances have been proving significantly in the last couple of years, partly due to the reforms in the Affordable Care Act, partly due to the slowdown in healthcare costs across the economy. The Medicare trust funds has been extended from 2016 when the president took office. It's now projected to last until 2026. Medicare spending at the end of the decade is now projected by CBO to be over $100 billion lower than CBO was projecting just a couple of years ago. So it is possible to make, oh, and this has all been done while Medicare benefits for seniors has been protected. In fact, they've been expanded with the addition of free preventive care and with closing the Medicare prescription drug. Donut hole. So we can make very significant progress on freeing up resources and addressing these long-run fiscal challenges if we do so in a responsible and a balanced way. The last point that I wanted to make is that even within our resource constraints, we need to think about how to make the most of the money that we have. And this was the point I think, or one of the points that Secretary Spellings was making. And Gene's number is sort of layout persuasively. I think the challenges we face and get in the absolute levels of investments, but there isn't an attempt or maybe I'd be interested to hear Gene talk a little more about how we know whether those dollars are being spent well or how do we get the most out of the resources that we do have. We have a couple of examples of creative thinking that we're pursuing. One is social impact bonds, which is an effort to make investments in things that we know are cost beneficial and capture those savings. There was an effort in Salt Lake City that I'm sure some of the people in this room are familiar with where J.B. Pritzker and Goldman Sachs are investing in an early childhood program. And they'll be reimbursed out of the savings out of reduced special education referrals. So we know that preschool investments pay off and we can actually use that to put those steps into action and find ways around budget constraints. Another example would be some of the higher education reforms that people are pursuing. So we know that there are ways to use technology, for example, that can both increase the amount that students learn and reduce the amount that those programs cost. There are also steps that states can take to better align their colleges and universities to reduce the amount of remediation to make sure that more credits transfer to help students get their degrees more quickly. So these are steps that would both promote better outcomes and likely lead to cost savings. A third example of creative thinking is something where Secretary Spellings has been a leader and could talk about far more eloquently than I, but the president has recently called upon the FCC to make investments in expanding broadband access to our schools. And that's a critical factor in enabling some of the education technology to reach our K-12 schools and keep up with some of our competitors. So that's a potential game changer and again a way to think creatively within our existing budget constraints. So I think it is important to keep in mind we do have a need to become more fiscally responsible, but it's not fiscally responsible to shortchange the investments we need to make in our future prosperity. It wouldn't be fiscally responsible for me and my personal life to not contribute to my retirement savings or not to fix a leaky pike. And likewise for us as a nation, it's not fiscally responsible for us to fail to make these investments that we need to make in our future. So thanks. James, thanks very much. I appreciate all five great insights and perspectives to share with us. And now we'll open it up to questions. I'm gonna start and then we'll have a microphone. Lindsay will have to go around and open it for everyone. But what we're gonna do, what sometimes I like to do is start with a question and we're really gonna start with our first speaker and Jason and go right down the line here and have an opportunity for folks to respond as panelists to anything you've heard from the other folks. And I'm gonna just suggest a topic that you can either take or just frankly respond to the other things that you've heard because you've even generated some internal questions. So for Jason, what comes to mind for me at some level is the post-secondary question that was raised by another panelist too in terms of reform on post-secondary, the impact of spending on Pell grants on the overall budget education elsewhere. Anything in the area of reform of post-secondary that you would like to share with us that you're advocating or working on? Yeah, I mean, in higher education, I forget who said it, someone mentioned that we haven't even really started reforms. We haven't even started a reform conversation in higher education. We still operate under this paradigm of where all higher education is good, more of it is better, it just needs to be paid for by somebody else and more so. That's essentially the paradigm that we live in and I think we're starting to see the chipping away of that mentality a little bit, either that folks are a little bit concerned with value now, there's definitely more price sensitivity and there's a push for innovation and reform to break down cost barriers. So I think that that's starting, but there's a long way to go and I think that there's a lot of promise in a discussion around what's value in higher education. People talk about access to higher education but I think we need to have a broader conversation about access to what and how much and how much does that cost? So again, we are sort of behind in this reform conversation on higher education and I think that we're looking to sort of the numeric foundation push folks in the direction of starting to ask those questions. Great, thank you. Gina, the things that come to mind for me there in addition again, you could ignore my questions and respond to anything else someone else has said. I mean, James had a great question about measuring results which I think might be an interesting one for you to talk of. The other thing for me is Bell's grand bargain scenarios here and how likely or where the best mix of revenues versus some spending cuts from a