>> oh, god no. no, no, no. >> larry: barbra streisand, the book is "my passion for design" available everywhere books are sold. >> oh, thank you so much. >> larry: tomorrow night will be the last night of "larry king live." there will be, by the way, for two weeks they're going to show highlight shows right through new year's eve, and then we'll be doing specials and you'll be hearing lots from us, but tomorrow night so you are our next-to-last. >> oh, lovely. thank you. you've probably seen the chilling video. a man stands before the school board and opens fire at close range. thank goodness no school board members were killed. not even hit. the gunman eventually shot himself. you probably have not seen the raw video of what happened. we've done our best to piece together the footage. we should warn you, this video

is extremely disturbing. >> leave. you may leave. you may leave. women can leave. six men stay. everyone else leaves. >> he's talking. john, go ahead. >> no. no, ginger. ginger, no. ginger. yourself or kill us or whatever, at least let us know what's going on because i'll be very honest with you, i scare, i don't know who your wife is or what she did. they don't sign the papers. i'm the one who signs them. will you let them go?

i mean, you are obviously upset at me. so why are they here? >> they're part of it. >> part of what? >> the scandal. >> sir, i don't know what you were in -- >> this is to stop the taxes, okay? you said we don't need no taxes -- >> no -- >> plenty of money. as soon as you gutted the school system, then you turned around and said, oh, now we need this half cent sales tax again. >> i said we needed sales tax from the very beginning.

>> unbelievable. chilling. what i can't believe is how calm all these people were. they sat there and tried to reason with this person who, you know, claims his wife was fired and that's why he came. the most incredible moment, one of them, this woman, one of the board members, ginger littleton, came up behind that man with her purse and tried to knock the gun out of his hand. talk about -- that took guts. i mean, she's my hero. that's -- the supervisor, you know, he tried to take complete control of meeting and get this fellow to communicate with him and release the others. to have that kind of state of mind in that moment is amazing. >> clay duke, who's the shooter, was an ex-convict. been convicted in 2000 of aggravated shooting into a vehicle after he threatened to kill a former girlfriend. clearly a guy who had no business having a gun under any circumstances.

a convicted felon. >> the gun shows are particularly a big problem. people come in there and buy guns. they can get past the background checks. which ought to -- which ought to be required in every single case. i think something like 40% of sales at gun shows are not -- >> here's what i'd like to see. all the people lining up on the republican side saying, i want to be president, from sarah palin to mitt romney, on down the line, let them stand up tomorrow and tell us where they stand on the assault weapons ban, letting atf do background check, 72 hour wait before you buy a handgun. if they will not after this video support that, i say shame on every one of those guys because they're the ones who have stood in the way of rational policy and i for one -- and i think most of the american people are fed up with the gamesmanship they breed every day. let's find out -- >> rename the conversation and stop saying gun control because that sounds like, oh, we're going to take your guns away. let's talk about how we're going to become a more civil society and keep guns out of the hands of people who should not happen,

recognizing that sane responsible americans ought to be able to own guns. joining us now is kevin williamson, the deputy managing eld tore of the national review. and he's against gun control and mayor jeffrey jones of patterson, new jersey, which has a serious crime problem. he's for more gun control. mayor, we have lots of laws on the books. why aren't they enough to control, keep guns out of the hands of the wrong people? >> well, i think, in part, the laws on the books are about folks who are abiding by the law. we're talking about an element of folks who could care less. and so there has to be a much more aggressive approach, particularly when millions of the guns are coming to my city seem to be coming from other states. >> why do we have to have this hard position and not -- not see that there are certain sort of compromise positions we can take

that makes sense? i mean, most normal people out there -- i want to have my own guns in my house but i don't want -- >> you're not talk about any sort of especially dangerous gun. if you want to deal with the most dangerous, hunting rifles. those are by farther most powerful weapons we have. those are by far the most powerful guns on the street. if pope jon paul had been shot with -- >> what's your point? >> the point is, we talk about, well, we're going to do something about assault weapons. whereas your average sort of hunting rifle is ten times more powerful. people should start using elmer fudd's deer rifle in crimes, they are actually much more dangerous than assault weapons. >> take that off the table for a minute -- >> -- and let them know i'm either gang neutral or i don't care if you shoot me in the back, whatever the case is. i do understand and appreciate the benefit of anyone if this constitution affords them to bear arms. i get that part.

