[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



                                                   S. Hrg. 102-000 deg.
 
 HEARING ON CAREERS FOR THE 21st CENTURY: THE IMPORTANCE OF EDUCATION 
                AND WORKER TRAINING FOR SMALL BUSINESS

=======================================================================



                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                      WASHINGTON, DC, JUNE 2, 2004

                               __________

                           Serial No. 108-68

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/                                 house




                                 ______


                 U.S. GOVERNMENT PRINTING OFFICE

94-136                 WASHINGTON : 2004
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, 
Washington, DC 20402-0001













                      COMMITTEE ON SMALL BUSINESS

                 DONALD A. MANZULLO, Illinois, Chairman

ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
Chairman                             JUANITA MILLENDER-McDONALD,
SUE KELLY, New York                    California
STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania      FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina           ENI FALEOMAVAEGA, American Samoa
SAM GRAVES, Missouri                 DONNA CHRISTENSEN, Virgin Islands
EDWARD SCHROCK, Virginia             DANNY DAVIS, Illinois
TODD AKIN, Missouri                  GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania           ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire           MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana               BRAD MILLER, North Carolina
STEVE KING, Iowa                     [VACANCY]
THADDEUS McCOTTER, Michigan

                  J. Matthew Szymanski, Chief of Staff
                     Phil Eskeland, Policy Director
                  Michael Day, Minority Staff Director

                                  (ii)

















                            C O N T E N T S

                              ----------                              

                               Witnesses

                                                                   Page
DeRocco, Hon. Emily Stover, Assistant Secretary of Labor, 
  Employment and Training Administration.........................     4
Lewis, Hon. Edward G., Chairman, Board of Directors, National 
  Veterans Business Development Corporation......................     6
Buehlmann, Dr. Beth B., Ph.D., V.P. and Executive Director, U.S. 
  Chamber of Commerce............................................    21
McCarthy, Mr. Brian, Chief Operating Officer, Computer Technology 
  Industry Association...........................................    23
Joyce, Mr. Roger, V.P. of Engineering, National Association of 
  Manufacturing..................................................    25
Volgenau, Dr. Ernst, Chairman and CEO, SRA International.........    28
Coffey, Mr. Matthew B., President and Chief Operating Officer, 
  National Tooling and Machining Association.....................    30
Peers, Mr. Randolph, V.P. for Economic Development, Brooklyn 
  Chamber of Commerce............................................    31
Caslin, Mr. Michael, Executive Director and CEO, National 
  Foundation for Teaching Entrepreneurship.......................    34

                                Appendix

Opening statements:
    Manzullo, Hon. Donald A......................................    52
    Velazquez, Hon. Nydia........................................    54
Prepared statements:
    DeRocco, Hon. Emily Stover, Assistant Secretary of Labor, 
      Employment and Training Administration.....................    56
    Lewis, Hon. Edward G., Chairman, Board of Directors, National 
      Veterans Business Development Corporation..................    67
    Buehlmann, Dr. Beth B., Ph.D., V.P. and Executive Director, 
      U.S. Chamber of Commerce...................................    84
    McCarthy, Mr. Brian, Chief Operating Officer, Computer 
      Technology Industry Association............................    95
    Joyce, Mr. Roger, V.P. of Engineering, National Association 
      of Manufacturing...........................................   107
    Volgenau, Dr. Ernst, Chairman and CEO, SRA International.....   113
    Coffey, Mr. Matthew B., President and Chief Operating 
      Officer, National Tooling and Machining Association........   131
    Peers, Mr. Randolph, V.P. for Economic Development, Brooklyn 
      Chamber of Commerce........................................   146
    Caslin, Mr. Michael, Executive Director and CEO, National 
      Foundation for Teaching Entrepreneurship...................   153

                                 (iii)















 HEARING ON CAREERS FOR THE 21st CENTURY: THE IMPORTANCE OF EDUCATION 
                 AND WORKER TRAINING FOR SMALL BUSINESS

                              ----------                              


                        WEDNESDAY, JUNE 2, 2004

                  House of Representatives,
                                Committee on Small Business
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 2:08 p.m. in Room 
2172, Rayburn House Office Building, Hon. Donald A. Manzullo 
presiding.
    Present: Representatives Manzullo, Velazquez, Bartlett, 
Franks, Beauprez, King, Udall, Sanchez

    Chairman Manzullo. Good afternoon and welcome to this 
hearing of the Committee on Small Business. A special welcome 
to those who have come some distance to participate and to 
attend the hearing.
    Our nation is now in a global economy, and businesses both 
big and small must compete in regional markets within the U.S. 
as well as those in distant corners of the globe. The 
competition for ideas and innovation is as expansive as the 
markets themselves.
    The U.S. economy is still the strongest in the world. Jobs 
and manufacturing are recovering slowly, but the recovery is 
broad based, just what we want.
    Those who come to Washington for assistance in providing 
training, however, must be committed to providing jobs to those 
trained and to providing and retaining jobs in the United 
States.
    However, to maintain this country's competitiveness, we as 
a nation cannot dwell on past successes. Instead, we must 
accept the challenge of the future and build and preserve a 
foundation for continued success.
    To continue this country's competitiveness in world markets 
requires a workforce constantly trained and available in those 
skills needed in an increasingly technology-centered and 
computer-based environment. Equally important to playing a 
leadership role in the world economy is the education and 
foresight of those who manage and direct U.S. businesses. In 
order to foster and sustain both this nation's worldwide 
competitiveness and domestic job growth, requires making life-
long career training and education a national priority.
    My friend and colleague, Congressman Jerry Weller of 
Illinois, has introduced legislation, H.R. 4392, that will 
assist employers and employees to get those technical skills 
necessary to keep this nation's workforce and industries on the 
cutting edge of science and technology. H.R. 4392, the 
``Technology Retraining and Investment Now Act of 2004,'' 
addresses the critical problem of providing a high-tech 
workforce capable of mastering the ever-changing advances in 
the design and manufacture of increasingly sophisticated 
products, especially those connected with computers and 
information technology.
    I strongly support job training and retraining. It is a key 
element in this country's maintaining its competitiveness in 
world markets. Again, we thank you for coming to this hearing.
    I now yield for an opening statement by my good friend and 
colleague, the Ranking Member, Ms. Velazquez of New York.
    [Chairman Manzullo's statement may be found in the 
appendix.]
    Ms. Velazquez. Thank you, Mr. Chairman.
    As our nation experiences a rising tech industry and a 
recovering manufacturing sector, we also see the increased need 
for skilled workers. This growing demand for skilled labor is 
an increasing trend in this country. As our nation struggles to 
sustain an economic recovery, we cannot afford to have a 
shortage of qualified trained workers within some of our most 
prominent industries. Sixty percent of all jobs are classified 
as skilled while only 20 percent are classified as nonskilled.
    Our country's failure to meet the demand for these trained 
workers poses a serious threat to our competitiveness in the 
global market and to our ability to sustain an economic 
recovery. Much of this has to do with the fact that the 
manufacturing sector has been hit hardest by the shortage. A 
recent report stated that more than 80 percent of manufacturers 
claim to have difficulty finding qualified employees and that 
60 percent of manufacturers typically reject 50 percent of all 
applicants because of a lack of skills.
    At a time when technology is causing manufacturing jobs to 
become increasingly skilled, a high premium has been put on 
employee skills. Jobs continue to move overseas, and the Bush 
administration's policies are doing little, if anything, to 
help this nation's manufacturing sector.
    Sadly, the pool of skilled labor is not ready to meet our 
nation's demand, especially within the manufacturing sector. 
Foreign countries are providing the training that unskilled 
employees need, shifting even more American jobs overseas. Our 
nation's small businesses and manufacturers do not have the 
funding to offer these vital training programs.
    In today's hearing, we will examine the eight-week-long 
Republican agenda, Hire Workers Initiative. This week's focus 
is on lifetime learning, and once again, there are no new 
solutions being offered by the Republican leadership aside from 
the personal reemployment accounts, which are nothing more than 
risky schemes. Instead, the Republicans choose to go back to 
legislation that has already passed and already failed, and I 
think that it is too soon for summer reruns.
    The Bush administration's new job training dynamics are not 
conducive to meeting the needs of our nation's industries. 
President Bush proposed commitment to hiring workers does not 
match up with his actions. Despite the fact that our nation has 
lost over 2.8 million jobs in the manufacturing sector since 
the start of 2001, the Bush administration makes cuts to vital 
employment and training programs that benefit this industry.
    President Bush's request for funding for the Manufacturing 
Extension program is more than $66 million less than the 
program's funding level in 2003. The Manufacturing Extension 
program aids small- and medium-sized manufacturers with 
technical and business solutions and has made it possible for 
over 150,000 of our country's small businesses to tap into the 
expertise of knowledgeable manufacturing and business 
specialists all over the United States.
    Another vital program that has been underfunded by the Bush 
administration is the Trade Adjustment Assistance program. This 
program offers retraining to displaced workers. But most of 
these dislocated manufacturing employees receive no help from 
TAA.
    At a time when training programs are crucial for displaced 
employees, President Bush cut funding for the program. These 
come at a time when the number of people benefitting from TAA 
is on the rise, and this funding will not meet the increasing 
demand for the program. Cutting funding for employment and 
training initiatives such as these is not the way to help the 
manufacturing sector sustain an economic recovery while they 
are already experiencing a shortage of skilled workers. These 
cuts also hurt our small businesses which create 75 percent of 
all new jobs and face greater workforce-development barriers 
than their corporate counterparts.
    If President Bush truly cared out about nation's workforce, 
then he would start adequately funding employment and training 
programs that promote skilled employees. The livelihood of our 
nation's small manufacturers and small businesses depends on 
it. Thank you, Mr. Chairman.
    Chairman Manzullo. Thank you.
    [Ranking Member Velazquez's statement may be found in the 
appendix.]
    Our first witness is Emily Stover DeRocco, assistant 
secretary of labor for employment and training. We are going to 
set the clock for about five minutes, but before we do that, if 
you could just take a minute, Secretary DeRocco, to give us an 
idea what your background is.
    Ms. DeRocco. Certainly.
    Chairman Manzullo. And then if you could pull that mike 
closer to you. There you are. A little bit closer. Then as soon 
as you tell us what your background is, after a minute or so, 
then we will start the clock. Is that fair enough?
    Ms. DeRocco. Absolutely.
    Chairman Manzullo. It will be the same for you, Secretary 
Lewis. Please.
    Ms. DeRocco. I was appointed to this position by President 
Bush in June of 2001 and confirmed in August of that year. 
Prior to that, I served for about 10 years as executive 
director of the national organization that represented the 
gubernatorial appointees across the country responsible for the 
full array of employment and training workforce-development 
programs within their states. I had previous appointments in 
both the administrations of Presidents Reagan and Bush I.
    Chairman Manzullo. Okay. Now we will start the clock. Thank 
you.

  STATEMENT OF EMILY STOVER DeROCCO, EMPLOYMENT AND TRAINING 
              ADMINISTRATION, DEPARTMENT OF LABOR

    Ms. DeRocco. Thank you so much, Mr. Chairman and 
Congresswoman and members of the Committee. I am very pleased 
to have the opportunity to testify today to discuss workforce 
issues to maintain the nation's leadership in world markets, 
with a particular emphasis on our manufacturing sector, 
including how we train and retrain our workers so that they are 
competitive in the world economy. I will summarize my written 
testimony quickly.
    In my capacity as assistant secretary of labor for 
employment and training, I am responsible for overseeing the 
nation's public workforce investment system, which provides a 
vast array of employment and training services to prepare 
youth, adults, and workers transitioning between jobs for 
employment in the 21st century. Most of these services are 
available through a network of almost 2,000 comprehensive, one-
stop career centers and another 1,600 affiliate one-stop 
centers network. Through this network system, workers have the 
advantage of access to a broad range of employment and training 
services, including those available through the one stop that 
are provided by our partner programs, some 17 additional 
federal programs.
    Through our programs and some initiatives that I will 
describe in a moment, the Department is building a demand-
driven system to provide America's economic engine, businesses, 
with the highest-quality workers possible and to link the two 
together for their mutual benefit. This relationship allows 
businesses to be more competitive in the global economy and 
allows workers to live more productive and prosperous lives.
    Earlier this year, the administration submitted to the 
Congress a report on manufacturing in America that outlined a 
comprehensive strategy to address the challenges facing our 
manufacturers. Soon, the Department of Labor will be submitting 
its own report highlighting trends in manufacturing employment.
    Several themes emerge from these reports. The first 
concerns the importance of the manufacturing sector, on which 
we can all agree. The United States is the world's leading 
producer of manufactured goods and, standing alone, the U.S. 
manufacturing sector would represent the world's fifth-largest 
economy. Manufacturing remains a powerful engine of economic 
growth in this country and is vital to the technology boom, and 
our manufacturing base generates enormous economic activity in 
other industry sectors.
    A second theme concerns the transformation of the 
manufacturing sector caused by long-term structural forces, 
such as the shift from low-tech manufacturing to advanced 
manufacturing, the greater integration of technology and 
production, and the globalization of production. To help ensure 
solid and sustainable expansion in coming years, we must 
recognize that some current and prospective workers have 
insufficient skills for the higher skilled job openings that do 
exist and will become more numerous in the future.
    When I co-chaired the Department of Commerce Manufacturing 
Roundtable of workforce issues, I heard directly from industry 
executives about skill shortages. One of the most protracted 
problems that employers face is the lack of skilled workers to 
operate their high-tech manufacturing plants. Even during the 
recession, as the Congresswoman cited, 80 percent of 
manufacturers said they had a moderate-to-serious shortage of 
high-quality production applicants, not just of engineers.
    The more pervasive problem is now the need for production 
workers, machinists, and craft workers skilled enough to work 
in the manufacturing jobs of the 21st century, and the 
demographics of the workforce are likely to exacerbate the 
shortage of skilled workers in the coming years. American 
manufacturers could have a difficult time finding workers to 
run tomorrow's factories and offices.
    We recognize that skills and education are now a dominant, 
if not decisive, factor in our ability to compete in the global 
economy. We must have the best-skilled workforce possible to 
maintain America's competitive advantage and for our continued 
economic growth. That is where the Department of Labor has an 
important role to play. Our task is not to cultivate a 
workforce trained for jobs listed in last week's want ads but 
rather to ensure that people are moving through an education 
and training pipeline to be prepared for the new jobs that are 
being created, in many cases by brand-new companies in brand-
new industry sectors.
    We must cultivate skill sets that connect to real-world 
needs and real-world opportunities, and as we strive to be 
competitive in the global economy, we also recognize that some 
industries and workers will be impacted by business decisions 
and competitive pressures, and inevitably some workers will 
need to retool and retrain from the skills no longer required 
by declining industries to skills demanded in emerging sectors 
of the economy. The Department provides a vast array of 
services to assist workers who are transitioning between jobs, 
and these are outlined in detail in my prepared statement.
    The president has asked the Department of Labor to target 
those industries generating the most new jobs where the 
greatest skill shortages exist and focus on the talent base to 
fill those jobs. American manufacturing is among those sectors.
    As we increase our understanding of these workforce 
challenges, we also must improve the responsiveness of the 
publicly funded workforce investment system, and we are 
committed to doing that. First, through the reauthorization of 
the Workforce Investment Act, we have proposed increased 
flexibility and effectiveness of our training programs.
    Second, in his 2005 budget, the president has requested an 
additional $250 million to strengthen the role of community and 
technical colleges in training workers for these jobs.
    Third, personal reemployment accounts would offer 
additional funds for a different type of service delivery 
geared to an individual's needs to reattach to the employment 
market.
    And, finally, in April, President Bush announced his 
proposal to further reform job-training programs to provide 
more dollars for America's workers so they could access better 
training for better jobs.
    Taken together, our current programs and proposed 
initiatives will provide important tools to help address the 
structural changes in the manufacturing industry and will also 
help provide the skilled workforce needed in the manufacturing 
industry of the 21st century. I would be pleased to answer any 
questions you or other Committee members may have after the 
conclusion of my------.
    [Hon. DeRocco's statement may be found in the appendix.]
    Chairman Manzullo. Thank you very much.
    Our next witness is Honorable Edward G. Lewis, chairman of 
the board, National Veterans Business Development Corporation, 
also known as ``The Veterans Corporation.'' Mr. Lewis, we look 
forward to your testimony, but before we start the clock, just 
give us a minute, take a minute, and tell us about your 
background.
    Mr. Lewis. Thank you, Mr. Chairman. I have been on the 
board of directors of the Veterans Corporation since October 
2001, having been appointed by President Bush, and was elected 
as chairman in December. Currently, I founded and run an 
international management and technology consulting company from 
the great State of Colorado. I am also heavily involved in 
teaching graduate and undergraduate courses at the University 
of Denver and the University of Colorado and have been doing 
both of these activities over the past 12 years.
    Prior to that, I was assistant secretary for information 
resources management and the first chief information officer in 
the new Department of Veterans Affairs between 1989 and 1991. 
Prior to that, I served in the United States Marine Corps for 
just under 21 years.
    Chairman Manzullo. Okay. We look forward to your testimony.
    Mr. Lewis. Thank you very much.
    Chairman Manzullo. Do you see how that brings things into 
perspective, knowing that you are a Marine for 21 years and on 
the veterans board, you know. Very significant.
    Mr. Lewis. Thank you, sir.
    Chairman Manzullo. Now we will start the clock. Thank you.