generational standpoint or investments in terms of early childhood. So anything in that area that you'd like to respond to? Well, that's a broad set of opportunities and I'm not gonna take them the rest of the time. My grand bargain actually goes beyond the ones that are talked about. I don't think deficit reduction by itself or deficit reduction packages ever really completely solved the problem. We did a lot of it, 1990, 93 so on and so forth had a lot of good luck, bad luck because the stock market gave us a false sense of how much money we were getting in revenues. The problem with if you do deficit reduction after deficit reduction but you never solve the long-term problem you make more promises you can meet is you're always boxed in the long-term is always out of balance. And in some sense it's like a business that constantly signs contracts for the future. It sends, you're a Microsoft and you think you're gonna succeed in the future but you take that success and you take all the revenue growth you're projecting and you spend it all, you sign a contract today for the plan you're gonna buy 50 years or 100 years from now or equipment 100 years from now. It just doesn't work. So part of the reform that I am after is restoring discretion to the budget which to me is the really big grand bargain is that from the left you have to be willing to say I'm gonna cut back on some of the automatic growth in the programs. And we're not gonna talk about healthcare but it means like putting all the healthcare programs in budgets whether the left wins or the right wins is in a budget. And from the right it means you pay your bills as you go along. You actually collect enough taxes to pay your bills. You don't sort of just shift that off to the future. If you restore that discretion then that creates a process where you can over time make these types of decisions that Margaret so well articulated about how you do the reform along with the resources. We don't know every reform to do today we can start enacting them. And also I think shifting money from more and more money particularly for providing more and more years of retirement for instance which I think decreases the labor force provides a negative at least macro GDP return and putting into things on the investment education side. Even if we still debate whether it's a 1% or a 5% or a 10% return we wanna go from the best return. The investment side at least we think is gonna have some positive return. The other one we might want for some equity reasons I do a better job of helping the bottom half of the elderly population but we don't necessarily wanna do that in a way that discourages work and investment in saving as we currently do now. So that's how you shift the resources to get that positive return. Then you go through these process debates which we will continue to have about how do we do better performance measurement. We've been debating this for a long time with other terminology. I think we only do performance measurement actually for the things we're thinking of adding on like in the education side but things like healthcare and retirement policy and 95% of the budget we don't do any of it. I have this huge debate with the IRS people all the time. They do no performance measure over hundreds of billions of dollars of programs they have none. They don't even provide data on some of it. So you create a process to do this performance measurement so we try to seek the higher returns and I could go through some of my selective items. I'm in line with I think everybody here I really wanna put a lot more in early childhood education. I think there's a lot of evidence now that investment early pays off but you still have to debate of how to do it. Sure and debating with the IRS about performance measures is setting somebody up for a punchline here in a second but we'll let it go. Secretary Spellings, I wanted to ask as I think about the federal government what Congress and others can learn from states, localities, businesses, folks outside the Beltway from some of your travels. You mentioned some of your interaction with the business round table or some business leaders as it related to fixing the debt and fiscal policy and what are folks perhaps doing on the outside? What can business and non-federal actors perhaps learn that would be helpful or equally what are governors doing in the education realm that is interesting with higher ed the task force you served on that perhaps reformers in government in the education side might glean from governor's efforts to get results out of revenues plus reform. Yeah so I think we're all in violent agreement about sort of the recipe and I think we have not talked enough about yes we've talked about more investments but we haven't talked enough about who's the investor and what is the right calibration of the state versus the federal role in any of these things. I was pleased to hear President Obama commend Republican governors Mary Fallon and I guess George also in his State of the Union as Texas obviously has been a big investor in these things we've had three and four year old programs in our K-12 system since the mid-80s that smart states who are gonna get results know that they have to invest early in pre-K and so I do think there's a set of facts around that that we can all agree on. What I think we have not tackled is who's the payer and what are the results. Right now we have an education investment system that basically we invest, we're a one-third investor in higher education from the federal government and about a 10% investor, Maso Manos, in K-12 and our strategy in higher ed, as has been said is sort of put the money out and hope for the best, get as much of it as you can and I wish that I had known about your interest everyone in this room when I appointed six years ago something called the Commission on the Future of Higher Education which has come to be known the Spellings Commission which frankly Secretary Duncan has done a lot of work on around transparency and performance and completion as Bell said and so I think we need to back up into a first order of magnitude discussion around whose job is this as we talk to governors and business leaders who are paying the freight in big levels obviously in state government