show me one weapon that doesn't kill. and tell me about the individual who holds the weapon. they're on the streets. the people who have them don't have a clue what they're doing. i know that, yeah, social conditions are part of that. but the bottom line is there are too many on my streets. >> let me ask -- >> what would be the solution for you though? >> there are a number of solutions. get them off my streets. since i can't because they're coming in through ways -- >> so what, eliminate guns from the whole country? >> i'm not -- >> -- just give away gun because my police officers need them. >> if you're saying you don't want guns coming into your city from other places, then we have to go to other places and eliminate guns? >> i think what the mayor's saying is we need to do is control the way they're sold in those few centers where we know they're being sold to criminals. we know that. >> obviously. what's wrong with that? >> don't say obvious because obviously what's been opposed by the nra -- they've used their political strength -- they're

entitled to do that, of course -- to prevent the atf from using trace data and transfer that data to local police departments -- >> that's a big -- >> how can you be opposed to using the trace data to find out where the guns are coming from? >> i think the argument there mostly is privacy concerns. american's second amendment rights. they do believe at some points they'll be seized. i don't believe that's an entirely irrational or paranoid belief. >> i think what you hear from the mayor is a desperate cry for solutions. what you hear from the nra is the theological belief in the right to own guns even against the evidence of a mayor who's trying to keep his streets safe and you have the theology on the other side that is sort of unbending. then you see incidents like this -- >> -- guns are the root problem but the truth is we have in the united states much higher rate of crimes involving stabbings, driving over each other with cars.

the canadians have twice as many guns per capita as we do. your gun's not really the fundamental issue. in the last shooting i covered in philadelphia was a guy who shot a cop, had a gun, shouldn't have had it. guy had 19 felony convictions. there's no reason this guy should have been walking around on the street. what everyone wants to talk about, well, why don't we have stricter gun control laws? why don't we have stricter felon control laws? >> -- and the crime rate was down so -- well, you can't draw a cause and effect line from gun ownership -- >> you started a question before about what really is the problem. there should be an avenue when a community such as mine, urban, 52 different ethnic groups, that once we've exhausted all of what we believe to be reasonable actions to address this proliferation of guns in our schools, we should be able to

call someone. who that someone is, be it the state a g's office, someone should be able to come in and walk with us and work with us. because of the resources. because of the manpower. to help us figure it out. that open dialogue does not exist that i know of. that's where the cry comes from. we're an urban center that is strapped. $76 million in debt. i didn't create it. but i have to deal with it. with that, this other fear that i may lose my house, i may lose my life, and nobody can help me. that is serious. >> that is serious. kevin williamson, mayor jeff jones, thank you for being with us. >> coming up, the white house says it has finally won the war over the tax proposal. the congressman leading the vote against it says not so fast. he's our guest. stay with us.

is president obama's tax cut compromise going to pass the house?

>> tonight's headliner, democratic congressman peter defazio of oregon still begs to differ. welcome back. >> yeah, i don't think it's quite a done deal yet. last week we had a nearly unanimous vote in opposition of the package. there are no significant changes in the senate. we're tussling with our leadership now over what amendments we might be allowed to offer. i think some have a prospect of actually winning. >> most of the focus is on the estate tax. is that where you're looking to offer amendments? >> i'd like to do more. the estate tax is nearly a consensus. there's a growing concern over the social security provisions. we're going to basically deprive social security of $120 billion of income. now it's going to become another program that needs to get allocations by borrowing by the federal government. bad idea. >> you've been kind of a stick

in the mud on a lot of issues that the president wanted. some people are wondering whether you're really a republican. >> if we had done my version of the stimulus, enough investment to do a transportation plan and rebuild the crumbling bridges in this country, i don't think we'd be in the minority today. we gave people tax cuts they didn't know about that didn't put anybody back to work they were so small. and we didn't begin to rebuild our infrastructure. here we are in the minority. >> do you have enough folks standing with you to create a threat this bill will not pass? >> that's a good question. the white house is putting on tremendous pressure, making phone calls.