   STATEMENT OF EDWARD G. LEWIS, NATIONAL VETERANS BUSINESS 
                    DEVELOPMENT CORPORATION

    Mr. Lewis. Good afternoon, Mr. Chairman and distinguished 
members of the Committee. Thank you very much for your 
invitation to testify today. This is my first appearance before 
your Committee, and I am deeply honored to have this 
opportunity, particularly since your Committee is one of the 
congressional authorization committees for the National 
Veterans Business Development Corporation.
    As chairman of the board, as a private citizen, and as an 
entrepreneur, and as a longtime educator, I commend the 
leadership role that this Committee is providing and strongly 
support your efforts to bring focus on these critical education 
and training issues. Today, my comments on education and 
training are primarily focused on one group of individuals in 
this country, our veterans, including service-disabled 
veterans, but more specifically, on those veterans who are 
involved in entrepreneurial endeavors and small business 
enterprises.
    Let me focus on five issues from my written testimony. 
First, in my view, entrepreneurship is alive and well in this 
country. The self-employed, home-based businesses and small 
business enterprises are, in fact, the backbone of this 
nature's economic infrastructure, vitality, and strength. Many 
people in this country, including veterans, own small 
businesses and contribute significantly to domestic job growth, 
the overall productivity of this nation, and its competitive 
posture in the global marketplace. To be successful 
entrepreneurs, veterans must gain in-depth knowledge needed to 
succeed in both the start-up and growth phases of small 
business entrepreneurial activities. This knowledge can be 
gained through effective entrepreneurial education, mentoring, 
and counseling, not on a one-time basis but on a learning 
continuum throughout the life of the entrepreneurial activity.
    Second, there is no question that future technology 
innovation and information technologies are extremely important 
for organizations to remain competitive in the world's markets 
to help support job creation and growth and to meet our future 
challenges. To leverage the strategic value of information 
technologies within our organizations, we need to ``informate'' 
our organizations, not automate them.
    To evolve an Information Age society requires more 
effective education and training, including entrepreneurial 
education throughout our society. This education and training 
must begin at an early age and become a significant part of 
lifelong learning for all individuals as well as for and within 
organizations. It must become all encompassing to be effective.
    Third, congressional intent was and is clear within Public 
Law 106-50 passed in August 1999. Entrepreneurial, veteran-
owned, small business enterprises are critical to this nation 
and to our national economic viability. We must and should, as 
a nation, support veterans in their entrepreneurial endeavors 
to provide them the necessary resources and capabilities to 
help them grow and build their small business enterprises. To 
be successful in supporting veteran entrepreneurship, the 
Veterans Corporation, established under Public Law 106-50, must 
facilitate and coordinate public and private resources in a 
dynamic collaborative effort across this country in order to 
provide veterans with the necessary resources and capabilities 
to build and grow their small business enterprises, including 
entrepreneurial education, mentoring, and counseling.
    Fourth, we are currently working with the Association of 
Small Business Development Centers and the VA Center for 
Veteran Entrepreneurship to help facilitate implementation of 
the provisions of the recently passed Public Law 108-183 that 
can provide service members and veterans who have Montgomery GI 
Bill benefits with funding to pay for entrepreneurial education 
courses. I also want to recognize and fully support the recent 
Veterans Earn and Learn Act to help modernize on-the-job 
training and apprenticeship programs reflecting today's 
marketplace.
    Fifth, and finally, the Veterans Corporation is currently 
in the initial stage of developing and evaluating a concept 
referred to as the National Veterans Entrepreneurial Education 
Initiative. The overall goal is to provide high-quality 
entrepreneurial education in the most cost-efficient and 
effective manner possible to as many veterans as possible, 
including Reserve and Guard personnel. The intent of this 
national initiative is to develop and provide a strategic 
vision and strategic leadership at the national level, building 
a coalition of private and public organizations for effective 
implementation of this initiative at the local level. The 
strategic initiative would include an all-encompassing, 
comprehensive, lifelong entrepreneurial learning continuum to 
include a wide range of formal and informal entrepreneurial 
education, training, mentoring, and counseling, and assistance 
for veterans in full support of their entrepreneurial endeavors 
and small business activities.
    In summary, we in the Veterans Corporation are proud of our 
efforts over the past 20 months in providing effective 
entrepreneurial education to veterans, including service-
disabled veterans. Many of us also realize that for the 
Veterans Corporation to be truly successful in helping 
entrepreneurial veterans over the long term, we must be able to 
develop and deliver effective programs and services, including 
collaborative, cooperative partnerships that are unique and 
that directly support veteran entrepreneurship, including a 
dynamic, all-encompassing, lifelong-learning approach to 
entrepreneurial education, mentoring, and counseling. In this 
way, the Veterans Corporation can effectively support the goals 
of this Committee.
    Again, thank you very much, Mr. Chairman and distinguished 
members of the Committee, for this opportunity to express my 
views. I now would be pleased to answer any of your questions.
    [Hon. Lewis' statement may be found in the appendix.]
    Chairman Manzullo. Thank you. I appreciate the testimony.
    We have a unique situation in Rockford, Illinois. Our 
unemployment just fell below 10 percent for the first time in 
probably two years, and we are excited about that. No new 
manufacturing jobs have been added, but we continue to lose 
them. Illinois is one of four states that continues to lose 
manufacturing jobs at a lower pace than before. At the same 
time, we have a unique situation where people involved in 
manufacturing have placed ads in the newspaper advertising for 
machinists.
    Secretary DeRocco, you have a smile on your face that you 
have heard that situation before. Tell us what is going on. Can 
you take a guess at it? I have got an idea, but I would like to 
hear your ideas.
    Ms. DeRocco. The dynamics of each local labor market are so 
different, but there is a certain skill requirement in the 
machinist's trade that is not necessarily available in the 
manufacturing workforce as we have known it in the past. That 
is why it is so critical for this public workforce system to 
get smart by talking first with businesses and those who are 
creating jobs and have jobs available to understand what skills 
workers need so that we are investing this vast amount of 
public resources in training to those skills so that the 
workers can make transitions to jobs that are available as 
quickly and effectively as possible.
    We also, through reauthorization of the Workforce 
Investment Act, have encouraged Congress to make available more 
of the resources for incumbent worker training so that if there 
is a shift in a production process or in skill sets needed by a 
workforce before they are laid off, these resources can be 
brought to bear on behalf of those workers while they are still 
employed, and we do not experience more periods of 
unemployment.
    It is a skills mismatch and job availability that this 
system, acting as a smart intermediary that brings business and 
workers together effectively with the educational institutions, 
that can provide the training most effectively, and would make 
this a wise investment of public resources and a much more 
important system to local economies.
    Chairman Manzullo. That is good analysis. Just a couple of 
things I want to throw out, and either you want to comment on 
them or not touch them; that will be up to you.
    Maybe 50 years ago, 40 or 50 years ago, a bunch of people 
involved in education in this country sat down decided that 
there was something intrinsically wrong with people who work in 
shops and that machine oil was not good, that to be a 
successful person, you had to go to a four-year college and get 
a degree, and that has resulted in what I consider in this 
country to be an anti-manufacturing culture, that people like 
my father, who was a skilled machinist before he became a 
skilled butcher, skilled carpenter, and a skilled restaurateur, 
back in those days, they all worked with their hands. I looked 
upon the fruit of his hands with great pride.
    And then the technical schools and the high schools decided 
to scale back the classes--we called them machine shops and 
woodworking and automotive repairs--because the demand went 
down. Kids got it in their head that perhaps there was 
something more to life than working with your hands. And then 
the technical schools became centralized so the people that 
were going to go to college stayed at their high school, and 
those that were going to go into manufacturing or the 
``industrial arts,'' as it was called, were bussed to a central 
location. Thus, you had a segregation and a division in this 
country. Would either of you like to comment on that?
    Ms. DeRocco. I would love to.
    Chairman Manzullo. I think that Mr. Lewis has a thought on 
that, too. I saw him nodding his head. Go ahead.
    Ms. DeRocco. Okay. We will both comment. It is true that we 
have experienced something of a college culture in the United 
States, and both the Department of Education and the Department 
of Labor recognize that as we look at the jobs that are being 
created and available. Believing that all young people and 
transitioning workers need a strong academic foundation to 
succeed in almost any field of endeavor and supporting 
education fully for that reason, we also have launched an 
initiative we call ``Skills To Build America's Future'' that we 
hope will re-lift the attention to and the respect for the 
skilled crafts and trades that are prominent in so many of our 
growth sectors, starting with construction and moving into 
manufacturing.
    Many of the skills that are being developed or that need to 
be developed to support occupations and careers in these fields 
have long career pathways and lifelong education and training 
opportunities, and certainly we in the public workforce system 
need to support those better. We think we need to do it in 
partnership with the educational system with a new vision of 
what vocational education in this country and career 
opportunities are all about. We have begun that effort, and I 
would be eager to share more information about that with you.
    Chairman Manzullo. Mr. Lewis?
    Mr. Lewis. I have several points that I would like to make. 
One, with reference to whether or not it takes a college 
education to succeed out there, I think Bill Gates, Michael 
Dell, and Tiger Woods are examples where it does not, not to 
demean the college education. It has its proper place as does 
all sorts of different training opportunities, and we should 
not dismiss any of these.
    Second, with regard to the classroom environment, two 
things I would like to point out, at least in my experience, 
and I think I have a fair amount in terms of teaching, in 
business schools, across the board in this country, there is 
not an emphasis on manufacturing in the business schools. There 
is maybe a course here and there but certainly not a dedicated 
emphasis which we have general courses, and I think that 
certainly is something that should be considered. How can we 
evolve that type of environment in order to effectively support 
people moving into the manufacturing environment?
    Third, I also want to emphasize that one of the keys to 
success in our organizations, including manufacturing, is 
clearly the role of information technologies. However, in terms 
of the educational process, I think in many cases we sometimes 
do a disservice in terms of educating people in information 
technologies by focusing just on the technologies themselves 
and not in terms of the strategic value they provide to 
organizations.
    This is an issue that needs to be emphasized within all 
aspects of education and particularly in the university 
environment. Regardless of course, whether it is accounting, 
whether it is operations management, whether it is finance, the 
role of information technology is extremely important as 
students then take that knowledge to the private sector in 
terms of their jobs, whether it is in service or manufacturing. 
In order to be effective, though, in those jobs, they need to 
better understand the role of information technology.
    Chairman Manzullo. Thank you. Congresswoman Velazquez?
    Ms. Velazquez. Thank you, Mr. Chairman.
    Ms. DeRocco, you mentioned that the president increased 
funding for the workforce development programs, but, in fact, 
the administration Fiscal Year 2005 budget reduces funding for 
such programs as Perkins, Manufacturing Enterprise program, 
ATP, to name a few. I have here a chart prepared by CRS with 
all of the programs, and when you add them up, the total cut is 
$125 million. So how are we going to close the skill gap to 
address the training needs of our workforce when you are not 
supplying the resources that we need?
    Ms. DeRocco. I am not familiar with the chart you have in 
front of you. Our budget reflects that our 2005 request for 
training and employment services under the Workforce Investment 
Act is, in fact, an increase from the 2004 level of 
appropriations, so I would be interested in comparing those 
numbers with you.
    Ms. Velazquez. I guess that the administration has a 
conflict between your numbers and the ones that are supplied by 
CRS. That is the congressional research office.
    Ms. DeRocco. Our training and employment services budget 
for the Employment and Training Administration, which leads the 
workforce investment system, is $3.279 billion for adults in 
2005, compared to a $3.129 billion appropriation in 2004.
    I would also mention that, in terms of funding for the 
Trade Adjustment Assistance program, which you mentioned, we 
are providing $220 million, which is the statutory cap for 
training, in that program. As you know, it is a capped 
entitlement, so the amount available is what Congress makes 
available, which is $220 million------.
    Ms. Velazquez. You are not adding in your numbers those cut 
by the Department of Education within the Department of 
Education. That is why you get those numbers.
    Ms. DeRocco. In terms of the first question, you mentioned 
Perkins, which is at the Department of Education, and the 
Manufacturing Extension Partnerships, which are at the 
Department of Commerce, I did want to mention to you, as it 
relates to the Manufacturing Extension Partnerships, that we 
are working very closely with the MEPs in the president's high-
growth, job-training initiative in advance manufacturing 
because in many communities they are a partner in new projects 
that bring together business, education, and the public 
workforce system and are receiving funding through the 
Department of Labor in addition to their appropriated level. So 
I just wanted you to be aware of those projects that we are 
working on because MEPs can be very important components of a 
community's economic-development plan when there continues to 
be a strong manufacturing presence.
    Ms. Velazquez. May I?
    Ms. DeRocco. Absolutely.
    Ms. Velazquez. Yes. Here you are telling me that you are 
working with all of the MEPs, but when we look at the budget, 
the president zeroed out the budget for that.
    Ms. DeRocco. Again, I am not familiar with the Department 
of Commerce budget specifically. I did not believe that they 
were zeroed out. I just wanted you to know that there are 
additional cross-agency partnerships and funding opportunities 
that the MEPs------.
    Ms. Velazquez. Can we talk for a second about the Jobs for 
the 21st Century Initiative----
    Ms. DeRocco. Certainly.
    Ms. Velazquez [continuing] That represents the hallmark of 
the administration in terms of job training? An editorial in 
the Minneapolis Star Tribune found that funding for the Labor 
Department's key worker training programs have fallen by 10 
percent since the president took office. Could you please 
explain how the president's plan will compensate for these 
cuts?
    Ms. DeRocco. Well, again, I cannot hold the Minneapolis 
Tribune up as an expert on the federal budget. According to our 
budgets, there has not been a 10 percent cut in terms of any of 
the funding for the workforce investment programs at the 
Department of Labor. I will say the president has added $250 
million for a community college initiative that will add 
training opportunities for workers. He has also requested 
authorization for a $50 million additional investment in 
personnel reemployment accounts, which is not a cut in any 
other program but is, instead, an opportunity to add a new 
service-delivery option in the one-stop career center system.
    Ms. Velazquez. When it comes to numbers, coming from the 
administration--I do not know if you recall the debate on 
Medicare prescription drugs, numbers that were sent to us, and 
then after we passed the legislation and we voted on, we 
discovered that the White House was telling us that the numbers 
were not the numbers that they submitted to us. When it comes 
to the numbers, I really believe what CRS is sending us, and 
what it shows is that there is a cut in those workforce 
training programs within the federal government at a time when 
we need to provide resources because if we are saying that 
small businesses are the job creators, and I think that is what 
the president tell us when he goes around and visits small 
manufacturing business people, well, you know, we need to 
provide the resources to help them, and we are not. We are 
cutting them, according to the CRS.
    Ms. DeRocco. Again, I would also like to draw your 
attention and would like to share with you another set of 
numbers that we feel very strongly about, the strong investment 
in the workforce investment system and continue that 
investment. As you know, more than 80 percent of the dollars 
through the Workforce Investment Act are sent by formula down 
to the states and subsequently to local areas. Virtually every 
state of the union has carried over resources from one year to 
the next, resources that they have not been able to spend yet, 
and as long as that continues to be part of this system's 
financial-management picture, in tight budget situations, both 
the Congress and the administration seek to balance the 
availability of funds for programs.
    Ms. Velazquez. Let us talk about the states for a second. 
Can you please explain the Department of Labor's rule change 
which ended the practice of states bundling small groups of 
laid-off workers to reach the threshold of 50 employees needed 
to access national emergency grant funds?
    Ms. DeRocco. That actually was an incorrect press article 
as well that has appeared in several newspapers. This is in 
relation to the national emergency grants, which is a small 
proportion of the dislocated worker funds------.
    Ms. Velazquez. A lot of newspapers across the nation got 
the wrong information.
    Ms. DeRocco. The newspapers often get information wrong. It 
is, in fact, still the policy of the Department of Labor that 
there can be bundling, as I believe you called it, where there 
is a community-wide impact by layoffs within an industry sector 
or across industries, and the policy of the Department is 
clear. I would be glad to share with you the guidance that was 
issued.
    Ms. Velazquez. Will that apply to everybody or just rural?
    Ms. DeRocco. I am sorry. Just whom?
    Ms. Velazquez. Rural, rural communities.
    Ms. DeRocco. Just rural communities. The ability to go 
cross-industry is specifically attributable to rural areas.
    Ms. Velazquez. So what about nonrural communities?
    Ms. DeRocco. Again, the formula dislocated worker program 
dollars are available in every local community through their 
local workforce investment boards to provide exactly the same 
services for workers who are impacted in very small numbers 
throughout country, and there continue to be formula dislocated 
worker funds available to serve those workers. National 
emergency grants are an additional, supplemental source of 
funds for the larger dislocations, and in the case of rural 
communities, for a larger number of people when across 
industries or across sectors there is a layoff impact.
    Chairman Manzullo. Congressman Beauprez?
    Mr. Beauprez. Thank you, Mr. Chairman, and I would like to 
thank both of our witnesses.
    Secretary DeRocco, I would like to comment on something you 
brought up. The Community College Initiative and the personal 
reemployment accounts, I think, are very good solutions. The 
community college network out my way is doing a tremendous 
amount of good work.
    We did not rehearse this, but I want to go down the avenue 
that was started by the chairman. I think many times when we 
talk about reemploying or retraining a workforce, we are 
talking about solving a problem that has already been created, 
to a degree, and I would like to see if we cannot lessen the 
number of problems out there.
    The avenue that the chairman started down, I reflect often 
on the school when I went there, and we did have industrial 
arts, and we did have some practical training classes 
available. I am all for higher ed. Four of my kids have taken 
advantage of it. I took advantage of it, and I want to get as 
many doctors and professionals out there as we can possibly 
get, but I think the place that we are really falling down as a 
society are the many, many, many people that do not feel that 
that is where they are headed. And as a result, I have talked 
to a lot of school principals right in my district--I think of 
Jose Martinez at Jefferson High School there in Edgewater, and 
he put it very well. He said, I have got to find a way, a 
purpose, for these young boys and girls, these young men and 
women, to stay in school, and he said, I am struggling to give 
them that reason. What is the goal? What is the objective? And 
too often, they are out on the street because they see that as 
their path to the future.
    He started a nurse-certification program in his school. He 
is thinking of bringing industrial arts back.
    Now, the Community College Initiative, the personal 
reemployment accounts, if you will allow me, I see that as 
incentivizing a change in behavior, maybe to coin a phrase. Is 
there a better way we, as a society, use the Department of 
Labor? You, Mr. Lewis, I think one of the benefits of being a 
veteran is you learn how to do things while you are in service 
to the country. Is there a better way we ought to be 
incentivizing or providing the tools earlier in life for a 
broader perspective education? My dad got to eighth grade, but 
he was never out of work a day in his life because he used 
these. That is a pretty noble progression. If you work with 
your hands, it still works for me. Do either of you have ideas 
you would share with this Committee?
    Ms. DeRocco. Clearly, my colleagues at the Department of 
Education, clearly, both of us believe, the Department of Labor 
and the Department of Education, that there needs to be far 
better career information available to young people and to 
transitioning workers, knowledge about what is becoming 
available in the 21st century economy. There are career 
opportunities, jobs that we did not think of when we were in 
school and had never heard of, and they are being created every 
day.
    There is some responsibility on the part of the Department 