around these investments in early childhood and K-12 education obviously those are primarily locally funded systems not with standing head start so I think we haven't had that conversation yet I would say the other thing that I would just observe is we need to sell some different soap and we've tried talking to each other about the cabbage that will eat Cincinnati in entitlements and this sort of deal but I think we need to talk about new ways of doing things that more smartly purpose resources around higher levels of performance James was kind enough to mention the technology work Secretary Duncan and Chairman Genekowski at the FCC who's now departed asked a number of us myself Lee Bollinger from Columbia Jim Coulter from TPG and Jim Steyer from Common Sense Media to work on an education technology commission that would think about how we can build the infrastructure in our schools by repurposing and figuring out a better way to deploy the E-rate so that we can gain these efficiencies my friend Jim Coulter who leads TPG says it's as if we're passing out sweaters in technology now instead of building a heating system in our schools that will allow the scalability and technology that can be and has been so powerful in every other area so I think we need to reframe what it is that we expect our citizens to buy and pay for and what they can expect in return and I think we're doing a poor job of saying who oughta pay for it, what's the righteous role of the federal government and state government you know what are you gonna buy, what can you expect from it and how are we gonna know that you're getting some results around that obviously no child left behind things in the Spellings Commission in my view went a long way to talk about those evidence processes how do we know it's working but this in my view is the new way to frame this new intergenerational contract that is also potentially a new contract of how we see states and the federal government interacting I would say my own view on the federal investment or federal role in these things and I think we have drifted significantly from this is that our goal, our mission at the federal level be it in K-12 or post-secondary has been around the neediest among us and to level the playing field so what do you wanna call it no child left behind or pre-K universal although these sorts of things are about people who because of various situations, circumstances and inequities among the states have looked to the federal government to respond those populations obviously have grown over time and we're drifting from that it's now local control everybody have your own accountability system do your thing, we'll get the joke and under fund these things and say the achievement of poor and minority kids matters a whole lot less now because we know you have less money to work for so it's this insidious little relationship between many in the education establishment who prefer the status quo to accountability and many in the fiscal hawk federalist camp who prefer no federal role versus the civil rights community and the business community often on things like the common core. Very interesting, thank you Secretary Spellings. Bill I wanted to underscore the point about the time we have now so we can phase in some sort of changes now but not having the luxury of time to make reforms in the fiscal area 10, 20 years from now time will not be on our side but the importance of making any changes and phasing them in and I loved some of your scenarios in terms of what a grand bargain could or would look like I'd be interested in any optimism hopefully on any of that in that space. It's really hard to be optimistic about the politics of this if Alice Rivlin were here, she would be because she always is if Meyer were here, she probably would be but I have a hard time thinking it's gonna happen anytime soon but we'll see. I think the way to maybe go forward is with small deals before you try to do big deals. You know the usual language is about confidence building by doing something small in order to work towards something big and I was at a breakfast with Paul Ryan and I said to him, why in the world wouldn't you all accept the president's proposal for the change CPI? And I didn't really get an answer. So, I just don't know where all of this is going. If I can make a couple of other comments I wanna echo what James said about deficit reduction is not an end in itself and I think we have to keep reminding ourselves of that. The reason we care about deficit reduction, the main reason is because if we let the budget get out of control too much it's gonna inhibit economic growth and that means less prosperity in the future. And so I have been a big fiscal hawk. I have done a fiscal wake up tour for up until recently for four or five years been to something like 70 cities in this country talking about the need to reduce deficits and debt. But the reason you wanna do that is because you want more economic growth. You want us to get control of our own fiscal house. You want us not to be borrowing so much from China. You want us to have some money in the collective bank if you will in case there's some kind of emergency we need to react to. And you wanna not be passing all these bills onto the next generation. But that said, as James emphasized, I just wanna agree with him if you're not making investments in the future, if you're not educating the public, if you're not doing what you need to do on infrastructure and so forth that's not gonna be pro-growth either. So let's think about having a growth agenda which has a balanced portfolio between investing in people and infrastructure and science and reducing the deficits. So it shouldn't be just one or the other. The other thing I wanna really reinforce is what several people have said about Jason in particular, I think about the need to get more value for the dollar we spend. We've had that debate in healthcare. We've had it in a thoughtful way. I think there's an increasing amount of education, public education and public understanding that in the United States compared to some other advanced countries, we don't get very good value for our health dollars spent for all kinds of reasons I won't go into. And we haven't had enough conversation about getting