the president's making phone calls. saying this is the end of his presidency if he doesn't get this bad deal. i think this is potentially the end of his possibility of being re-elected. it's a trap on social security. and on our tax system. a tax on huge cuts to programs we care about. this adds half a trillion bucks to the deficit next year. next year, the new republicans come in, whoa, we got to cut back on everything because we have a $1 trillion obama deficit. they won't be talking about their role in creating that. >> i'd never seen anybody as effective at lobbying for george bush's economic policies as president obama. have you gone to the white house to say, you're now creating a $2 trillion deficit? what are you sacrificing? because that really is the policy choice they're making? >> i don't think they're thinking that far ahead. they're scared to death middle class tax cuts are happening. we can take care of it anytime next year retroactively. but they're rushing this through

as though armageddon happens. the only armageddon is for unemployed people. that shouldn't have even be on the table. it should be a no-brainer we will extend unemployment benefits and i can find a way to pay for it if they insist on that. >> you said the president has called people in the house and said, if this doesn't get through, it's the end of my presidency? who did he say that to? >> i won't name the members, you know, because they said this to me -- i mean, not for public disclosure, but i've talked to at least one member who had that call. >> you agree with that? >> i think it's the opposite. if this was effective investment to put people back to work different than the bush tax cuts, different than the trickledown, different than larry summers. if something is different from

that and it was really putting people back to work, i'd be the person standing there fighting with them. i believe people are going to say, where are all the jobs? what happened? a year from today, the republicans are going to dare him to try to replace that money in social security. to let the tax go back up. they say, you're going to raise the tax on every working american. by the way, we can't afford to subsidize social security any more. this moves up the depletion date for social security by 15 years. it doubles the problem social security has. instead of being depleted in 2040 and playing 75% of benefits, social security will be depleted in 2023 and only be able to pay 50% of benefits. that's one felt stroke in this bill. brilliant on the part of the republicans. just abyss male stupid on the part of white house advisers. >> republicans were the ones who

got elected, came back into the majority, because they were screaming about the deficit. now they're adding $1 trillion to it at least. have they been confronted with this reality that they for the sake of the tax cut for the rich are adding human sums to the deficit? what did they say when you pushed them on that issue? >> i spoke just after the conservative and honest republican from arizona, he raised that exact point. he would get to balance in a different way, but he raised the cost of this package, as did pence, a senior republican leader, so i think -- i had a conversation after with a couple republicans who said there's growing concern in our caucus over this deal. because the house republicans were cut out as much as the house democrats. this was a deal between one republican senator and the vice president of the united states. and it's a bad deal. i think more and more people are coming to that realization. >> i got to say there's -- to put the best face on it least schizophrenia and the republican argument. they got elected on deficit crisis concern. they come out and support with the president this huge tax cut we can't afford.

i just don't see how you square that circle. i hope you keep pounding away at that grotesque inconsistency. >> oh, absolutely, i will. in fact, that's why i think putting everything forward into next year except for the unemployment benefits would be a way to kind of call that question on him and point at hypocrisy if they don't figure out a way to pay for borrowing another $450 billion. >> thank you, congressman, look forward to having you back to report on how things go in the next couple of days. still ahead, president obama met with 20 top business leaders in the white house today. we'll speak to one of those ceos to find out if fences were mended or bridges were burned.

the president's tax compromise, or as i like to call it, his tax capitulation, passed the senate today by a vote of 81-19. now it moves on to the house where opposition from both the left and right could delay or even derail that bill. >> meanwhile, senators attention

turned to two critical issue, ratification of the new start treaty and a new trillion dollar plus spending bill. conservative senator jim demint has asked both bills be read aloud on the floor. that's thousands of pages read for dozens of hours. while any senate business is frozen. most boring story time ever. >> even c-span watchers aren't going to keep their tvs on for that. joining us in the arena to help us make sense of this nonsense, free market advocate tim phillips. and liberal policy expert and strategist erica payne. let me begin with you. thanks for coming back. everybody begins, cbo, republican, that over the next two years this will add close to $1 trillion to the deficit. where are you going to cut to square the circle? you can't be both for the trillion dollar tax cut without cutting an equal a. spending if you're going to be true to your principles, as i understand. >> i think the new house majority is going to come up with those tax cuts. also, some of the welfare and domestic programs. you can't say after 19 months of 9% plus unemployment now's the time to raise taxes.