of Education and the Department of Labor to connect the world 
of work, the realities of education and the various pathways 
that are available in a post-secondary- education world. The 
post-secondary alternative should be expanded to create 
additional pathways to the full array of careers and 
occupations that are growing and available to our young people 
and workers, and I think my first recommendation would be that 
we take a much stronger role together in connecting the world 
of education and the world of work through good career 
information and leading to the kinds of guidance that will 
allow individuals to choose their own pathways and access these 
resources that are available to them to help them along those 
pathways.
    Mr. Lewis. I think this is a very, very important issue, 
and I think it is in a broader context, a broader issue that 
goes much beyond the educational environment. On one hand, when 
we talk about hands, I would put it in a different perspective 
and say that the mind is a wonderful thing if we properly 
evolve our capabilities to assess issues and be able to use our 
mind properly. What I mean by that is, all too often in my 
experience in education, we seem to just be going through the 
motions.
    I have a very personal view, for example, in terms of what 
a trend is in this country, for example, in distance learning, 
online education. Having taught, as I said, over 350 courses, I 
take a very personal view in establishing a very personal bond 
with each of my students, and I think education is all about 
that because that emanates from your home, it emanates from 
your family, and that is where it all begins. And so when I 
look at the educational models that we have out there, I become 
very concerned that we are distancing our teachers from our 
students.
    On one hand, I think that to be successful, to be able to 
reach out, to be able to work with the individual students to 
cultivate them, to imbue them, because I can only relate to my 
experiences growing up as a young man, that it is those 
teachers that took the time to work with me, to encourage me, 
not through a computer, not through, you know, go enter into 
some classroom, and you become a part of a group of people, but 
to truly work with me as an individual. That is where I think 
that our educational models have gone wrong. I think that our 
education, we should go back to the focus that it is a 
relationship that exists or that develops between the mentor, 
the teacher, as well as that student.
    Chairman Manzullo. Mr. Udall?
    Mr. Udall. Thank you, Mr. Chairman, and I thank the panel 
for being here today.
    I think you will agree with me that the real creators of 
jobs are small businesses. I do not think there is any doubt 
about that. And so, knowing that, we should want to get these 
programs that deal with the issues you are testifying about--
education, worker training--to small businesses, and that is 
very important. And there is kind of a disturbing trend here, 
it looks to me, and my question, I guess, is going to the 
Department of Labor and to the assistant secretary, but you may 
have an additional comment on this.
    The SBA's Office of Advocacy conducted two studies that 
looked at workforce development in small business in 1992 and 
2001. The studies found that among firms with less than 25 
employees the percentage who had heard of government training 
programs was cut in half, from 49.8 percent to 24.2 percent 
from 1992 to 2001. What I would like to know from the assistant 
secretary is what initiatives has the Department of Labor 
undertaken to correct this problem and increase outreach to 
small businesses. Can you tell us specifically what resources 
have been used to address this shortcoming?
    Ms. DeRocco. That is a very important shortcoming you have 
identified, congressman, and I would agree with you that the 
public workforce system and its resources should be known by 
small businesses and should be accessed by small businesses. As 
you know, this is a system that has devolved so that local 
workforce investment boards really oversee the service delivery 
system in communities, the one-stop career centers, and those 
local workforce boards are appointed by mayors or county 
officials, and it is through those boards that there should be 
broader outreach into the community and marketing of the 
services that are available. We really do not have as much of a 
direct federal role other than to encourage the------.
    Mr. Udall. So your answer would be the Department of Labor 
itself has not dedicated any resources to this kind of outreach 
that I am talking about.
    Ms. DeRocco. I guess that is not correct. We do have a 
partnership with the Small Business Administration specifically 
to work in communities and have dedicated some demonstration 
resources from our national activities programs to reach into 
communities and create small business opportunities, 
entrepreneurial training, and the kind of business training 
that many small businesses need initially.
    We also have a national business engagement consortium that 
is a number of states that we fund to create marketing 
materials to be used nationally by the one-stop career centers 
and the local boards for both small and large businesses. 
Washington State chairs that national business consortium. And 
we have full partnerships through which we also have financial 
support with the U.S. Chamber of Commerce and the National 
Association of Manufacturers to reach out to the small 
businesses within their memberships to better connect those 
small businesses with the public workforce system in 
communities around the country. I could tally the resources 
attributed to this and get that to you later, if you would 
like.
    Mr. Udall. And do you believe that you have dedicated the 
kind of resources to turn this around? I mean, this is a pretty 
dramatic drop in a ten-year period, from 49 percent to 24 
percent.
    Ms. DeRocco. I am not familiar with that particular survey, 
but I would say nationally we have a minimal amount of 
resources that are held nationally in this workforce investment 
system. The majority of the resources are at the state and 
local level. This certainly is an area that we work closely 
with our state and local partners to ensure--have we done 
enough? Probably not.
    Mr. Udall. Okay. Well, I certainly think the Committee 
would be interested in the dollar amounts and the specifics of 
what you have dedicated.
    The same study also found that the percentage of small 
businesses that have ever used government training programs 
dropped from 15.9 percent to 4.5 over the same period. I am 
running out of time here, but if you could also try to let us 
know what the resources were that were dedicated to turning 
that around.
    Ms. DeRocco. Absolutely.
    Mr. Udall. Thank you.
    Chairman Manzullo. Congressman Bartlett?
    Mr. Bartlett. Thank you. I am sorry I could not have been 
here for your testimony. In a former life, I spent 24 years 
teaching in technical areas. I also worked in the business 
world. I worked eight years for IBM.
    We face two problems in our country that I do not know the 
answer to, and maybe you can help. When I was with IBM, we were 
concerned that we at IBM and we as a country were at high risk 
of losing our superiority in computers to Japan. I left there 
in '75, to give you some context for the time. For a very 
simple reason, we noted that every year Japan turned out more, 
and at least as good, scientists, mathematicians, and engineers 
as we did in this country, and we at IBM understood that if 
that trend continued, we were not going to maintain our 
superiority in computers.
    For the short term, our inability to attract bright young 
people to these pursuits is a risk to our superiority in 
economics. For the longer term, it puts us at risk for our 
military superiority. It will not continue to have the world's 
best military unless we turn out scientists, mathematicians, 
and engineers in large enough numbers. If you go to our 
technical schools today, you will notice that probably a 
majority of the young people who are there studying are not 
citizens of this country.
    A second problem we have is attracting people to go into 
skilled areas where they do things with their hands, and today 
you have to be pretty bright to go along with that also. We now 
are importing these kinds of skilled people because we cannot 
produce them through our education system. One of the problems 
is that you get what you appreciate, and I notice that the 
White House is not inviting academic scholars and appreciating 
them the way they invite athletic figures and appreciate them. 
And I am wondering what your suggestions are as to what we can 
do as a society to attract more of our bright young people to 
go into science, math, and engineering.
    By the way, today, they are increasingly going into what I 
consider potentially destructive pursuits. Now, we need a few 
of each of these, but more and more our best and brightest 
young people are going into careers in law and political 
science. Now, we need a few lawyers, and we need a few 
political scientists, and we have got more than a few of each 
of those. What is your suggestion as to how we might capture 
the imagination of our population and inspire our young people 
to go into these technical careers? I think this is what really 
puts us at risk in our competition with the rest of the world.
    Ms. DeRocco. We both have ideas. It is a little outside 
probably both our bailiwicks in terms of direct jurisdiction 
over programs, but, again, I would emphasize that in our work 
through the High Growth Job Training Initiative, in all 
sectors, from aerospace and advanced manufacturing to 
information technology and the emerging sectors of 
biotechnology and geospacial technology, without exception in 
these forums, executives and educators have pointed to exactly 
the issues you have pointed to. Number one, we need to excite 
the young people, which I think we do, first and foremost, by 
providing information about the careers and the opportunities 
for growth and prosperity in those careers. We do not do enough 
of that as a nation, and we have joined together at the 
Department of Education and the Department of Labor to do that. 
I think that is critically important.
    Interestingly, one of the recommendations that came from 
one of the forums in which the president's science adviser, 
John Marberger, participated was precisely your recommendation 
to have a very specific recognition program, recognition of 
excellence, for individuals in the engineering, math, and 
sciences fields to elevate once again, as we have in the past 
through the space program, the creativity and the ingenuity of 
our people to choose their own paths into these fields of 
endeavor that are so needed in every sector of our economy.
    Government should not choose pathways for young people or 
transitioning workers; that is an individual choice. We do have 
a responsibility to provide good information, to get that 
information in the hands of those who can make their own 
decisions about their pathways, and I think that is something 
that the Department of Education and the Department of Labor 
are now doing.
    Mr. Lewis. I think there are some very interesting issues 
here with regard to how do we motivate people to want to spend 
a career in these types of, as you refer to, doing things with 
your hands, but more specifically, with scientists and 
engineers. I was first educated as an aerospace engineer.
    Part of the problem, I think, as a society as a whole, in 
the past, let us say, since the 1996 time frame with the dot 
com boom and the focus that we have seen in this country where 
everybody thinks they can get rich quick by doing certain 
things that tends to take away from that type of emphasis on 
what I would call those really substantive types of areas in 
terms of education for science and engineering.
    But I think, on the other hand, when you look at the 
educational environment, and when we talk about mentoring and 
we talk about counseling, I think, both in our educational 
systems, secondary systems, but also at the university level, 
and then even more important, out in businesses, one of the 
things that I have seen that we have lost, and that is the 
whole concept--I will put it this way--that businesses, 
companies, working with their individual employees in terms of 
career development,--there are exceptions out there, but 
because of layoffs, because of downsizing, because of those 
types of issues and the factors that have put so much pressure 
on companies to not focus on their people, I think, has been a 
detriment in terms of this educational focus, and I would argue 
that we need a return to that. We need to have a more personal 
touch in working with our people and helping them to develop 
and focus on their careers.
    Chairman Manzullo. Congressman Franks?
    Mr. Franks. Thank you, Mr. Chairman, and thank you to the 
panel here.
    Secretary DeRocco, I know that a lot of times government's 
approach is to find the need, to find the desired outcome, and 
to try to put our heads together and come up with the best 
strategies in the planning and training that we can to 
precipitate that outcome. I am remembering some experiences in 
state government, and one of the things was it seemed that we 
were basically reverse oriented at times, and by that, I mean 
that we studied the problem rather than the successes.
    And I am just wondering if there are any models that you 
are working on that, whatever the job necessities are, if you 
go and find the young people or the people that are 
successfully making transitions from another career or from, 
say, the loss of a job, to that new job, and they do everything 
that can possibly be done to not only amplify their success but 
to try to replicate their success and other people's 
circumstances. Because it seems to me that with the economy, 
even as complex as it is, and with human behavior, as much more 
complex as that is, there is almost a genetic code to crack 
here. Certain behavior is kind of inborn and innate, and we 
would do far better spending time to try to cooperate with that 
and to try assist that, and I am just wondering, are there 
models to try to study successes, whether it is young people or 
whether it is veterans, or whoever that are successfully going 
into these new career opportunities and trying to replicate 
their successes?
    I was the Director of the Governor's office for children in 
Arizona, and when we began to think that way, we had a great 
deal more success. We studied successful kids, and we found 
some very basic commonalities, and when we tried to cooperate 
and incent those qualities in others, we had a lot more 
success, and I am just wondering if that has any bearing here.
    Ms. DeRocco. Hugely, and it is exactly what we are doing 
through the president's High Growth Job Training Initiative. We 
are building on successes in communities where a partnership 
among employers with jobs and knowledge of what skill standards 
are needed for workers to be successful in those jobs partner 
with the educational institutions so that we can create the 
capacity to enlarge the training available to more workers in 
those partnerships with our public workforce investment system, 
which is the source of the human capital.
    We look for those partnerships. We are providing incentives 
through additional funds to grow those partnerships and to 
replicate them in other communities across the nation. We are 
also going to highly publicize, through a Web site for the 
workforce system for all educational institutions and for 
businesses across America, exactly how these partnerships are 
put together so that the investment of taxpayer dollars that is 
devolved through our state and local workforce investment 
partners can replicate these successes.
    So you are absolutely on point. This is the way we make 
sure that our system responds to success and does not get 
bogged down in failure.
    The other point I wanted to make is that the small amount 
of national dollars available to the Department of Labor in 
this devolved system for models and demonstrations nationally 
are specifically used to model successes in other areas of the 
country, and we have partnered workforce boards, which are the 
oversight bodies for our entire service delivery system, in 
areas where they are successful and meeting high employment 
retention and earnings gains goals, with workforce boards that 
have not quite gotten there yet, and this peer-to-peer sharing 
of successes that is now occurring is very exciting and having 
great results in building the capacity of the system, raising 
the bar for the whole system, and its contribution to making 
more happen for more workers and more businesses across 
America.
    Mr. Lewis. If I may for the next 30 seconds, we, the 
Veterans Corporation, in the programs that we are starting in 
terms of training, entrepreneurial education, we are definitely 
looking at success models, both in terms of Robert Morris 
University in Pittsburgh and what we are trying to accomplish 
in Colorado as well as South Florida, and, in addition, a new 
concept called ``community-based organizations,'' where we have 
pilot tests going on in St. Louis as well as Pittsburgh. Both 
of those efforts, in terms of entrepreneurial education and 
community-based organizations, are going to provide us the 
successful templates to carry this throughout the country.
    Mr. Franks. Thank you, folks, and thank you, Mr. Chairman.
    Chairman Manzullo. Mr. King?
    Mr. King. Thank you, Mr. Chairman. I regret I was not here 
to hear the bulk of your testimony. However, I would reference 
in your written testimony, at least, Ms. DeRocco, you make 
reference to an increasing number of non-English speakers and 
that language skill is becoming a greater and greater problem.
    I am curious about this in a number of different ways, but 
one of them would be things that are brought to my attention, 
that we are having American citizens that are maybe second 
generation that are not picking up the language skills. Would 
you have any experience with that or any insight into that?
    Ms. DeRocco. I know that that is true, and this is an area 
where we are building a strong partnership with the Department 
of Education and the Adult Education program because a 
significant percentage of individuals who are accessing the 
adult education programs around the country are second-
generation Americans who still have language and literacy 
issues, and that is impacting their ability to access 
employment and career ladders. So we need a much stronger 
connection and much more effective programs.
    Mr. King. Could you explain that phenomenon, how a person 
can be born in the United States and reach working age and not 
have English language skills to the point where it is difficult 
in the manufacturing process to communicate with someone who is 
a second-generation American?
    Ms. DeRocco. I wish I could explain the phenomenon. You 
would think that our public education system, if the young 
people are moving through it, would have attained a level of 
language and literacy skills------.
    Chairman Manzullo. Secretary, could you pull the mike a 
little bit closer?
    Ms. DeRocco. Certainly. Absolutely. I am sorry.
    Chairman Manzullo. Thank you.
    Ms. DeRocco. This is an area where our educational system 
needs to focus far more dramatically.
    We also are making the Workforce Investment Act resources 
available for additional language and literacy training as 
opposed to vocational training because there is clearly a need 
in many sectors of the economy.
    Mr. King. But I understand that with regard to people who 
come here without language skills. I am just going to say, I 
believe it is something far deeper in second-generation people 
who do not attain those skills. I am seeing Mr. Lewis with a 
little bit of animation on this, so I would like to hear from 
you, Mr. Lewis, on that.
    Mr. Lewis. I have a very specific comment. I am the 
recipient of what comes from the secondary school system in my 
teaching in universities, and my comment overall is, frankly, I 
am appalled at the level of grammar and writing skills that I 
see in my classes. I emphasize a considerable amount of 
writing, and I just cannot use the word anymore than it is 
atrocious.
    We need to place more emphasis on going back to the basics 
of reading and writing and arithmetic. I hate to say that, but 
the ability to communicate, orally and written, is extremely 
important, and they have got to learn it at the beginning of 
their educational process because it is extremely important as 
you go all the way through the universities, through any types 
of training programs, and ultimately in business, and if you 
are going to be successful in business, you have got to be able 
to talk and write.
    Mr. King. Would there be anything about the multicultural 
programs that we have in this country that you could identify 
that encourages development of English language skills?
    Ms. DeRocco. Encourages development of. Actually, I was 
thinking, as my colleague was talking, that the emphasis in the 
past perhaps on English as a second language rather than 
English as a primary language is a problem that might have at 
least aggravated the situation that you have identified. I am 
not familiar with research on that topic. I would be glad to 
look into it.
    Mr. King. Mr. Lewis? Does multiculturalism encourage 
English language skills or the development of those skills?
    Mr. Lewis. Does it encourage it? From my experience in the 
educational environment, frankly, from a multicultural 
perspective, particularly for those students, and someone 
mentioned earlier in terms of that we are seeing a lot more 
students from other countries in our colleges and universities, 
and I have certainly experienced that in my areas, but, 
frankly, these students are some of the best, and, if anything, 
they add to the quality of education and the educational 
environment for what I will call our traditional U.S. students. 
So both in terms of the desire to learn, the desire to put the 
level of effort in to learning, yes, they may have, in terms of 
actual English skills, there may be some lacking there, but 
these people add tremendous value to that educational 
environment.
    Mr. King. And, Mr. Lewis, I agree with that statement. My 
focus was more on the programs of multiculturalism themselves 
rather than the reaction of the students, and my sense of it is 
that as we roll out a multiculturalist agenda, we forget to 
promote the essential communications skills that make these 
people that come from all over the world successful in this 
country, and so I appreciate your insight into that point, and 
I thank the chairman.
    Chairman Manzullo. Mr. King, thank you. I want to get on to 
the second panel. We could pick up the sociological aspects 
perhaps at a different time.
    I want to thank you for coming, and then we will impanel 
the second panel as soon as possible. Thank you.
    Mr. King. Thank you, Mr. Chairman.
    [Pause.]
    Mr. Bartlett. [Presiding] I believe our second panel is in 
place. Thank you all very much for coming. Dr. Beth Buehlmann, 
vice president and executive director of the U.S. Chamber of 
Commerce; Brian McCarthy, chief operating officer, Computer 
Technology Industry; Roger Joyce, vice president of 
engineering, National Association of Manufacturers; Dr. Ernst 
Volgenau, chairman and CEO, SRA International; Matthew Coffey, 
president and chief operating officer, National Tooling and 
Machining Association; Randolph Peers, vice president for 
economic development, Brooklyn Chamber of Commerce; and Michael 
Caslin, executive director and CEO, National Foundation for 
Teaching Entrepreneurship.
    You can proceed with your testimony in that order. All of 
your written testimony, without objection, will be made a part 
of the record. We would encourage you, if you can, to limit 
your remarks to five minutes. Rest assured that there will be 
more than ample time during the question period to amplify 
issues of particular interest to either you or members of 
Congress. Thank you very much for coming, and Dr. Buehlmann.