value for the dollar spent on education especially in the higher education arena. So just wanna reinforce that again. And I think one of the solutions is online learning and I'm glad you all are working on that. I'm very, very interested in that myself. And I was glad to hear that in this creative thinking that the White House and the administration are doing that this is an arena I gather where you might have a new social impact bond effort. And it's a great idea. I'm on the board of MDRC where we're actually overseeing one of the social impact bond endeavors that's about reducing recidivism in prison or in jails. Just to build on the thought looking to you James in terms of creative ideas. Once we get past the immigration debate do we see any other creative ideas in the leadership realm from the administration in either fiscal reform? Is chain CPI just the tip of the iceberg in terms of entitlement reform? Or are there education areas that we might see as Bell was alluded to some creative reforms going forward? Or frankly ignore that question just talk about whatever you want to and respond to anybody else. Well, I don't have new policy to announce today. I was baiting you a little bit on it. I know. You know, we are encouraged by the progress that we're making on immigration reform. It looks like we're gonna have a Senate bill this week so knock on wood on that. You know, we do have a very busy reform agenda in all of these areas. So preschool is an area where you could see potential investments, not only in the actual preschool proposal but we have a couple of other early childhood initiatives there is a proposal to strengthen the quality of childcare and build connections between childcare and Head Start programs to make it more, make Head Start programs work better for working adults. That's our early Head Start and childcare partnerships proposal. We've also our big believers in the nurse home visiting program, which has one of the strongest evidence bases of any social intervention and are seeking ways to try and expand funding for those programs. You know, I think ultimately that's a question that's gonna get caught up in the budget conversations, which will take the city over again soon enough. You know, we have a variety of high school proposals. High school is an area where we need to think more carefully about how our young people are using that time and how they can use that time better. Some of the high schools where we see the best results are high schools where the learning is contextual so young people have an understanding of why they're using the knowledge, they're applying the knowledge, and you can get that through partnerships with employers, through opportunities to earn college credit while you're still in high school. So that's something that we've proposed. It's a budget proposal. There's also reforms to the career and technical education program that are currently part of the ESEA debate. You know, that's a- Is that Perkins? Yeah, the Perkins program. Yeah, and that's an area where historically there has been some bipartisan support so you could see some reforms moving forward in that area as well. I appreciate your indulging my questions and also having a chance to respond to each other. And now let's have Lindsay with the microphone and opportunity for any questions that you have for our panelists from the audience. Yes, the gentleman in the front here. And if you would just ask a single question, maybe identify yourself as we go around. Start with this one. Question for anyone. You talked about we need a new intergenerational contract. But I haven't seen a decent debate about that yet. I've seen a lot of scare tactics, especially for the elderly, about how Obamacare has kind of got their Medicare benefits, about how the Ryan plan would do even worse. There isn't a conversation across the generations right now that I'm aware of. It seems based on the politics of fear. I'm afraid that's right. And maybe if you write an article about it, it would help. I have written several articles about it myself. I've certainly heard the discussion amongst, you know, thought leaders, but I don't think it's reached the public very well. I think there is a tendency for all of us to think about what we are right now and forget that we were once children or if you're younger person to realize that at some point, I'm afraid you would look like me. So it is all one life, one life cycle. I think part of it is that when it gets to the politics, just as Bell says, you played to the politics of fear. So if you go back to the last campaign, both candidates actually had proposals to cut back on Medicare cost. They did it in different ways and I'm not saying whether the proposals are complete or not. And then the other candidates both accused them of gutting Medicare and taking something away from the elderly. Now, one tried to do it through price, limits on prices, the other tried to do it through premium support. But either way, they were gonna cut back on the growth rate of Medicare, which almost universally people recognize as something has to take place, which actually I think even the elderly recognize that the growth rate's not sustainable. So part of the issue I think is, how do we have a decent conversation on it? We're gonna have Medicare and it's gonna grow in the future, but how can we have a conversation starting to find what's sort of reasonable and not reasonable in that realm without each candidate immediately attacking them? You know, my play on it, which relates to this fiscal democracy index, is when you get to a world where everything is pre-committed, you've got in this box where to do anything new or to do anything new in the budget and education, you have to re-nig on a promise to somebody. And that really plays to this politics of fear because the other candidate can say, aha, there's this promise made to somebody either for low taxes or this growth rate in healthcare that's unsustainable. That's a promise and anybody who says, I'm gonna cut back on that promise gets attacked by the party. And I think actually to be fair to both political parties, I think they're right. If you lead, you lose. If you tell the middle class that maybe some of the promise is made to it, the middle class big