it's not. that's the worst stretch of unemployment since world war ii. that's no time to raise taxes on folks. >> i'll concede the tax cuts for people who make less than a certain amount certainly are stimulative. if you're making 50 grand a year and you add a few hundred dollars into your paycheck, you'll go out and spend that money and that has a stimulative effect on commit. when the senate voted a week or so ago they had a choice to vote for tax cuts for everybody except for people who make more than $1 million a year. the republicans voted to stop that extend of the tax cuts because they wanted to hold out for those people who make more than $1 million a year. >> you're giving the same old argument.

class warfare. it just lost in the last election. pelosi had the opportunity to put this tax vote up in the terms you're talking about. she didn't do it. the american people don't agree with that kind of politics. >> if you had a choice between spending $100 and a tax cut for people who are extraordinarily wealthy or using that same $100 as a tax cut for research and development as an immediate write off for capital investment what would you rather do? >> it's a false choice. you can do both. let's talk about economic growth as well. we have a corporate tax rate, 39%. the germans and the french are beating us on that. yet you would oppose that -- >> i guarantee you i wouldn't. i guarantee you i wouldn't -- >> good, we agree on something -- >> -- bring the corporate tax rate lower and take out some of the loopholes which are actually american businesses standing behind the skirts of taxpayers to try to prop up their business. >> let me come at it from another perspective.

there's a very powerful article written by our colleague here in which he mailed the point china is investing in critical sectors in the next ten years. they're outperforming us. they're going to take away our few remaining export sectors very quickly. now, we're not just saying let's tax for the sake of taxing. we're saying tax for the sake of infrastructure investments. we're losing to nations investing more wisely than we are and giving the money to the wealthy who will not invest it doesn't help our growth. everybody seems to agree on that. >> you just hit a great point. you said wisely investing. i don't trust for a moment the government to pick how best to spend $1 trillion over the private sector. with stimulus -- i'm sorry, stimulus is a bad word, no one says it anymore. i'm sorry, i don't. that million bucks didn't do anything. oh, we saved jobs. how can you prove that? that's a joke. that trillion would better be invested in the private sector. you want to pick winners and loser using the government.

i don't think that's the right way to go. >> can we go to the omnibus bill? there's six -- what is it, 6,000 earmarks representing an estimated 8 billion in spending. of course, the republicans are now saying, we're not going to pass this. this is a bill that has to fund the government so they can keep running. so how can republican senators object to a bill that they floated themselves with earmarks? >> two things. one, if they have earmarks, that they secretly negotiate and it looks like they did, they ought to be ashamed and they're hypocrites. whether it's mcconnell or whoever, that's hypocritical in the extreme and we want to call them out on it. they took an earmark ban in the caucus. they need to stick with. so shame on them who have done it and we're going to call them out on it and we are. we're doing it here on national tv. we're also doing it in e-mail communication to our members. it is hypocritical. now, with demint demanding everything be read, i think he

should do that. these guys have had the entire year to get this budget done. eliot, you've run budgets -- they've had the whole year -- i think they should read it one word every minute. good for him. >> this is like the old fashionled filibuster in "mr. smith goes through washington." i want you to sit through it and listen to it. that's the other thing. look, i agree with you about calling out those who, on day one, say, no more earmarks, and then day two, slide them in over the transom. shouldn't be done that way. erica, the hard question, your piece of the democratic party was in a state of elation when obama was elected. the progressive voice would be heard, transformation, the excitement. what happened? suddenly, a continuation of george bush's policies. from afghanistan to tax policy. what is the progressive wing of the democratic party going to do? >> well, one thing that started happening is a group of millionaires started to build