    STATEMENT OF BETH B. BUEHLMANN, U.S. CHAMBER OF COMMERCE

    Ms. Buehlmann. Good afternoon, Mr. Chairman, Congresswoman 
Velazquez, and members of the Committee. I am the vice 
president and executive director for the Center for Workforce 
Preparation, a nonprofit affiliate of the U.S. Chamber of 
Commerce, the world's largest business federation, representing 
more than three million businesses and organizations.
    CWP is on the forefront of helping businesses, especially 
small- and medium-size businesses, in partnership with chambers 
across the country, find, use, and build resources to develop a 
skilled workforce and support productive workplaces. We are 
addressing a key employer concern, and that is finding, 
retaining, and advancing qualified workers. Over 90 percent of 
the businesses that are members of chambers are small and 
medium size, where the majority of job growth occurs and where 
you have asked me to focus the emphasis of my statement.
    My statement covers three points. First, in CWP surveys of 
small- and medium-size businesses conducted over the past three 
years, employers have reported difficulty in finding qualified 
workers due to lack of skills. In these same surveys, employers 
state that to remain competitive, they need qualified workers 
who can perform the job today and adapt to the demands of 
tomorrow, yet 30 percent of these employers are concerned that 
the skills of their workforce are not going to keep pace.
    Consider that, in 1950, 80 percent of jobs were classified 
as unskilled and that now an estimated 85 percent of all jobs 
are classified as skilled. Most jobs now require some post-
secondary education, but the growth in the number of workers 
with education beyond high school will only be one-seventh of 
what it grew between 1980 and 2000. Many of tomorrow's jobs do 
not exist today, but we know that they are going to require 
even greater skills and education.
    Second, we know that a significant number of entry-level 
workers are not equipped with the key skills they need to 
succeed in an increasingly complex and technological work 
environment. GAO and other researchers say that training and 
retraining programs are most successful when they prepare 
individuals for a specific, existing job. CWP, with state and 
local chambers, fosters collaborations between post-secondary 
institutions, employers, and the publicly funded workforce 
system. Many small- and medium-size businesses, however, do not 
have the human resources infrastructure to train their workers 
in- house. They are very dependent on resources in their 
communities.
    Chambers can connect small- and medium-size businesses to 
these resources and can aggregate the demand of local employers 
to leverage those resources. They bridge the gap between 
employers and workforce development providers and services, 
connecting businesses with the best programs to meet their 
needs. For small- and medium-size companies, this means that 
chambers can make the connections with training programs and 
services that these businesses find difficult to make on their 
own, in other words, serving as a strong, employer-led, 
workforce intermediary.
    Third, as we look ahead, employers and workers are going to 
place even greater reliance on levels of education to address 
the ever-increasing skill demands of a competitive American 
economy. Lifelong learning for working adults, K-12, and post-
secondary education all play a specific role in preparing the 
present and next generation of workers for the challenges of 
the 21st century labor market. Knowledge is being outdated at 
rates that are escalating faster than ever before. For example, 
a bachelor's degree in business now has a shelf life of just 
about five years. Clearly, providing continuing education 
opportunities for employees is no longer an option; it is a 
necessity to staying competitive.
    So what are some of the implications that can be drawn from 
what I have said? With 73 percent of all post-secondary 
education students being nontraditional students, in other 
words, working adults who are seeking additional education and 
training to return to the workforce, trying to remain current 
in their field, looking to increase their potential earnings, 
pursuing another job or even considering a career change in 
today's demanding economy, the policies that we have in place 
need to be examined in light of this growing need.
    We can no longer focus only on traditional students as we 
think about how employers and workers will learn, gain skills, 
and remain competitive. And with only 60 percent of ninth 
graders graduating, we need to strengthen our K-12 education 
pipeline, reduce dropout rates, require a rigorous and relevant 
high school curriculum, and align high school coursework with 
what is demanded of our students to enter college and the 
workforce. I tend to call this the ``I don't know/I don't care 
phenomenon,'' and I mention that in my testimony. Many of our 
graduates are prepared for neither college or the workforce.
    CWP, in partnership with local chambers, other workforce-
development organizations, and our funders, has been 
instrumental in defining and demonstrating the unique role of 
local chambers in workforce development and education. My 
written testimony mentions a few examples of our work with 
partners such as the American Association of Community 
Colleges, Job Corps, the National Association of Manufacturers, 
and the Annie E. Casey Foundation.
    In conclusion, any meaningful strategy to combat the 
nation's workforce challenges must be met with a comprehensive 
education and workforce development system. We are already 
attempting to improve our K-12 system. We must expand our 
services in the post-secondary education system to accommodate 
adult working students. In today's and tomorrow's global 
economy, lifetime learning has become mandatory and should be 
accessible, flexible, and convenient to help maintain America's 
competitive workforce.
    I thank the Committee, and I look forward to your 
questions.
    [Ms. Buehlmann's statement may be found in the appendix.]
    Mr. Bartlett. Thank you. Mr. McCarthy?

 STATEMENT OF BRIAN A. McCARTHY, COMPUTER TECHNOLOGY INDUSTRY 
                          ASSOCIATION

    Mr. McCarthy. Mr. Chairman, members of the Committee, good 
afternoon and thank you for the opportunity to appear before 
you today. I am Brian McCarthy, the chief operating officer of 
the Computing Technology Industry Association, based in 
Oakbrook, Illinois.
    CompTIA represents more than 19,000 member companies in the 
IT industry, the majority of which are small-to-medium-sized 
enterprises. CompTIA is committed to fostering the growth of 
the IT industry by promoting industry standards, and growing 
professional IT expertise through training and certification, 
and developing relevant business solutions. CompTIA believes 
that we must promote public and private sector efforts to 
provide Americans with the tools they need to compete and 
succeed. Key among those tools is the acquisition of current 
and evolving IT skills, skills that are increasingly demanded 
in order to be successful in today's economy.
    The changes wrought by IT on society are transforming the 
fundamental nature of the workforce. As global competition 
intensifies, the dependency on fluent and flexible IT skills 
will only grow. Not surprisingly, much of the demand for these 
skills will be for small businesses. According to the 
Department of Labor, around 92 percent of all IT professional 
workers are in non-IT companies, and 80 percent of those 
professionals are working for small companies.
    We recently surveyed some of CompTIA's small business 
partners to assess the challenges they face in training their 
workforce. We found that it is increasingly important for small 
IT businesses to equip employees with essential technical 
training in order to support their clients' complex business 
systems. Small businesses are leaner and thus require highly 
skilled employees to perform multispecialized IT functions 
efficiently. Underlying this challenge is the cost of training.
    As a result, small businesses are forced to evaluate 
alternative means of training. To this end, CompTIA has 
developed specialized initiatives and public/private 
partnerships dedicated to IT training and certification across 
industry sectors. I would like to highlight some of these 
important training initiatives currently underway, the first of 
which is the National IT Apprenticeship System, or NIAS, 
jointly developed in partnership with the Department of Labor.
    The program places new workers under the direction of 
experienced IT professionals and provides a structured program 
for measuring practical skills and achievements, identifying 
weaknesses in skill gaps, and applying classroom and on-the-job 
training to addressing those gaps. Research studies performed 
by the Department of Labor and by CompTIA indicate that on-the-
job training is much more effective when combined with 
classroom instruction than when delivered on its own.
    Key to the success of this program is partnering with 
community colleges, other educational institutions, and 
ultimately employers. CompTIA is also currently administering 
advanced technical skills training programs aimed at closing 
the skills gap in our nation's IT workforce. Under these 
programs, nearly 2,700 American technology workers in 12 states 
will receive advanced IT job training in the coming months in 
programs administered by CompTIA. Each of these states shares a 
key characteristic in common: a projected long-term demand for 
IT professionals in high-skill, high-level positions.
    Policy initiatives and public/private partnerships such as 
these can be designed to buttress the underlying training and 
reskilling framework needed for U.S. IT-skilled workers today, 
but getting Americans primed for emerging job opportunities 
must be a central goal of U.S. policymakers as well as the 
private sector. While many of these jobs will require a four-
year degree, an increasing number of these positions can be 
filled by graduates of vocational schools and community 
colleges, as well as through the apprenticeship programs. In 
this regard, professional certification becomes an ongoing 
validation across all of these programs. It provides 
credibility, recognition of achievement, validation of 
technical expertise, and quality assurance.
    Tremendous possibilities abound for Congress to help 
American IT workers to adapt to broader, IC-centric changes 
moving through the global economy. For example, programs 
provided through the Workforce Investment Act and the Perkins 
Act are extremely valuable. Additionally, early education 
programs which nurture a child's interest and achievement in 
math and science are essential to filling future demands for 
America's tech workers and should be fully funded. Promoting 
capital investment in R&D are also key elements of a growth 
agenda. Just last week, H.R. 4392, the Technology Retraining 
and Investment Now Act, or TRAIN, was introduced, which 
provided a tax credit for IT training. Policies such as these 
will be especially helpful to small businesses, many of whom 
are faced with substantial hurdles to remain competitive.
    America must have a fluid and flexible work force. That is 
the end goal here. When this can happen, workers can have the 
tools to remain employed and employable, and companies have the 
human resources to meet global consumer demand and creating 
jobs here at home.
    Mr. Chairman, I would like to than you for the opportunity 
to testify today, and we at CompTIA, our members and staff, 
stand ready to help Congress understand further the dynamics at 
play in the U.S. and global economy, especially as they relate 
to the maintenance and upgrade of IT skills in the U.S. 
workforce. Thank you.
    [Mr. McCarthy's statement may be found in the appendix.]
    Mr. Bartlett. Thank you very much. Mr. Joyce?