everybody, but the top 1% on whom we're willing to increase taxes or the bottom 1% of welfare recipients from whom we're willing to cut benefits, you tell them that in fact, that what we've got is unsustainable. Right now we have a political dynamic that if you lead, you lose. And that's a major issue we have to deal with. I don't think we ever get there until we restore discretion to the budget. That's why I think the efforts like Fix the Debt that have attempted to do that with Republican and Democrat stalwarts working on it and trying to build that cover, political cover for people who will be courageous leaders on the matter. Yeah, there's some material outside on that to follow up on. If I could just add a footnote here. First of all, obviously children don't vote and even young people who are eligible to vote don't vote in nearly the proportions that the elderly do. That's a problem for us politically. Secondly, on the sort of arithmetic of this, the current estimates are that the value, the lifetime value all, you know, appropriately discounted, et cetera, and net of costs of a college education, assuming you get the degree is around a million dollars. And if you think about Gene's numbers on how much it costs to provide Social Security and Medicare right now to an elderly person, it's not a lot more than that, for a couple, it's about a million now. Yeah. So, I mean, these are just rough numbers, but the point is that if we made the right investments now in the younger generation, we wouldn't need as much Social Security or Medicare, especially Social Security down the road. People would be more self-sufficient. They would be more affluent. And so when people think about this, they think, oh, well, you know, if you're 25 now, you think you're gonna need the same Social Security benefits that your parents had, but you may not, unless we're gonna make every generation much richer in retirement than the previous one. Very interesting, I appreciate it. Any further questions here? Gentlemen. I'm Ben Litwin. I'm a rising junior at Gaysburg College and currently interning at the National Low-Income Housing Coalition. And when I was, I was just in high school, like two years ago, and I was in like the top of my class and there were some other people in my grade who were reading at like a third, fourth grade reading level, but my public school was spending three or four times what they were spending on those kids as they were on me. So how can you change, or how can we change our program so that we're spending more money to make it so that people who are graduating high school can read at a high school graduates level instead of spending all of the money on people like me who were taking college classes in high school? Well, I'll start with that. One is we need to start investing earlier, as I think we've all said, and that is that if you try to teach someone to read in the 11th grade, it's gonna be expensive and unlikely. So this is why pre-K and early childhood and early grade programs obviously are so important so that we don't get to that juncture. Secondly, I would say that we, the dirty little secret in education, and this is again our vaunted local control, is that if you have, our resource allocations are all messed up. If you have a PhD and loads of experience, you're teaching AP at Langley High School. And if you're brand new and struggling and on the way out the door and on probation and on your last favor from your superintendent, you're at the most challenged educational setting. And then we're surprised when we have the results that we do. And that is why, my little no child left behind commercial again, transparency and data and assessment and information is so powerful and matters so much. And that is why those who like resources allocated the way they are on both sides of the aisle want it to go away as soon as possible. And so, again, one of the foundational things about reforming higher ed or instilling pre-K that works or data from the IRS is we need information without that kind of baseline. We can't go to work on the policy front. And it's another dimension to these discussions and these debates because the status quo doesn't want us to have information about any of this stuff. They like it just fine as it is. In my view, the largest single success of no child left behind and Secretary Spellings deserves a lot of credit for this has to do with the initiative to try to measure progress for every child. Some states are doing it a lot and still not doing it. The complication in my view came from when it got translated to just the simple message of how many people pass a certain standard, which is like at about a 30% how on say reading or something like that. If your measure of success as a school is what percent of your students are above the 30th percentile, it puts enormous incentives to worry about the people between the 20th and the 30th, raising them to the 30th. It actually reduces incentives for worrying about anybody above the 30th percentile. And for the people down to say the 5, 10, 15th percentile, they try to reclassify them so they don't get into the count. And so the trick, and I think we've got a long way to go in the data, is we really want to be measuring women with the early childhood stuff. There's the same debate. We really want to be measuring progress for every child. We want to measure your success because if we neglect you and you have a chance to be the next Einstein, we don't want to neglect you along the way to help at first the bottom. We want to measure success at every one of these levels. That's hard to do. And that's to me the next major step. Some people are about it, but not a lot of states and localities. Secretary Spelling speaks to this more than I can. But measuring this progress for every child and then using that to judge schools and not whether how many, what percent passed the 30th percentile, if you're in Anacostia over here, and you get 20, 30% of kids above that level, and it used to be 20, you're a great success story, but you're not measuring that. Let me, Secretary Spelling, sorry, before you do it, the White House is calling James, and he's got last word, he's got one minute before he walks out the door. Let me give him the last word, and then if