the infrastructure that the right started to build after the barry goldwater election. what happened was a bunch of institutions a bunch of americans haven't heard of -- >> it's so our fault? it's our fault progressives don't like obama anymore -- >> no, i think she's saying -- >> -- one of the things the agenda project is based on is the idea politicians are the least important part of politics. >> i agree with that. >> -- a set of institutions that ultimately turned a country in a direction that we're now dealing with. so liberals started to wake up a few years ago. they started to say, we need to build that set of institutions. i think the wealthy liberals started to build that set of institution, built a set of institutions that are too close to the electoral process rather than to the intellectual idea development process. and so they got their guy in office. and they realized that politicians are the least

important part of politics. and so the smart liberals will return to the work they started nine years ago that they didn't finish and they didn't invest in in the way that they should have. and hopefully they'll start to build, you know, our version of hoover and heritage and all those. >> i would tell you this, the -- when i look at what happened with a lot of economic groups on the free market side, they got too close to the republican party. i think they were burned by that. i can tell you americans for prosperity, we're not going to make that mistake. we're going to call out republicans. i do agree with you on that. we need stronger institutional forces, philosophical, less party related. >> the deficit commission, this is sort of classic washington. the deficit commission just came out and said, here are these things we need to think about doing to get this in control. two weeks later, they're passing a budget and passing a tax cut bill that is going to add to the problem that they just set up a commission to solve. so the fact that these two things --

>> -- deficit commission -- >> -- and it's not three month later. they're sitting on top of each other waiting to go to the senate hearing room, you know what i'm saying? >> thank you for joining us. >> president obama met with 20 top business leaders in the white house today.

american ceos have complained loudly about the president's plan. meanwhile, president obama has his own complaints. he want business leaders to shake loose some of their money and create new jobs. >> they went to the white house today to talk trade, deficit, among other things. motorola ceo greg brown was there. american industry has complained bitterably this president. and, you know, so tell us what you object to. what specific policies do you find objectionable? >> that seems to be what people want to talk about.

let's talk about the areas of disagreement or that there's a winner and a loser. today was about -- and it was a critical meeting. i think we're at a critical time. it was a unification to say, look, we're all in it together. there's no winner or loser or private sector versus public sector. some things are moving in the right direction. let's accelerate it. let's build on it. let's stick together to accelerate the recovery we all want and need. >> we all know we need jobs most of all. so did you all speak about specific measures that we can -- that can be applied to get jobs moving in this country? >> we did. >> and half of motorola jobs are elsewhere in other countries. how do we get some of those jobs back here? >> i think there's a few things. so let's start with free trade. i think there's a misnomer that a bilateral free trade agreement is a proxy for moving jobs off

shore. that's not true. for every job created or every ten jobs created offshore, there's clearly more jobs associated and expanded domestically. so free trade agreements open up markets for u.s. product and services and allow multinational corporations to expand both in-country and internationally. >> the bush tax cuts, you support their extension, i know, is that going to cause motorola to hire an additional single person? >> i think it's hard to point to one specific piece of legislation, eliot, and say, yep, that individual item is going to spark something. i think you have to view it in total context. >> but it's not going -- it's not going to create additional demand, it's not going to create additional demand for your product such that you're going to need to hire additional people at your manufacturing facility facilities. >> generally i agree with you. what i would say is no tax increases continues the economic

recovery which is still embryonic. and allows for continuity. the last thing i want to do is raise taxes now and run the risk of a disruption in the recovery beginning to take place. your point's well taken. >> i certainly agree with you. you look at the other side of the ledger. corporate profits last quarter were the highest in 60 years. corporations are sitting with $1.9 trillion on their books, yet nobody is being hired. that's the conundrum we're dealing with. if you could pick one -- motorola, am i correct, 65% of your sales are from government, right? >> the motorola solutions business, 65 -- that's right, eliot, 65 government, 35% enterprise. >> if because we cut the taxes there's no money left for stimulus, in fact, that might caught cause you to force people to be laid off because you depended on the stimulus

dollars. that's how they're being paid for. >> yeah but i would say this. we talked about this issue of structural unemployment and how we retrain the necessary skills around science, technology, mathematics. are there things that can be done with public/private partnerships? community college, and the like? so we have to make sure that the people in the u.s. have the requisite skills to compete. i think we're in the middle of transition. i think we've gone through industrial expansion, then tech expansion, to your point, a lot of technology deployed and systems used. sometimes it's at the expense of head count or jobs. as we move in that transition, what are the kinds of skill we need and what are the kinds of things we need to do to regain that job expansion and subsequently economic recovery?