STATEMENT OF ROGER JOYCE, NATIONAL ASSOCIATION OF MANUFACTURERS

    Mr. Joyce. Thank you, Mr. Vice Chairman. I am Roger Joyce. 
I am vice president of engineering at the Bilco Company, a 
small family business started in 1926 by my grandfather, George 
W. Lyons, Sr.
    We are manufacturers of architectural-access products, with 
200 employees in facilities in West Haven, Connecticut; Truman, 
Arkansas; and Santa Teresa, New Mexico. We are a member of the 
National Association of Manufacturers, the nation's oldest and 
largest industrial trade association, representing 14,000 
member companies and 350 member associations serving 
manufacturers and employees in every industrial sector in all 
50 states. Approximately 10,000 of NAM's members are small- and 
medium-sized manufacturers, of which we are one. I am also vice 
chair of CBIA, the Connecticut Business and Industry 
Association, one of NAM's statewide affiliate members.
    I thank you for this opportunity to discuss the importance 
of a strong manufacturing workforce to our country and the 
workforce challenges that today threaten our competitive 
leadership in manufacturing.
    A year ago, manufacturers were struggling through one of 
the toughest business climates in recent memory. In order to 
stay competitive, they tightened their belts on things like 
capital equipment spending, expansion plans, and hiring and 
training employees. Interestingly, this may sound somewhat 
counterintuitive. Oftentimes, the slow periods are the best 
times to up-skill workers. When facilities do not have to 
operate 24/7, it is much easier and more cost effective to take 
people off the line for training. And yet there are still skill 
shortages in manufacturing, the recent downsizing of two 
million manufacturing jobs notwithstanding.
    Skill shortages remain, and here is why. First, consider 
the unavoidable demographics of the labor force. The boomer 
generation, in every field, from teachers to machinists, are 
starting to retire. According to one major corporate vice 
president, the average age of their firm's highly skilled, 
highly paid machinists is 58 years' old, and there is no 
pipeline of replacements.
    Second, the march of advanced technology is infusing old 
industrial sectors, like mine, while creating new ones, raising 
skills requirements throughout the economy and creating serious 
skill gaps in the labor force.
    Third, firms already struggling with these two challenges 
confront a continuously globalizing economy where competition 
is intensifying on capabilities as well as cost.
    Fourth, young people today do not see manufacturing as a 
viable career opportunity. Changing the perception of 
manufacturing will require aggressive marketing of 
manufacturing opportunities to potential new entrants to the 
workforce who must have the requisite math, science, and 
literacy skills needed in today's manufacturing environment.
    The recent upturn in the economy changes none of this. In 
fact, as conditions improve, more job opportunities requiring 
higher skill levels will be created.
    All four of these conditions center on the skills of the 
labor force, which needs systematic upgrading and expansion. 
This argues for a new policy approach to workforce development, 
especially during a recession when hundreds of thousands are 
idled, many of whose basic education and skills are inadequate 
or at risk in modern manufacturing.
    One approach is to turn downtime into training time, 
something some of our European colleagues have done for 
decades. In our business, we use this time to train our 
employees in the principles of lean manufacturing. As a result, 
even though business activity will rise and fall, we become a 
stronger competitor.
    Until now, human resource policymakers have seen recessions 
as storms to be weathered. The labor force policy response was 
mainly income and benefit maintenance and maybe some relocation 
assistance. That has been the status quo, and we cannot afford 
to maintain the status quo. This is not about just fixing the 
unemployment system. The issues at stake will lead to a 
declining economy if we constrict ourselves with antiquated 
systems. We need to ratchet up our skills base now.
    We need to make the public workforce system more employer 
friendly. Supporting the 1998 Workforce Investment Act will 
help us more effectively match labor market demands with labor 
market supply. The current administration has made great 
strides in creating a ``dual-customer'' system, but we need to 
sharpen the focus because too few employers know the system 
even exists, or when they do, it falls short of meeting their 
needs for skilled and job-ready workers. As effective as the 
Workforce Investment Act has been, we are disappointed that 
funding has been reduced 10 percent and urge review of this 
critical area.
    One strategy NAM and the U.S. Chamber have successfully 
employed, in partnership with foundations and the U.S. 
Department of Labor, has been to work through their employer-
intermediary organizations. In particular, business and trade 
associations are highly effective organizations for small 
business, allowing our voices to be heard and providing 
opportunities for us to participate in the employment and 
training system that often are only available to large 
corporations.
    One example of this is the three-year, $2.2 million, U.S. 
DOL demonstration grant for incumbent and dislocated workers, 
which CBIA received in 2002 to assist manufacturers with job 
training. Despite the recession and loss of manufacturing jobs 
in Connecticut, CBIA, working with both community colleges and 
private contractors, was able to provide training assistance to 
23 companies, train over a thousand employees who took 126 
courses in 60 different training areas. Courses in lean 
manufacturing, Six Sigma, supervisory training, teamwork, 
blueprint reading, CNC machining, and laser and fuel cell 
technology, as well as English as a second language, were made 
available to employees through this federal grant program. 
Participants in this program were better prepared for their 
current jobs and able to move more effectively into higher 
level positions.
    Unfortunately, it is my understanding that this 
demonstration grant program has been eliminated. As a result, 
after June 30, when this grant is completed, CBIA will no 
longer be able to assist manufacturers in a way that works so 
effectively for us. We feel that such programs should be 
restored and, indeed, expanded.
    We need to support our community college system. The 
president has made it clear that he does. Community colleges 
are the backbone of the worker education and training system, 
and we need to increase our investment in our communities by 
supporting their growth and connection to their local 
employers. Gateway Community College serves the greater New 
Haven business community by developing programs that address 
our specific requirements, even employer by employer, if 
necessary.
    We also need to ensure that our citizens have the financial 
aid they need to get access to post-secondary education that 
will give them good jobs and family-supporting wages. We need 
action on the Higher Education Act to ensure that access to 
funds is streamlined and available when needed, and we 
certainly need to strengthen the ties between higher education 
and the workforce needs of business.
    The Bilco Company is a small manufacturer, but we compete 
in the world marketplace. Ten years ago, we sold our products 
in five countries. Today, we sell in 65 countries. Our 
workforce must be at least as skilled as our competitors' in 
other countries, but we are losing this battle. The Department 
of Labor estimates that the skill shortage I have described 
will affect 10 million workers by the year 2010.
    A new program in Connecticut is starting to make a 
difference. We actively support the Connecticut State Scholars 
pilot program in New Haven. This program connects the school 
district with business to encourage eighth graders to choose a 
more rigorous curriculum in high school. Upon completion of 
this program, they are in a much better position to enter the 
workforce, the military, or pursue higher education 
opportunities. This means they are better able to compete with 
their peers around the world.
    I encourage the Committee to support the initiatives I have 
presented so that manufacturers like myself are in a position 
to compete, to grow, and to create new jobs. I thank you.
    [Mr. Joyce's statement may be found in the appendix.]
    Mr. Bartlett. Thank you. Mr. Joyce, does your company make 
the outside-access door for basements?
    Mr. Joyce. Yes, we do. That is the world-famous, Bilco 
basement door.
    Mr. Bartlett. It is, indeed. I would just like to note that 
when I was growing up that more people referred to the 
refrigerator as the ``Frigidaire'' because the Frigidaire had 
so dominated that market, and when you were going to buy an 
outside, basement-access door, you were going to buy a Bilco 
door, no matter who made it, because you have so dominated the 
market in quality and recognition.
    Mr. Joyce. Yes. Thank you, Mr. Chairman. My grandfather 
invented that product in the backyard shop, and it really was 
the genesis of our company, and it is a model of ingenuity, of 
entrepreneurship, that we still follow today. Thank you.
    Mr. Bartlett. And you are selling it in 65 countries today. 
Congratulations. Thank you. Thank you.
    Mr. Volgenau?

         STATEMENT OF ERNST VOLGENAU, SRA INTERNATIONAL

    Mr. Volgenau. Mr. Chairman and members of the Committee, my 
name is Ernst Volgenau. I am chairman and CEO of SRA 
International, and I am representing the Information Technology 
Association of America, where I am chairman of the Workforce 
Education Committee.
    The Information Technology Association of America is a 
leading trade association for the information technology 
industry. ITAA has 380 members, and SRA International is one of 
them. ITAA member companies represent a broad spectrum of 
industry sectors: computer software and services, e-commerce, 
enterprise systems, broadband communications, and other areas. 
ITAA represents companies of all sizes, from large, 
multibillion-dollar enterprises to small, entrepreneurial 
firms.
    I appreciate the Committee's interest in small business. I 
know what it is like to be part of a small company. I started 
SRA International in the basement of my home in 1978. Today, 
SRA International is an information technology consulting and 
system-integration company having revenue of about $600 million 
and about 3,300 employees. We have been on the Fortune magazine 
list of best places to work in America for five years in a row. 
Last year, SRA devoted about 65 percent of its subcontracting 
dollars to small businesses, and we try to treat each with 
fairness and respect.
    We very much appreciate this Committee's support for worker 
training, which is essential to the economic health and 
vitality of our country. The increasing emphasis on information 
technology has produced fundamental changes in the skills and 
work performed by the average American. As the U.S. shifted 
from a domestic, industrial economy to a global information 
economy, our workforce has changed, too. Many workers are 
concerned about how global sourcing, sometimes referred to as 
``offshore outsourcing,'' will affect their jobs. A recent 
study by ITAA and Global Insight shows that offshore 
outsourcing causes the entire U.S. economy to perform at a 
higher level and actually produces a net gain in jobs and wages 
over time.
    Regardless of global sourcing, the American IT industry is 
still the world's leader, and that is not going to change 
anytime soon. However, the global marketplace for IT is 
becoming more competitive. Americans must recognize this and 
adapt to a changing economic environment through education, 
training, and retraining.
    Small businesses play a key role in ensuring our high-
technology strength. They provide technology innovation, 
entrepreneurial vitality, and entry points for many seeking IT 
jobs. Small businesses generally hire workers from local 
communities and so have a major stake in ensuring that these 
individuals are adequately educated and trained. Education and 
training of American workers are essential in this increasingly 
competitive world. U.S. high-tech leadership is significantly 
aided by the nation's robust education and training 
infrastructure, institutions of higher learning, community 
colleges, private technical colleges, e-learning certification 
programs. All of these make contributions.
    In view of this, ITAA has four basic recommendations or 
observations. First, industry and the federal government should 
strengthen partnerships and better identify local training 
needs. For example, local workforce investment boards are 
building partnerships involving employers, community colleges, 
and other community organizations. Community technology centers 
in economically disadvantaged communities give people hands-on 
access to technology. These centers should be considered for 
use as a possible model to disseminate entry-level training.
    Second, companies must be aware of training resources 
available through various workforce-development programs. 
Businesses, particularly small businesses, should participate 
more actively through state and local workforce boards and 
government one-stop centers so that the communication loop is 
closed between those who provide training and those who need 
appropriately trained employees.
    Third, the American Society for Training and Development, 
ASTD, is a leading association of workplace learning 
professionals. ASTD notes, in their state-of-the industry 
report, that the technology sector spends more on IT training 
than any other sector surveyed. IT companies have developed 
innovative approaches to the use of e-learning and delivering 
workforce training.
    Fourth, the government should revise its education and 
training policy to help build the competitive advantage of 
small businesses. Now, ITAA has a number of recommendations 
here ranging from the H1-B training fund to No Child Left 
Behind, but in the interest of time, I am going to just refer 
you to the written testimony and say, in conclusion, that 
America's future clearly depends on the availability of an 
educated and trained IT workforce. Government, industry, 
academia, and individual workers share a common purpose and 
must work together to produce a high-tech workforce that meets 
the demands of the new century. Thank you.
    [Mr. Volgenau's statement may be found in the appendix.]
    Mr. Bartlett. Thank you. Mr. Coffey?

STATEMENT OF MATTHEW B. COFFEY, NATIONAL TOOLING AND MACHINING 
                          ASSOCIATION

    Mr. Coffey. Thank you, Mr. Vice Chairman. Ladies and 
gentlemen, as the eighth witness on this single subject, my 
challenge is not a problem of knowing what to say; it is how to 
make it interesting to you. You have my written statement, and 
what I would like to do really, then, is just reflect on some 
of the fundamentals, as I see them.
    As you know, I represent the tool, die, precision 
machining, special machine-building industry in the United 
States, a trade association that has been around for 61 years, 
focused on education and training as its principal purpose. We 
have been dealing with the federal system of training and 
education for that entire period of time, and there is a 
certain point at which you say, when you look across the 
spectrum of federal programs and see 175 or 178 programs in 
this area, never has so much money and effort gone into produce 
so little result because we do not really see a major 
improvement in the quality of the applicants showing up at the 
door of the company.
    Human resources, of course, in any manufacturing company 
represent the competitive advantage, and in the present 
manufacturing environment, of course, the biggest single thing 
that you need to have is pricing power, and that is only 
available to you in this kind of a market where you have 
innovation, and innovation only comes from highly educated 
people thinking about the solution of customers' problems.
    We, at the same time, are experiencing a tremendous demand 
for continuing education, for continual learning on the part of 
the incumbent workforce while most federal programs are focused 
on entry level or focused on creating new entrants into the 
industry as opposed to upgrading the skills of those presently 
in the industry.
    Now, small, high-tech companies carry a heavy training 
expense burden. There is no question about it, and they have 
been doing it for years. Their competitors around the world do 
not have that same burden. They wind up having educational 
systems that make skills training mandatory from kindergarten 
through college and do not give students the option of one 
track or the other. I think, fundamentally, in education 
policy, we made a mistake when we divided those two, and in 
dividing them, we created a problem which we are living with at 
this point in time.
    The federal government, until 1993, when it got into the 
block grant programs, supported industry-specific training, but 
once it went into block grant programs, sent the money to the 
states under formulas, the states wound up using that training 
money to attract foreign investment instead of training 
incumbent workforce or training people at the entry level.
    So we have got a system that has not worked too well and 
that is designed for academic achievement, not mechanical 
skill, and as a result, as you heard earlier, more than 50 
percent of applicants show up deficient in one way or the 
other, not knowing math, not knowing science, not knowing some 
of the skills that we need in our particular manufacturing 
industry. And the one truth that I think most people will come 
to is that technology is only as good as the user. You can have 
a very sophisticated computer sitting in front of you or a very 
sophisticated machine tool. If you do not know how to use it, 
then, you have wasted your money on the technology. So software 
and hardware technology are changing all the time, and workers 
need to be changing with them, need to be learning, need to be 
upgrading their skills.
    I really think it is time to change the federal approach, 
and I think we are working very hard as an organization to try 
to do that. I think we do need to think about once again having 
national training programs that are industry specific, picking 
those industries where we see the opportunity for continuing 
innovation and development and having specific national 
programs that lead in that direction.
    We have been talking for years about tax credits for small- 
and medium-sized businesses to ensure that they will invest in 
training. We have been unable to get very much support for that 
at any level of government here at all, but it is a real 
necessity.
    Third, I think we need to support changing the training 
infrastructure. We need to use the technology available to us 
to deliver material to people where they are, when they need 
it, what they need. That says that we need to use distance 
learning, we need to use it effectively, and we need to break 
away from the patterns of the old system, the old structure.
    And, finally, I think we need to have better federal 
program coordination. We have all of these programs. We have no 
one coordinating the efforts and the activities, and whether 
you are talking about the DOL or the DOC or the DOE or the TAA 
program or the MEP program or any of the programs that were 
talked about earlier, they are all little, narrow smokestacks 
that do not work together, that do not effectively deliver a 
product to the manufacturing company, and that is the great 
frustration.
    So I think we have a lot of work cut out for us. I 
appreciate the interest of the Committee in this subject. It is 
a subject I have been working on for 25 years of my career and 
one in which I would hope that we can start a process that does 
start to solve some of the problems that we face in 
manufacturing. Thank you.
    [Mr. Coffey's statement may be found in the appendix.]
    Mr. Bartlett. Thank you very much. Mr. Peers?