you would, thank you. I apologize, duty calls, and I got to get back to the salt line. But I agree with what a lot of words have been said on this question of strengthening schools. I can tell you the President's strategy has always been around first, trying to do a great job of defining what it is that students need to know and measuring that, and that is partly is addressing some of the problems that Gene identified. Another part of the problems has been that sometimes states' expectations have not been high enough for what students need to learn, so it's been part of a movement led by states to define high expectations for every student under the name, career, a college and career ready standards. A second key part of the strategy has been teachers, and there's nothing more important within a school to how much students learn than the quality of a teacher, and so there's been a major point of emphasis of his is to try and make sure that we're doing the best thing that we can to train excellent teachers to recruit our best and brightest into the classroom and to help them stay there and support them while they're there. A third is the use of data, and that again echoes the point to Secretary Spellings and Gene we're making about trying to get the best possible information so that we can find out who is struggling and why. And lastly is focusing on those schools and classrooms where we see that students aren't learning and being very aggressive about trying to turn around those situations, so that's what he's attempting. So again, I'm sorry I have to leave early, I've learned a lot from the discussion, it was really an honor sharing the panel with you. Thanks. I'm so sorry to interrupt there. As quickly as a footnote to the comments that have been made, the reason that we didn't have a value added measurement system in the first place was because so few states had annual measurement systems in place and we could not do a system like that, there were about 10 or so including the great lone star state that had that capability and only of late have states come along to that point of view. So we're now in a place that we can do that and why we need a reauthorization but it's not because there was any love of targeting an absolute standard, it's because we didn't have the infrastructure in place to think about anything like that. Thank you. And that's what we call local control. Yeah, exactly. So we have a final question or two, a lady here. Hi, my name is Jessica Compton, I'm currently a graduate student at the University of Michigan and right now at the Annie Casey Foundation. Oh, great, how's history? Right. So we, as much as we do need more information, we currently have a lot of information and most people don't see in the long term, we are talking right now a lot about what will happen in the long term if we invest today. It seems as though the campaign of fear works very well with politicians because we can immediately in the short term see that fear, that money is going to be taken away from us or moved away from us immediately. So what's a salient message today for the middle class to get them to think about what investment today means in the long run? How do we push people who aren't like us in this room, who know so much to really move? Is it at the national level? Is it at the state level? Is it, you know, somehow supporting more grassroots? How do we get the middle class to really think ahead? I mean, I'm sorry. I think, you know, we've come to presentations like this when we look at our graphs and we're so horrified and we see these, but you know, oh my gosh, entitlements are giant, education is nothing. But we haven't talked about this in human terms that if we do nothing, it's not just about the money. It's the fact that we didn't have kids who had that million dollar difference, who had that college education that they could contribute to the economy and help grow the economy and contribute to their own well-being over time. So we never put a face on it and we never described the consequences for a lack of action in human terms. That's my view. I would add that there is a need for public education and we certainly saw when we did the fiscal wake-up tour that it made a difference. At least we think it did. We got tremendous, we had editorials in all the local newspapers and all the cities we went to and we met with the business community and we went to universities and we met with non-profits and advocates and so forth. And people would come up to us all the time and say thank you so much for telling us this story about how bad our fiscal situation is looking forward. Now who should, on the other hand, it was an uphill battle for us because who were we? We were just, there was someone from the Heritage Foundation, someone from Brookings, there was always David Walker who was then the Comptroller General of GAO and there was Bob Bixby from the Concord Coalition, was the typical panel. And we kept saying to ourselves, well, we're getting the word out to some extent through the media, particularly the local media and we did a certain amount with the national media as well but it should really be an issue of leaders and you said this earlier, I think, Margaret. We need people to use the bully pulpit in the way that if I may say so, I think Bill Clinton was very effective at doing and we don't have enough elected leaders right now who are leading. Leading comes from the same Latin word as educating and to lead is to educate. If you don't educate, you're not gonna have any followers so that's a terribly philosophical answer, I realize so but I don't know what else to say about it. Let's go ahead and we've, you know, the Committee on Responsible Federal Budget here, some of our can kicks back and thinking about youth who are committed to this conversation and dialogue. There's a number of folks here in the back I could put you in touch with who are interested in how the middle class, particularly young people, are taking a leadership role in this space. Is there a final question for our panel from anyone? If not, will you please join me in thanking our distinguished guests and speakers today? I so appreciated those insights. Thank you for taking the time to share them with us in our group. I appreciate it.