that was discussed today. >> i can't agree with you more our job training programs need to be fundamentally restructured. i hate to get too wonky either with you or the audience. there's this little thing called capacity utilization which has always struck me, certainly your perspective perspective, the manufacturing field, is the threshold issue in terms of hiring. as an economy, we're down at about 75%. you need to be in the low 80s before you get hiring back. am i right, greg, until that gets to about 80, we're not going to get real hiring in our economy? >> well, i don't know about the individual metric of 80 for capacity utilization, but you're right, and there's a circularity here that all talks about demand creation. with demand creation or consumer spending, which is, as you know, eliot, 70% of the economy in the u.s. is driven by consumer spending, that's demand. to stimulate demand, there has to be access to credit.

there has to be an investment environment here in the u.s. that's conducive to go spend money for corporations. and its circular and interdependent. >> what is it exactly that you need in order to get off of that $1.2 trillion that businesses are sitting on right now? what can we do to shake that change loose? >> motorola doesn't have that much liquidity but in general i think corporate tax reform. i think make the r & d tax credit. in 1990, 20 years a the u.s. was number one, had the most competitive r & d tax credit. it had some level of predictability. today, we're 19th most competitive in r & d tax credit and it is annually renewed. we have the worst of both worlds. we don't have the competitive r & d tax credit and we don't have the certainty to invest because it's annually renewed. that seems like low hanging fruit to me and is right up the power alley with the kind of things we need to do to move

this needle forward. that's a good example of why i think we should be able to do that sooner rather than later. >> okay, greg brown, thank you so much for joining us. we'll be right back. let me tell you about a very important phone call i made. when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket.

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in our best ideas segment, we've got someone who when it comes to education has had a lot of them. i'm talking about ideas. >> former d.c.'s school chancellor newest idea landed her on the cover of "newsweek" magazine. >> let's start by agreeing america's educational system is broken. explain to us how. >> there is no doubt about it. the evidence is unassailable that we're in the middle of a crisis. last week, results came out about the piza examination which basically shows china is first, the u.s. is not. in fact, we are at the bottom when you look at our kid's math results. and so -- >> compared to -- >> that's right, compared to other developed nations. so we are not going to be competitive in the long run until we fix our public

education system. >> your premise is that big corporations have always had a voice in how policies are created in washington, pharmaceutical, auto manufacturer, on and on, but that students have never had an organized voice and that's what you're trying to do. >> that's right. there has to date been no special organized interest group advocating on behalf of children that has a national presence, that creates some of the balance that's needed because you've got the teachers unions. they're a national organization. they are very, very strong. >> so are teacher union, meaning teachers and students objectives at odds? >> sometimes they are aligned. so for example, teachers unions want more professional development for their members. we think that's great. it benefits kids. we have no problem with that. there are other policies which preyor tiz adult job and job security ahead of what's in the best interest of children. right now in public school districts across the country, we are actually -- we don't allow schools to pay the best teachers more money to keep them in the profession. that's crazy, right?

if you have people who are seeing result, then we should be able to reward that and show them the value of the work that they're doing every day. >> here's the thing, i know law firms that pay all of their members, partners or associates, identical salary based on how many years they've been there regardless of how much they produce. i agree, i would rather see teachers paid based upon some measure of how well they -- >> the bonuses that lawyers get are hugely different, let me -- >> no, no, not in these firms. even there, is pay alone going to be enough? >> pay alone is not going to be enough. i tell you in those law firms they have no problem firing their lowest performer, right? there's no mandate that they have those people in place forever. right now in public education, we have tenure which means teachers essentially after two years have a job for life regardless of performance. you can never build a high quality organization if you

can't manage your talent. >> putting money in the right places is the biggest challenge and you have taken a sort of -- you've copied the corporate culture a little bit in creating a new organization to make sure the dollars are properly allocated. tell us about that. >> student first is the new organization. and what we are trying to do is make sure we're focusing in on kids, first and foremost. if you look right now in public education, we have more than doubled the amount of money that we spend per child in education over the last three decades in america. but our results actually haven't gotten any better. and so -- >> you actually wrote, i think this is important to repeat, that this will be the first generation that is not better educated than the preceding one. >> that's right. the children in school today will be less educated than their parents were. the first time that's happened in american society. >> education has always been a local issue. it is one of the -- for a lot of reasons, historical and political, there has not been a national effort to raise standards.