   STATEMENT OF RANDOLPH PEERS, BROOKLYN CHAMBER OF COMMERCE

    Mr. Peers. Good afternoon. My name is Randolph Peers, and I 
am the vice president for economic development at the Brooklyn 
Chamber of Commerce, and that is Brooklyn, New York. I want to 
thank the chairman, Congresswoman Velazquez, and the rest of 
the Committee for having me here testifying today.
    Just a little background on Brooklyn. Brooklyn is the most 
populous of New York City's five boroughs, with a population of 
two and a half million people and over 36,000 businesses. The 
majority of these businesses, some 67 percent, employ between 
one and four workers, making Brooklyn home to a true small 
business economy.
    In my testimony today, I would like to share with you the 
small business perspective as it relates to issues of 
education, training, and workforce development based on the 
Brooklyn chamber's seven years of direct involvement in 
providing workforce services to its membership.
    In May of 2004, the Brooklyn Chamber of Commerce released 
the results of a comprehensive, labor market review it 
conducted with support from the U.S. Chamber of Commerce's 
Center for Workforce Preparation. While I will not bore you 
with industry specifics about Brooklyn, I do want to touch upon 
the statistics with respect to recruitment and training by 
small businesses.
    Forty-two percent of Brooklyn businesses indicated a 
willingness to hire additional workers this year, up from 20 
percent that actually did hire last year. That is a good thing. 
Of those businesses that did hire additional workers in 2003, 
32 percent indicated that they had a significant problem 
recruiting skilled or professional employees. Of those 
organizations planning to hire, small businesses struggled the 
most with recruiting skilled and professional labor, including 
supervisory employees.
    While 82 percent of businesses overall indicated that they 
provide some sort of worker training, the majority, 66 percent, 
identified the training as informal and on the job. The number 
of small businesses indicating that they provide informal, on-
the-job training jumped to 82 percent.
    Brooklyn businesses were evenly split over the importance 
of a college degree, with 49 percent indicating that a degree 
was important or very important. Small businesses seemed to 
value the degree least, with only 38 percent indicating a 
degree was important.
    And, finally, only a small minority of businesses of all 
classifications turned to the publicly funded workforce-
development system for either recruitment or training 
assistance. Predictably, small businesses were least likely to 
utilize the system.
    The statistics contained in this labor market review give 
us a snapshot of a predominantly small business economy in 
transition. On the positive side, there were signs of emerging 
new sectors in the economy in finance, insurance, real estate, 
construction, and tourism. These jobs will require higher 
skills while offering more career-ladder opportunities for 
residents.
    By contrast, however, many of the existing businesses are 
experiencing several obstacles to recruitment and training, 
especially amongst the skilled professions. Additionally, a 
majority of these same businesses are small- and mid-sized 
companies, representing a myriad of obstacles that prevent them 
from taking advantage of the public workforce system and its 
resources.
    In many cases, an absence of a formal human resources 
department or a basic lack of capacity to deal with workforce 
issues represents the most significant challenge. Small 
businesses tend to focus more on immediate, bottom-line issues, 
not recognizing the impact of staffing, training, or employee-
retention issues and the effects that they can have over the 
long haul. In other cases, it was simply a lack of awareness 
that prevents businesses from taking advantage of the public 
workforce-development system.
    Lastly, many small businesses have ambivalence towards 
working with what they perceive as a government-run program 
that appears too bureaucratic or too social services oriented.
    Since 1998, the Brooklyn Chamber of Commerce has operated a 
successful staffing service for small business. This program, 
called Good Help, has been at the forefront of providing 
various workforce-development services to the small business 
community by acting as an intermediary between such companies 
and the public workforce system and acting as a partner in the 
public workforce system. For small businesses, the advantage in 
such a service can be many. For many businesses that lack a 
human resource capacity, the chamber can provide the expertise 
to fill the void.
    In addition, these businesses are already working with the 
chamber of commerce in other ways, and the comfort of working 
with an established relationship increases the likelihood that 
the smaller employer will see the benefit in such programs and, 
over time, will access other publicly funded, workforce-
development services.
    But while it is clear that business intermediaries can play 
an effective role in any workforce system, we must also 
acknowledge the need to create better synergy between economic 
development and workforce development. It is my belief that 
without greater integration, the success of any workforce-
development initiative, including training initiatives, will be 
limited.
    To a certain degree, through industry-specific training 
initiatives, many cities are beginning to create this 
coordination, but we must be mindful that such large-scale 
training initiatives tend to benefit larger businesses that 
bring many jobs to the table. It is also important to recognize 
that small businesses, even in similar industries, have 
differing needs as opposed to larger companies when it comes to 
worker training.
    Whereas larger companies may be looking for higher-tech 
training as a means to increase worker proficiency in a 
particular field or on a particular piece of machinery, small 
companies tend to have more elementary training needs. Adult 
basic education, English language skills, critical thinking 
abilities, and soft skills proficiency are more likely to be 
cited by a small business as a training need.
    We also would like to point out that small businesses are 
more likely to hire lesser-skilled workers because they cannot 
compete with larger businesses with respect to wages and 
benefits. Therefore, the need for incumbent worker training 
that leads to career-ladder opportunities geared towards basic 
skills is critical for the long-term success of both the 
employer and the employee.
    Also, smaller businesses in well-established industries 
need a more generic basket of services that includes basic 
business assistance not directly related to workforce 
development. Such services include help with financing issues, 
basic business planning, access to information on nonworkforce-
related incentive programs, marketing and promotion assistance, 
access to procurement opportunities, guidance on technology 
issues, and basic technical assistance related to compliance 
matters. It is through this type of basic development support 
that smaller companies become mid-sized companies and 
ultimately employ more workers. In these cases, the road to 
increased WIA outcomes is long and winding.
    On a system-wide level, more cities and states are 
examining ways to create better synergy between workforce 
development and economic development. In New York City, for 
example, last year, the Department of Employment was merged 
into the Department of Small Business Services. In Idaho, 
Governor Dirk Kempthorne recently announced the state's 
intention to merge its labor department and its department of 
commerce.
    In conclusion, government should play a powerful role in 
helping to foster greater integration between economic and 
workforce development beyond what is promoted through existing 
WIA legislation. Such integration will, in the long run, help 
not only large businesses, but will also empower smaller 
businesses to grow and become more competitive. In this 
process, small businesses will take advantage of workforce 
development and training services. Increased awareness and 
participation by small businesses in the workforce-development 
system will help to make the system more responsive to business 
needs and more in step with industry trends.
    Some suggestions for promoting a business-driven system 
that is more responsive to small businesses include: number 
one, encouraging policies that foster greater collaboration 
between business, education, workforce training providers, and 
the public workforce-development system; two, encourage 
policies that integrate workforce and economic development; 
three, create ways to promote and encourage the inclusion of 
intermediaries like chambers of commerce and trade associations 
in the marketing and delivery of workforce services as partners 
in the system; four, through WIA, mandate specific business 
services outcomes, not just job-seeker outcomes, in an effort 
to make the system more accountable; number five, expand 
opportunities and lift restrictions on incumbent worker 
training programs to allow for a wider range of training 
options; number six, allow WIA funds to be used for limited 
economic-development activities, create new tax incentives and 
wage-subsidy programs that promote new job creation as well as 
job retention during economic recessions; and, finally, support 
efforts to increase local labor market information designed to 
predict industry and business trends. Thank you.
    [Mr. Peers' statement may be found in the appendix.]
    Mr. Bartlett. Thank you very much. Mr. Caslin?

    STATEMENT OF MICHAEL J. CASLIN, NATIONAL FOUNDATION FOR 
                   TEACHING ENTREPRENEURSHIP

    Mr. Caslin. Thank you. The title of my presentation is 
``Where Will Our Next Generation of Entrepreneurs, Our Next 
Generation of National Wealth Creators and Manufacturers Come 
From: A Call to Action for the Development of an 
Entrepreneurial Culture for All Americans.''
    I have been CEO of NFTE, the National Foundation for 
Teaching Entrepreneurship, for 16 years. NFTE is a New York 
City-based, globally focused, entrepreneurship education 
foundation. The testimony I have submitted is 34 pages, which 
reflects our thinking over the past 16 years of working in the 
most impoverished communities in the world, with 
multigeneration, unemployed families, and how to improve their 
plight.
    I am touched by Chairman Manzullo's approach to getting to 
know the people who testify here today. I wanted to share with 
you my background. I am a grandson of a Gaelic-speaking, 
immigrant farmer who escaped poverty from Ireland, who came to 
the United States, and the one job he could get was as a mucker 
for the New York City police force stables. He died digging by 
hand the 34th Street tunnel of New York City.
    My grandmother and mother survived on widow's assistance 
and welfare and family support, and my mother worked throughout 
high school to support her mom and herself, and even at the 
young age of 75 years today, works every day.
    I am a son of a proud union steamfitter and photo engraver. 
I am a first-generation entrepreneur, a first-generation 
college graduate, with two sons currently enrolled in college, 
each of whom have their own business, and a teen daughter who 
is college bound, and she also has her own business. Growing 
up, when I went to school, it was be good, do good in school, 
and someone will give you a job. No one said you could create 
your own job. While I worked 17 jobs from the time I was nine, 
I did not know I was a micro-entrepreneur. I knew I had to work 
to earn money.
    My children and NFTE children know the difference between a 
job and creating a job and being an entrepreneur. For the last 
16 years, NFTE has championed entrepreneurship education for 
America's low-income teens and young adults, especially for 
African-American and Latino youth. We have seen firsthand in 
programs in Brooklyn, New York City, Baltimore, Chicago, 
Arizona, New Mexico, First Nations, Toledo, Ohio, tremendous 
entrepreneurial potential. The issue is not only to attract 
bright and young people to this economy that is changing but 
also to unleash the talent of many young people who are turned 
off to life right now.
    If you go into many schools across the country, and you 
mention IT opportunity, you will have blank stares. Very few of 
them are aware of what ``IT'' means, and very few of them are 
enabled to pursue opportunity in the IT field in any way, 
shape, or form. We have found that over 60 to 70 percent of our 
students have never been inside a bank, so their knowledge of 
financial literacy and formal banking processes is very 
limited. Eighty percent of our students who form their own 
businesses are first-generation entrepreneurs, and I ask the 
Committee to consider that the motivation, why are we engaged, 
why we should learn this, is something that must be looked at 
in addition to the skills that are needed.
    We have seen all across the world the demand for the NFTE 
program, and that demand is really in the form of American 
business English and American entrepreneurship as a second 
language. There is a tremendous motivation to understand the 
code and the culture of entrepreneurship.
    As a lecturer at Harvard Business School and Stanford 
Graduate School of Business, Dartmouth--School, Duke, and an 
adjunct professor at Manhattanville College and also Babson on 
entrepreneurship and philanthropy, I can tell you firsthand 
that the code of wealth creation is not getting out. The 
understanding of how to participate in this economy is not 
getting out.
    We have seen, over time, young people, ages 11 to 18, 
become more economically productive members by learning the 
entrepreneurial process. Our strategy is to partner with 
schools, universities, and unleash experiential curricula, 
train and support youth workers.
    N.F.T.E. started as a `dropout`-prevention program, and we 
are now positioned as a turn-on program in school districts 
across the country, as well as in partnership with a number of 
community-based organizations, and it is our opinion that 
ownership and ownership attitude and ownership perspective is 
also one of the most ultimate technologies that could be 
promoted.
    The state of being literate in entrepreneurship really 
brings with it a joy and a value and a creativity and 
understanding of the wealth-creation process. Young people can 
begin to see how they fit in the macro and micro-economic 
production structure, the value chain, where they can 
contribute, and how they can help the nation. We can and must 
promote this awareness for all Americans, especially our youth, 
especially those living in poverty today.
    I am honored to represent NFTE today because this is the 
month where we will have graduated our one-hundred-thousandth 
young entrepreneur. It is a very special time for us. We 
started, again, in a single site in Fort Apache in the south 
Bronx as a dropout-prevention program.
    How did we do it? We did it with the private sector help. 
We have had a coalition of over 500 private sector sponsors, 
including Goldman Sachs and Microsoft. Microsoft helped NFTE 
create the first entrepreneurship learning system in the world 
on the Internet for teens and young adults. The Shelby Davis 
Foundation, NASDAQ, the Sandberg Foundation, Weinberg and 
Atlantic Philanthropies. Atlantic Philanthropies' Charles 
Feehey, the founder of Duty Free Shops, has taken an idea, 
created $3 billion in value, and is now giving it back to help 
disadvantaged youth in Ireland, the U.S., and South Africa.
    In addition, the U.S. SBA, the U.S. Department of 
Education, and cabinet-level members--Secretary Evans, 
Secretary Paige, and Secretary Chao--have all been to see NFTE 
in action.
    One of our leverages is to use university partners. We 
partner with Babson College, Carnegie Mellon, Georgetown, 
Northwestern, Stanford, Yale, and Columbia. We do that in order 
to get their code of wealth creation. We have identified, in 
working with them, 1,400 key concepts, behaviors, and practices 
of entrepreneurship that most adults and most young people are 
never exposed to.
    Our mission as a charity is to bring that code of the 
businesshood, the code of wealth creation, out so that young 
people can get turned on. We are experiencing this not only in 
the United States, where we have teachers now certified in 46 
states, but we are also active in the U.K., Holland, Belgium, 
Germany, and Ireland, India, Argentina, countries in Africa, 
Latin America, and China. It seems that globally 
entrepreneurship is one of the fastest-growing languages in 
demand.
    Our long-term objective is to enable each low-income 
American worker and first-generation business owner to be 
sparked with the powerful knowledge of entrepreneurship and to 
help ignite what Policy Analyst Mike Novak refers to as ``the 
fire of invention,'' get people turned on.
    We have hope here at NFTE. We see dropouts every day. We 
know that they are heading for a state of despair, not to a 
career. Why are they giving up the American dream? We spend 
many, many hours with them trying to understand that. 
Oftentimes, it is because no one is showing them how to dream 
it and how to achieve it, and many do not believe it exists. 
Even within miles of this hearing room, we have programs in 
Anacostia High School where many young people just do not 
believe the American dream exists for them.
    What can we do? Well, we have to work together through more 
effective public policy, more innovative education curriculum, 
higher demands of our citizens. We have hope because we have 
conducted seven major research evaluations on the impact of 
teaching entrepreneurship to young people. We work with 
Harvard, Brandeis, Columbia, and Babson College Center for 
Entrepreneurship. We have been able to show that occupational 
aspirations have increased because of viewing the world as an 
entrepreneur. We have been able to show that independent 
reading, self-motivated reading, occurs once a student gets 
turned on to the possibilities of entrepreneurship. We have 
also been able to show that Latino youth become more engaged 
and stay more engaged in school as they learn how to not only 
earn money for their families as well as see the value of 
school and why they are there.
    We had a comment from Dr. Andrew Hahn of Brandeis 
University: ``NFTE succeeds in teaching the skills and 
knowledge that are important to helping prepare young Americans 
for careers in business ownership.'' We have been able to prove 
the entrepreneurship knowledge increases by 20 times. Actual 
business activity rates increase by 30 times the amount, and in 
our conversations today, we are able to make sure that our 
young people understand that there are four types of business 
in the economy today: wholesale, retail, service, and 
manufacturing. Being able to understand just that one element 
and how you can fit and how you can flow between those four 
areas is mission critical.
    While we have grown from a single school in the south Bronx 
near Yankee Stadium to truly a global movement, we also know 
that to be competitive in our world economy in the future, we 
must create it today over the next decade. Manufacturing is a 
key part, and young people can pursue careers as entrepreneurs 
in all types of businesses.
    It is our founding premise as a nation that the essence of 
a democratic capitalistic society lies squarely on the 
shoulders of each generation of productive, responsible, and 
business-competent Americans. We can never take this for 
granted. We can work together. We can create a greater strength 
and a greater competitive position for our country, and we will 
see it in the face of our children. Greatness can exist again 
in many cities where it is fading. We look forward to working 
with the members of Congress here to assure that, and we are 
ready to stand with you. Thank you very much.
    [Mr. Caslin's statement may be found in the appendix.]
    Mr. Bartlett. Thank you and thank you all very much for 
your testimony. Ms. Velazquez?
    Ms. Velazquez. Thank you for your testimony. This has 
really been quite helpful to us, and we know that we need to do 
better in terms of putting a comprehensive approach in the area 
of training, retraining, and helping small businesses.
    Mr. Coffey, you mentioned that there are so many training 
programs throughout the federal government, and we all know 
that they exist in the books, but one thing is the number of 
140; the other thing is that some, more than one third, have 
either been flat funded or their funds have been cut. We have 
an example here of a pilot grant program in Connecticut that 
has been working beautifully, and yet at the end of your grant, 
that program is going to be zeroed out.
    So what we need to do is really if we want to continue to 
be competitive and create the meaningful jobs that we need, we 
have to identify those programs that really can help provide 
the tools and the training that will enable small businesses to 
be able not only to hire but to keep those workers.
    Another area is how can we help small businesses in the 
area of training and retaining those workers? We work together 
FREA, and I worked with Chairman Talent, who passed that 
legislation that will provide tax credits to small businesses 
for workers' retraining and training, and yet nothing happened. 
Has there been any discussion in terms of that legislation?
    Mr. Coffey. The latest discussions I have had have been 
with Senator Collins on the Senate side, who did attempt to put 
a tax credit type of provision into the Foreign Sales 
Corporation extraterritorial income bill, and she has now been 
joined by Senator Reed from Rhode Island as well in trying to 
put a bill together that would possibly be introduced in this 
session. Obviously, we have not introduced anything on this 
side, and we have gotten no response out of the administration 
to this idea.
    The nice thing about it is that what you are asking for is 
an incentive to get employers to engage in the expenditure 
necessary to train people. You are not asking for the federal 
government to pay for the whole thing; you are asking for them 
to give them a tax credit that is probably a tenth to a third 
of the cost of what they would actually expend in the training. 
I look forward, if we can start to build some momentum, to work 
with you again to try to get this legislation moving.
    Ms. Velazquez. The other thing is the Trade Adjustment 
Assistance program and the Manufacturing Extension program, 
both of which you mentioned in your testimony, that really are 
an example of programs that can get training and education to 
places where we need it the most, and they have proven to be 
effective, yet on this budget, Fiscal Year 2005, they are 
slated to be cut.
    So it seems to me that there is a disconnect between what 
is going on in this country in terms of our economy and small 
businesses as job creators and the tools that we need to 
provide, and there is a role for the federal government to play 
in helping small businesses.
    I would like to ask Mr. Peers and Mr. Caslin and Mr. Joyce, 
I know that in your program you provide English as a second 
language. In your experience, Mr. Caslin, do you feel that 
Latino youth, they are not willing, or they resist integrating, 
learning English as a second language?
    Mr. Caslin. No. I think that they want to see a way to pace 
themselves in to get connected, some type of process. We see 
the motivation there, and there is also an engagement strategy 
that once the students start to understand some of the 
concepts, the motivation to possibly read more increases 
without question.
    Ms. Velazquez. We just called New York City, the department 
of education, and we asked for the number of applicants that 
are on a waiting list, and they are telling us 90 percent of 
all applicants are on a waiting list in New York. So the 
problem is not that people do not want to learn the language; 
the problem is the services and resources that are available.
    Mr. Peers, you mentioned a variety of specific initiatives 
throughout the country in places as diverse as Idaho, Florida, 
and New York. What is the advantage of those local initiatives? 
By what means are they encouraged, and how are the lessons 
learned shared throughout the workforce-development community?
    Mr. Peers. I think that the biggest advantage is 
communication. Quite often, economic-development initiatives 
are going on over here, workforce initiatives are going on 
here, and as many of my colleagues here on the panel have 
already said, you know, we need to refocus our training efforts 
and make sure that they correspond to industry trends and to 
jobs of the future. That cannot happen if the two worlds are 
not talking and coming together.
    So first off, it is communication, and then, secondly, I 
think, once that communication occurs, they start to realize 
that there are very similar goals, that you cannot have 
effective economic development without a good workforce, and 
you cannot have a good workforce without having the jobs 
available to meet those worker needs and to grow your economy. 
And then you start to see more and more the leveraging of 
resources in creative ways, in ways that allow a maximization 
of efforts on both fronts. So those are the two key benefits of 
bringing those two together.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Mr. Bartlett. Thank you. I was born in 1926, and so, 
through my life, I have seen a lot of technology changes. We 
still plowed the fields with horses when I was a little boy.
    Some feel that some of these technology improvements have 
had a dark side as well as a bright side. One of those is air 
conditioning. Many people would argue that our country really 
started downhill when they air conditioned Washington so that 
Congress could stay here through the summer. I think it was 
Will Rogers who noted that anytime the legislature is in 
session, the Republic is at risk, and I think that we had a 
kinder, gentler, less-intrusive government before we had air 
conditioning, and we could stay here, focused on mischief 
through all of the hot summer.
    A second technology improvement which I think, arguably, 
has had some very negative effects is television. I note that 
the more people watch television, the lower our SAT scores were 
in our schools. So through all of those years when television 
was becoming more and more important in the home, why, the SAT 
scores were dropping lower and lower in our schools.
    Our higher education institutions are a marvel of the world 
and the envy of the world, and to know that all you have to do 
is to go there to see who the students are, and most of them 
are not students from this country because students from all 
over the world come there.
    A little bit ago, there was a survey done of the graduates 
of our secondary schools in 21 countries, and we were thankful 
for Cypress and Sri Lanka because of the 21 countries they were 
the only two whose young people scored lower than our young 
people scored.
    All of you have been talking about education and training, 
and Mr. Lewis from the previous panel noted that if he was 
going to choose one word to denote the quality of the young 
people who came out of our K-through-12 system, it was 
atrocious in terms of their preparation in education. Clearly, 
how could we have, far and away, the best education system in 
the world in our graduate schools and one that is not far from 
the basement? Of all of the industrialized, civilized world, I 
think we rank at the bottom. How did we get there? Why are we 
doing such a tremendous job in our graduate schools and such a 
lousy job in our K-through-12? To what do you attribute that? 
Let us just go through the panel and tell me what you think. 
How did we get there, and what do we need to do to get out of 
the basement?
    Ms. Buehlmann. I think one of the distinctions that you 
have to make is you have a universal K-12 system, and if you 
are going to make it relevant to students, it is getting back 
to understanding why they are there, the context for their 
learning, what relevance it has to what they are going to do 
next, and seeing a path for them to be able to get there.
    I think this is also true for our teachers. I think we have 
to create a system where people understand that the skills that 
are needed to go into the workplace or into higher education 
are very similar and that we should get away from the notion of 
a lockstep education system and instead create significant on 
ramps and off ramps so that individuals can participate in 
education, understand the relevance of it, apply it, and be 
able to use it to advance themselves, both in post-secondary 
education and in the workplace. We also need to do the same in 
terms of our college students when many of them are graduating 
from college and going back to community colleges in order to 
get skills that are relevant to the workplace. We have to 
better understand that the skills of the workplace, in fact, 
are many times more difficult and more complex than our going 
to our institutions of post-secondary education.
    And, finally, I would suggest that we encourage people to 
learn throughout their lives, understand that they can get 
certificates and advance through those certificates, accumulate 
those certificates towards degrees, if they choose to, but that 
it is not necessarily a lockstep situation, and that parents 
need to understand that going into the workplace and being able 
to go back into education has as much relevance as continuing 
on and getting through it in one fell swoop.
    So I would say it is relevance, and it is connection to the 
path that we are pursuing.
    Mr. Bartlett. I think most of our people understand the 
need for lifetime education because the technology is changing 
so rapidly. But we have graduated, I think, more than a million 
people from our high schools who, quite literally, could not 
read their diploma. Shame on a society that permits that to 
happen. I think you were addressing that in your lockstep, that 
you cannot just------.
    Ms. Buehlmann. I think we also give up. There are many 
people who believe that if a child cannot read by the fourth 
grade, they are never going to be able to read, and we have 
programs now that indicate that in high school we have 
inventions we can use to teach literacy, to encourage students 
to see the relevance and be able to read again and connect with 
the world. If they are shut off at a very early age, and we 
give up on them, we are going to have a group of people that 
are not going to be encouraged to learn.
    Years ago, there was a book written called Pygmalion in the 
Classroom, and basically if we set our expectations for 
students not to achieve, they are not going to achieve. And so 
I think we have to turn ourselves around and understand that at 
every step of the way if we engage the student, we believe in 
them, we are their advocates, they will achieve, and I think we 
have lost that in terms of our schools today, and I think we 
need to regain that.
    I would also say that if you want to talk about some things 
that would encourage English as a second language and perhaps 
even adult basic education, to look at such tax incentives as 
Section 127, which is only allowable right now for college 
degree credit. Why not allow some of that to also be used for 
English-as-a-second-language training and adult basic education 
so we can expand the opportunities of those individuals that do 
not have those basic skills but need them to invest in the 
workplace?
    Mr. Bartlett. Bill Bennett, who was President Reagan's 
secretary of education, tells a very interesting story. After 
they decided that they were not going to be able to shut down 
what they thought was an unconstitutional federal Department of 
Education, they set about trying to determine what worked and 
what did not work in education, and they found two schools. I 
think they were both in Illinois. One of them spent twice as 
much money per child as the other one, but the poor school, the 
school that spent only half as much per child, year after year, 
had higher achievement scores on the tests.
    And so Bill Bennett went to visit these two high schools in 
Illinois to see what was going on there, why the school that 
had only half as much money for their kids every year scored 
higher on the achievement tests. And when he arrived at the 
school and met the principal, he said, How is it going? The 
principal said, We have got it tough here. We do not have much 
money. About all we can do is teach the three R's. And if you 
will think about what we do with additional money when we give 
it to our schools, almost always they commit it to something 
that competes with the three R's.
    The teachers do not want to teach any more hours in a day, 
parents do not want their kids going to school any more days in 
a year, and so when we give more money to education, think 
about what happens to the additional money you give. Very 
frequently, doesn't it support programs that compete with the 
three R's? I think that it was no accident that this school 
that had little money had kids that scored better because, as 
the principal said, About all we can do here is teach the three 
R's.
    In a former life, I was privileged to teach for 24 years. 
In this world, by the way, that is the closest you can come to 
immortality because you live on in your students, and I value 
those 24 years. And I noticed something that is more and more 
lacking in our schools today. I think where there is no 
discipline, there is no learning, and I think there is not 
substitute for an inspired and inspiring teacher. And for all 
of the years I taught, the most important person in the whole 
school system to me was the janitor. He had the school open, 
and it was warm, and he had some chalk on the chalkboard, and 
that is all I needed. The rest of administration, they could 
have been gone to some foreign country for a year's vacation; 
it would not have mattered to me.
    I think we need to get back to a real respect for 
education. If you are going to respect education, you have got 
to have discipline in the classroom. Where there is no 
discipline, I do not think there is any learning, and I have 
real trouble seeing discipline in many of our classrooms today.
    Mr. McCarthy?
    Mr. McCarthy. I think the key issue we are also missing is 
the sense of community, the sense of community between 
education and business. When you think of what happens with 
workforce investment boards, those that are successful, there 
is a direct tie to the skills that are being taught in the 
school to those being sought by employers.
    There seems to be the channelization of education and 
employment rather than at the K-through-12 level because the 
preparation is towards the next level of education, not 
necessarily towards the next level of education and other 
opportunities, whether they be trade and technical schools, 
careers immediately without any additional formal education.
    The community engagement and support, specifically the 
business community's support and its recognition by junior 
colleges, K-through-12 institutions, is going to be critical to 
reestablishing what I think will be the appropriate cause and 
effect associated with education. Absent that, we will continue 
along separate paths where, to your point, literally, the 
connection starts again at the graduate school, and by then, it 
is maybe too late at times.
    Mr. Bartlett. Don't you think that you get from your 
children and your society what you appreciate? I think our 
society is a long way from appreciating academic achievement.
    When I was younger, a good academic achiever was known as a 
``square,'' and he had trouble dating the pretty girls. Pretty 
girls now play dumb so that they can get a date, and the bright 
guys are known as ``geeks'' and ``nerds.'' Is that the current 
terminology for bright guys? And they have trouble dating 
pretty girls.
    Don't you think that we I have some better success in our 
schools if we told our society we really appreciate what you 
are doing, and if we invited academic achievers to the White 
House about as often as we invite athletic achievers there and 
appreciate them? I just think that we do not appreciate 
education in this country. We appreciate the results of 
education, the entrepreneur, the guy who is developing all of 
the new things, but he got there because he educated himself 
very frequently in spite of an education system which continues 