no child left behind was step one perhaps and race to the top with arne duncan is step two. is that working? does he embrace the principles you laid out just a few minutes ago about the priorities? >> absolutely. >> will it work? is there enough money behind it? how would you change it? >> so there's no doubt that what the president and secretary have been doing is absolutely aligned to what they've been talking about. they've been talking about competition. they've been talk about choice. they've been talking about teacher quality. i think they're taking the right tack and saying more money is the not answer. >> we'll take a quick break.

we're back now with innovative educator michelle rhee. >> if you were called in by a mayor or governor and that person said to you, give me the three things i can wave a wand over the educational system tomorrow morning. what are the three things you would change? assume you were there in d.c. what would you do to that system? >> the three most important things, one, are making sure we have the best educators in our schools and in our classrooms. which means you have to have policies that prioritize kids instead of adult jobs. the second is empowering parents and families with choice. so being in an excellent school

is not a matter of luck, which is what it is now, but more a matter of fact. and the last is that we have to put dollars where they actually have impact on student achievement instead of wasting -- >> can we go through these three? >> sure. >> putting the best educators in the classroom, how do we do it? is it a matter of training, not paying them enough? how do we create better educators in that classroom? >> it's actually pretty simple. we need to be able to first of all differentiate amongst our teachers. not just say everybody's great. because everybody's not great. there are some people who are fabulous. we need to pay them a whole lot more money. recognize and rewarmed the best people. and we need to identify the people who are not cutting it. and we need to quickly improve them or move them. >> in other words, hurt feelings. you tried to do this in washington, d.c. >> and hurt a lot of feelings. >> you tried to get teachers to agree to forfeit tenure in exchange for better pay, better teaching, right?

>> we actually succeeded in that. we signed a contract in washington, d.c. where tenure seniority and lock-step pay are no longer issues. and 80% of the teachers who voted for the contract voted in favor of that. >> how do you differentiate? you talk about differentiating good from not so good? the critical measures are what, numerical, tests? is it subject of evaluation? >> yeah, the number one factor in evaluating the teacher has to be whether or not they're effective at moving student achievement levels forward. and that means that you have to look at standardized test scores. now, that should be the only measure? no. but it should be the majority of what you look at. you also want to look at their classroom practice. so go into their classrooms and see whether they're engaging kids. >> you use tests. you pay the ones who are better more. you fire the ones who are no good. >> that's right.

>> parents and choice. explain that more. is that choice within the public school system? is it a charter school system? is it vouchers? how does this work? >> it's got -- we have to have more of an open market system. right now, we essentially have a government monopoly. i don't think a government monopoly can ever produce a quality product. so right now you have lots of families who are trapped in failing schools. no other options. and the only way we can improve the situation is if we give parent options. i think that should extend obviously to making sure you have a better environment for charter schools to be successful. also thinking about vouchers. >> i want to get back to your organization. you've acknowledged that sometimes compromise is not the route, that this is a fight, and you're known to be feisty. you've acknowledged this say political fight. you -- will you be endorsing candidates? >> we'll absolutely be endorsing candidates. you know, up until now, when people are running for political office, whether it's school board or city council, where do you get your money, where do you know the votes are going to come from? it comes from the special interest groups like the unions. so you're beholden to them and

their agenda. again, there's been no group that says, here's what's best for kids, and we're going to bring you our members as voters and some resources to back your campaign up. >> let's say eliot and i sign up and we send you our check for $64. what do we get? >> a lot of information about the local dynamic in your city and in your community. we will specifically be telling you there's a school board meeting on this issue, we need you to show up and voice your support. we need you to e-mail or call your congressman or your city council member because they're about to vote on an important issue and you need to let them know you're watching them and you're going to hold them accountable for doing the right thing for kids. >> michelle rhee, thank you for a great conversation. >> good luck. >> thanks. >> we'll be right back.

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