to turn out people that, in the words of Mr. Lewis, their 
preparation was atrocious, was the best word he could use.
    Mr. Joyce, was your grandfather's last name Bilco, or how 
did he get the Bilco name for the door?
    Mr. Joyce. His last name was Lyons, and his first company 
was Builders Iron Company, so he took the B-I from that and the 
L from the family name.
    Mr. Bartlett. Okay. That is how he got. For those of you 
who do not know the Bilco door, it is the standard, and if you 
are going to put an outside-access door to your basement in a 
house when you are building it,--in another life, I built homes 
for about a dozen years, too--so you are going to buy a Bilco 
door even though somebody else manufactured it. It was still a 
Bilco door because your name was the characteristic name for 
any door that served that function.
    What do we need to do so that the product of our K through 
12 comes somewhere near the product of our graduate schools, 
which is clearly the best in the world?
    Mr. Joyce. I have spent a lot of time in the classroom 
encouraging students to consider careers in manufacturing. Most 
are surprised that today's manufacturing environment is clean, 
it is high tech, it is interesting. People work in clusters and 
teams. They enjoy all of that. When they walk through our 
plant, it is not anything like they have imagined. And when we 
talk to eighth graders, as an example, about this Connecticut 
State Scholars program and encouraging them to enroll in a more 
rigorous curriculum so they can get the better job, they have 
more opportunities after high school, we asked them a simple 
question right up front: Where do you think, worldwide, the 
United States stands in terms of math and science achievement? 
And always the answer is one, two, or three in the world. Well, 
we are actually 18th and 19th, respectively, in the world, and 
they are shocked. How can that be?
    Mr. Bartlett. Who is number one in the world?
    Mr. Joyce. Five of the top six are Asian countries. I do 
not know which is the first, but five of the top six are 
Asians. One reason is that the culture in Asia regarding 
education is far different than ours. They mostly attend school 
six days a week, and it is another question I asked the 
students: Who is the student athlete here? Okay, Jim. How often 
do you practice your basketball? Well, every day, sir. Maybe 
not Sunday, but six days a week. I said, Okay. Well, that is 
how the students learn in Japan. They go to school six days a 
week.
    So you do not do that. You only go five days; sometimes you 
go four, and as every week passes, you fall behind a Japanese 
student, week after week after week. So what happens after four 
years of high school? Where do you think they are compared to 
us? They are number one. We are number 18. It stands to reason.
    So you need to practice more, and to get there, we need to 
challenge our students, we need to set our standards higher and 
our expectations higher, and there is no question in my mind 
that we can achieve those standards.
    Mr. Bartlett. You mentioned the Orient and their 
achievement. Several years ago, I was the commencement speaker 
at our two high schools in Garrett County,--there are only 
two--Southern High and Northern High, and Southern High had 200 
graduates, and there was only one minority, and that was an 
Indian girl, an Asian-Indian girl, and she was the 
valedictorian. So in the afternoon, I went up to Northern High, 
and there was only one minority student there, and that was 
little Chinese girl, and she was carrying around a little 
manilla folder. I said to my wife, I wonder can it be true that 
she is the valedictorian? And sure enough, she was the 
valedictorian. Now, there were two minority students, both 
oriental, out of 335 kids, and they were the two top achievers. 
I thought, gee, maybe there is a lesson there.
    Mr. Volgenau?
    Mr. Volgenau. My company for years has supported inner-city 
learning centers where poor kids can come after school lets out 
and receive both academic and ethical education, and we have 
found, through that program, that there are several things that 
make a difference. One is parental involvement. I am thinking 
of our work particularly with the Darrell Green Youth Life 
Foundation. Their parents have to be involved. They have a very 
high success rate with their kids, and their parents must be 
involved.
    The other is role models, and ITAA studies again and again 
have pointed out that particularly for women and minority 
members, they need role models in the area of information 
technology, and that makes a difference. As long as our role 
models from a society standpoint are rock stars and super 
athletes--I love athletics. I am still involved at my age in 
athletics. I have always loved athletics, but the NCAA 
announcement, they are proud to say, is 95 percent of our 
athletes are going pro in a profession other than sports, and 
that type of thing is important.
    There is one other point, and that is I have got a Ph.D. in 
computers and automation and engineering, and one thing that 
has surprised me again and again and again about information 
technology is it is never too late. Time and again, I have seen 
people who have been only high school graduates who have had 
the courage to get involved and just the perseverance and study 
information technology, and they have become very, very good at 
it, and I have seen many people who have graduated in the 
liberal arts and have adapted themselves to leadership roles in 
the area of information technology. So it is never too late.
    We talk about communications. One of the problems with IT 
is the lack of information or, correspondingly, the data glut. 
There are a lot of government programs underway,--somebody 
mentioned the smokestacks--but a lot of businesses just do not 
know about them. And so ITAA for years has worked on community 
partnerships which involve small businesses and community 
colleges and the local community to try to get the information 
out about these training programs that already are being 
funded. There may not be enough nationwide, but there are 
plenty of them, and there is plenty of infrastructure for 
training in the area of IT.
    One final point. We think of information technology as 
being a bunch of PCs on desktops. That is just a very small 
part of it. For each one of those types of computers that is 
made, there is a hundred other computers that are embedded 
within other machines to make them operate better.
    So when we talk about mechanics and fixing cars, for 
example, those folks, too, have to have some knowledge of what 
happens when a computer fails, when the software fails. Thank 
you.
    Mr. Bartlett. You mentioned the involvement of parents. 
Several years ago, I had the opportunity to visit with Steve 
Forbes a small, black school in Baltimore. They would not admit 
a child to the school until the family made a commitment to the 
child's education. I was the commencement speaker at a 
graduation. It was not a graduation; it was a celebration. The 
diploma was given to the family, and then the family, the 
caregiver, the family then gave the diploma to the graduate, 
recognizing the contribution that the family made.
    Another interesting thing about those graduates: Every one 
went on to college because the principal said that they were 
not ready to graduate until they had been accepted in at least 
three colleges and had a scholarship to at least one college, 
and they were not ready to graduate until they had reached 
that.
    So the involvement of the family is really, really very 
important, and you see that.
    Our district has the highest number of young people 
admitted to our military academies, and in almost every case, 
and these are really the best of the best because we have more 
than 10 times as many apply as who are accepted in these 
academies, and one year we had 33, so we have a great district, 
but almost invariably they come from a family that gives great 
family support, and so your emphasizing that and education is 
one of the keys, I think.
    Mr. Volgenau. I have just one comment. Please send them to 
the Naval Academy.
    Mr. Bartlett. We sent 17 that year to the Naval Academy.
    Mr. Volgenau. Thank you.
    Mr. Bartlett. It is in our district. It is in Maryland. I 
represent a district just 50 miles north of here, and, of 
course, our school is a Maryland school. That year, 17 out of 
33, just a bit over half of the kids, went. You nominate 10 for 
each slot. Ordinarily, you have one slot. That year we had two 
slots in the Naval Academy. We nominated 20, and they accepted 
17 that year, really quite a phenomenal record.
    My colleague from New Jersey, Rodney Frelinghuysen, did an 
op-ed piece saying that his district had the most young people 
admitted to our military academies. He had fewer than we, so I, 
with some confidence, can say that we probably have the most. 
But the involvement of the family, I noticed, just visiting 
those young people and their families and going to the awards. 
It is great to go to the awards where other kids are getting a 
$500 and a $1,000 scholarship, and I announce that they have 
been living with a star who is qualified for a $250,000 
scholarship. They always get the most applause--it is kind of 
fun--at that ceremony.
    Mr. Coffey?
    Mr. Coffey. Well, I would just go to your point about what 
made the four-year college and graduate curriculum work in the 
United States, and I think there are two significant federal 
policies that did that, the first being the Land Grant College 
Act during the Civil War, which basically formed a bridge 
between the agricultural industry in the United States and the 
educational system to create a system that built support for 
the small farm community in the United States and encouraged 
states to have major educational institutions, and I think that 
was the first major, significant, federal contribution to 
graduate education.
    The second major federal contribution, I think, was the GI 
Bill of Rights after World War II in which you basically opened 
higher education to a much broader potential audience than it 
ever would have had before. And I think, with those two acts, 
there was significant change in the educational system that 
encouraged the growth of a really first-class, excellent 
educational system at that level.
    We have heaped great praise on both of those acts for 
hundreds of years now, and they are held up, I think, as 
examples of where federal intervention did, in fact, change 
America rather dramatically. I do not feel we have had anything 
like that in elementary and secondary education.
    Mr. Bartlett. Some of the best courses I took at the 
University of Maryland were in the department of agriculture. 
It is a land-grant college, and my best endocrinology course 
was reproduction in poultry, so I am appreciative of the 
contribution of land-grant colleges.
    Before we get comments from our last two panel members, Ms. 
Velazquez has a couple of questions she would like to ask.
    Ms. Velazquez. No.
    Mr. Bartlett. Okay. After you. Okay. Mr. Peers?
    Mr. Peers. Yes. I want to hone in on the ability to connect 
young adults to what they are actually going to experience in 
the workplace. Each of my colleagues here has talked about 
that. So I would say is how do we increase opportunities for 
experiential learning, and how do we start that early enough so 
that students, young adults, get exposed to different careers 
and opportunities? Encourage co-op programs and so forth. 
Encourage opportunities to work part time and go to school part 
time even in high school. I was fortunate enough to start 
working at a very early age, and it exposed me to a lot of 
different opportunities.
    Another thing I would do--we try and get more and more 
businesses, at least in our broker role at the chamber, to come 
into the schools and to be part of what is happening. You know, 
you mentioned, Mr. Chairman, about teaching, and with all due 
respect, I submit you might have done this backwards, that 
someone of your experience and knowledge, after you have done 
all of these things that you have done, including served in 
Congress, would have a lot to offer now as a teacher.
    Mr. Bartlett. Well, I am only 78. I may go back.
    Mr. Peers. There you go. And I really believe that a lot of 
people go into education, and that is their only field. So 
teachers and guidance counselors are not exposed to what most 
students are going to face in the real world of work.
    So how do we bring people who have already experienced the 
world of work in many different capacities, in many different 
ways, and how do we bring them into the schools so that they 
could share this knowledge, share this wisdom, share this 
expertise in a way that exposes more and more of our young 
adults to what they are going to face? So I think we could look 
at that.
    And then, just lastly, I think we need to stop thinking it 
is an either/or, the either/or being you go on to graduate 
school or you do nothing. There are plenty of occupations that 
are not going to require advanced degrees. There are plenty of 
occupations that are going to require a very good, solid, 
vocational education, and to what degree do we concentrate on 
core competencies that are going to lend themselves to those 
types of occupations? If you want to be a mechanic, you do need 
such things as critical thinking skills, creative problem-
solving skills, and that needs to be part of your curriculum 
when you are working with these young adults, and you have to 
encourage them that there are other opportunities other than 
just going to college.
    Mr. Bartlett. I appreciate you mentioning these job 
opportunities. We are now having to import those skills because 
there are far too few people with these skills available in our 
country, and it is because, again, we do not appreciate that.
    I built homes for 12 years. At the end of the day, if I had 
done it right, it is going to be there a hundred years from 
now. Most of the laws we pass in Congress, I hope, are not here 
a hundred years from now. It is really a lot of satisfaction in 
those trades, and we just are not appreciating them and not 
incenting our young people to go into them.
    Mr. Caslin?
    Mr. Caslin. Thank you. A couple of things on universities. 
How do they measure quality? I have had a number of 
conversations with leaders across the country of universities, 
and they measure it in endowment dollar per student. That is 
one key measure, and what that means is resources to the 
student.
    M.F.T.E. works with a number of universities who have no 
bridge to the community, that even though they have billions of 
dollars in endowment and resources for their faculty and their 
students, the communities that surround them are in great need, 
and there is no bridge.
    In fact, I would like to quote one of our students who grew 
up in west Philadelphia, and because of the NFTE program and 
the University of Pennsylvania Wharton Business School, he, as 
a junior in high school, learned how to start his own business. 
He then became turned on to finance. He went to Morehouse 
College, majored in finance. He was recruited by Morgan 
Stanley, went to Morgan Stanley in New York, worked there. He 
was recruited by Goldman Sachs, moved to London, worked for 
Goldman Sachs, and then at the ripe old age of 26, moved back 
to Brooklyn in Clinton Hill and basically now employs 20 people 
in the largest supper club, soul food supper club, in Brooklyn. 
It is called the Five Spot Soul Food Takeout and Supper Club. 
And Malik Armstead said, `Knowledge is key; knowledge is 
power.`
    `I think you raised the issue, as did Daniel Webster years 
ago: Knowledge is the true sun of the universe, for on it life 
and power dance in every beam.`
    We have found, through Gallup polls, 80 percent of students 
in America want to learn how to be entrepreneurs, want to 
control their destiny, want to get in the marketplace, and very 
few have access to it. That is why NFTE started. We started 
because teachers could hardly get the resources they needed 
just to do their core, and we went out and raised $180,000 our 
first year and now have raised nearly $70 million from the 
private sector over 16 years to bring entrepreneurship literacy 
to young people to turn them on to life.
    We are in India because of job riots. Imagine in northern 
India where the education system is working, where you have 
10,000 young adults turning out with the equivalent of 1,500 on 
their SATs showing up for 300 or 400 jobs and people being 
killed in the stampede on a job riot. Two people from that 
community, Jaipur, came to NFTE. They had retired from the 
business world here in the States, and they said, We cannot sit 
by and retire, retirement in New Jersey, and see our homeland 
and a superior education system have this type of stress and 
conflict. Why can't we promote more entrepreneurship in 
northern India?
    N.F.T.E. is replicating in Germany, which has a very rigid, 
very strong math and science achievement because there are over 
200,000 20-year-olds who are unemployed and without a 
certificate.
    What we are seeing in many of the accomplished systems with 
high achievement, there is really no entrepreneurial thinking, 
there is no marketplace penetration and embrace, and even in 
the U.K., if you do not test well at the age of 10, you are put 
onto a track fairly to oblivion. We have seen that in South 
Africa in Tanzania where, again, education systems have certain 
criteria and certain filter systems at a very young age which 
do not give young people the chance to recover or even tap 
their potential.
    So there is a flexibility to the U.S. education system 
which gives late bloomers a chance, and I think that is 
positive. There is a rigidity in some of the more formal 
systems across the world. The British education system, de 
facto, influences 60 countries through the commonwealth. It is 
fascinating to see that. That is why we started in London to 
understand how this education system works and how we can bring 
entrepreneurship education, and we have seen that there is one 
department of education and labor that coordinates the whole 
country, the whole United Kingdom, and so our ability to 
promote an idea is actually more effective and efficient in 
that way, whereas in the United States, the ability to promote 
and develop NFTE over 16 years, we have had to navigate the 
U.S. federal departments, the state departments of education, 
and then the local districts' education, superintendents, 
school-based management with principals. So you have 16,000 
school districts that are starting to come to somewhat of the 
same page, but they are very, very, very decentralized.
    So it is an interesting struggle, and I think the biggest 
aspect goes back to what is the end game, and for NFTE, we see 
the end game as the number of productive and responsible, self-
governing people per capita in a community. The more you can 
build that up, the more you have a chance for a safe and 
prosperous and just community. The more those numbers decline, 
the more you have people imprisoned by the tyranny of the few.
    Mr. Bartlett. You mentioned entrepreneurship and its 
importance. We are one person out of 22 in the world in 
America, and we have a fourth of all of the good things in the 
world. We use a fourth of the world's energy. We represent a 
fourth of the world's economy, and I think that 
entrepreneurship has largely been responsible for that.
    I think the reason that entrepreneurship has flourished 
here is because of our enormous respect for the rights of the 
individual. Implicit in our Constitution and very explicit in 
the first 10 amendments, which is why our founding fathers in 
1791 felt compelled to make explicit what was clearly implicit 
in the Constitution. And as government gets bigger, and we have 
more of us, and we need more regulations, that respect for the 
rights of the individual is at risk, and I think that to the 
extent that that is at risk, our society is at risk.
    What you need to go along with that entrepreneurship, which 
we are fantastic at, is an education so that you can do 
something with that entrepreneurial spirit, and that is what we 
have been talking about in today's hearing, our failure, not in 
the graduate schools,--we are doing fantastic there--but at the 
lower levels to educate.
    Ms. Velazquez, and then I have one final question to ask 
before we thank you for your testimony.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Ms. Buehlmann, I want to go back to the Federal Workforce 
Development programs, and maybe you recall the question that 
was posed by Mr. Udall to Ms. DeRocco mentioning the study that 
was conducted by the Office of Advocacy, SBA Advocacy, that 
shows that small businesses really do not participate in those 
programs that are available for them. Why do you think that 
Federal Workforce Development programs have such a hard time 
getting small businesses to participate?
    Ms. Buehlmann. I believe we provided to each of you a copy 
of our ``Rising to the Challenge Survey,'' and the thing that 
we found most prevalent in terms of answering that question is 
lack of awareness. So one of the things we are trying to do 
through our work is really generate awareness through chambers 
across this country to the resources that are available in 
communities to help small- and medium-sized businesses with 
their workforce-development concerns, issues, and requirements. 
It is the number one issue that they raise consistently, is how 
do we create a workforce system that works so that we can 
participate and get the skilled and quality workers that we 
need?
    Ms. Velazquez. But given the fact that we do have some 
programs that some of them have been either zeroed out, flat 
funded, but there are some that still have been funded------.
    Ms. Buehlmann. We have found, over time, that there is 
greater awareness. It has gone from 5 percent to 40 percent in 
terms of the surveys that we have done. We have also found that 
those who use it, and that is about half of the 40 percent have 
used it with any regularity, are very satisfied with the 
services they receive. So I go back to, even the National 
Association of Manufacturers and Jobs to the Future, a Boston-
based firm that we coordinate with in one of our particular 
efforts--all of them found it is this issue of lack of 
awareness.
    Ms. Velazquez. Does that mean that the federal government, 
the Department of Labor and other agencies need to do a better 
job in terms of outreach?
    Ms. Buehlmann. From our perspective, that is very 
important, that there needs to be greater communication about 
the benefits of using the publicly funded workforce system and 
other resources in communities, that we need a better 
understanding and put a different face to those. Randy Peers 
mentioned, for example, that they view them as a social 
service. Another thing that came out in this survey is that 
more and more of them are viewing it as an economic-development 
concern and issue, and connecting it to economic development is 
really a way to better engage business.
    We also believe that if you put a business face to it, you 
create a communication mechanism by which you present the 
business case, which ultimately gets the workers they need but 
also gets the jobs that individuals need with family-sustaining 
wages, that it is a win-win for everybody in the community.
    So we believe that creating awareness, creating different 
kinds of outreach, putting the business case to it, which we 
can do, and talking about it is a way not only to hire 
individuals but to retain them, to advance them, and allow them 
to gain greater skills and connection to the workplace is 
really the way that we need to go.
    Ms. Velazquez. Did you share that survey with the 
Department of Labor?
    Ms. Buehlmann. Yes, and, in fact, part of what Ms. DeRocco 
was talking about funded this particular survey, in fact, 3,700 
small- and medium-sized businesses through 70 communities 
throughout the country.
    Ms. Velazquez. Thank you. Thank you, Mr. Chairman.
    Mr. Bartlett. Thank you. Rather than ask you to respond, I 
just want to make a couple of comments and ask if you might 
respond for the record because what I want to spend just a 
moment or two on is a conundrum that I have been concerned with 
for quite a while now. We have been losing our manufacturing 
jobs for a long while now, and we are moving to a service-based 
economy. We are still doing pretty well as far as quality of 
life is concerned, but if you push this to an absurdity, 
clearly, it cannot go on forever. If all we do is take in each 
other's laundry and cut each other's hair, obviously, that is 
not a prescription for a viable economy, is it?
    I understand that wealth is created in only three kinds of 
activities in our society, in any society. It is created by 
farming, it is created by mining, and it is created by 
manufacturing. We have been talking an awful lot today about 
IT, information technology, and that involves largely computers 
and moving little electrons around, and I note that you cannot 
eat them, you cannot wear them, you cannot ride on them. They 
will not keep the rain off your head. Clearly, IT is a support 
technology, and unless that IT is used for agriculture, for 
mining, or for manufacturing, ultimately it really is not 
creating wealth, is it?
    And I note that our trade deficit last year was $489 
billion. Our debt went up last year in this country $700 
billion. They will tell you the deficit was $500 billion, but 
the debt went up $700 billion, and I think that if the debt 
went up $700 billion, there was a $700 billion deficit. The 
other 200, by the way, is the monies we take from the trust 
fund, and we pretend that they are not debt. It is the most 
significant we owe because we owe it to our kids and our grand 
kids, and shame on us because that debt is getting bigger and 
bigger, and we are living quite well today at their expense 
because when it comes their turn, not only will they have to 
run government on current revenues; they will have to pay back 
all of the money that we have borrowed from their generation.
    I promised, 12 years ago, when I was running that I would 
conduct myself so my kids and grand kids would not come and 
spit on my grave because of what I had done to their country. I 
am still trying to keep that pledge.
    Well, if it is true that wealth only comes from farming and 
from manufacturing and from mining, how did we get from where 
we are, with this enormous obsession with moving electrons 
around, to a society which is really producing wealth? I would 
like you to comment on it, if you would, for the record because 
we have imposed on your time more than we really should have.
    I want to thank you all very much for a very interesting 
session, and we stand in adjournment.
    [Whereupon, at 5:00 p.m., the Committee was adjourned.]


    


                                 
