[Senate Hearing 110-372]
[From the U.S. Government Publishing Office]
S. Hrg. 110-372
STRENGTHENING AMERICAN COMPETITIVENESS IN THE 21ST CENTURY
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HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS,
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
ON
EXAMINING STRENGTHENING AMERICAN COMPETITIVENESS FOR THE 21ST CENTURY
__________
MARCH 7, 2007
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
senate
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
J. Michael Myers, Staff Director and Chief Counsel
Katherine Brunett McGuire, Minority Staff Director
(ii)
C O N T E N T S
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STATEMENTS
WEDNESDAY, MARCH 7, 2007
Page
Kennedy, Hon. Edward M., Chairman, Committee on Health,
Education, Labor, and Pensions, opening statement.............. 1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming,
opening statement.............................................. 2
Prepared statement........................................... 3
Murray, Hon. Patty, a U.S. Senator from the State of Washington.. 6
Gates, Bill, Chairman, Microsoft Corporation, Seattle, Washington 7
Prepared statement........................................... 11
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Pascrell, Jr. Hon. Bill, a U.S. Representative from the State
of New Jersey.............................................. 49
American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO).................................... 50
(iii)
STRENGTHENING AMERICAN COMPETITIVENESS IN THE 21ST CENTURY
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WEDNESDAY, MARCH 7, 2007
U.S. Senate
Committee on Health, Education, Labor, and Pensions
Washington, DC.
The committee met, pursuant to notice, at 9:34 a.m. in Room
SH-216, Hart Senate Office Building, Hon. Edward Kennedy,
chairman of the committee, presiding.
Present: Senators Kennedy [presiding], Dodd, Murray, Reed,
Clinton, Sanders, Brown, Enzi, Gregg, Alexander, Burr, Isakson,
Hatch, Roberts, and Allard.
Opening Statement of Senator Kennedy
The Chairman. We'll come to order.
I'll make a very brief opening statement, and then I'll
recognize our friend, our colleague, our committee member,
Senator Murray, who will have the honor of presenting our very
distinguished witness here this morning.
I'm going to ask my colleague and friend, Senator Enzi, if
he'd say a word of greeting, as well.
So, I welcome you here this morning, Mr. Gates. The
committee is very pleased to have the opportunity to talk to
you about the critical issues of America's competitiveness.
We're eager to hear the insights you've gained through your
leadership of the Microsoft Corporation and through your
unparalleled philanthropic endeavors which have shed a light on
the critical issues facing our families, the Nation, and the
world.
You and your family are powerful advocates for the
principle that all people need and deserve the opportunity to
achieve their full potential, regardless of race, ethnic
background, or financial means. In fact, today equal
opportunity is more than a guiding principle for our Nation,
it's essential to our strength and our prosperity, and we must
make use of the skills and talents of every American to compete
and win in today's competitive global economy. We should face
the future not by lowering American wages, but by increasing
American skills, to equip our citizens to compete and win in
the global economy.
We've met these challenges before. We did it after the
second World War, with the GI bill. And the GI bill equipped
the Greatest Generation to build a new peacetime economy. We
did it after the Sputnik launch, when we trained a new
generation of Americans in math and science. And we inspired
millions more to greater and greater innovation when President
Kennedy challenged us to send a man to the Moon. We can reach
great heights of innovation yet again.
To meet these challenges, we must renew our commitment to
education and job training, give our citizens the skill to spur
innovation and progress, the No Child Left Behind Act, the
Higher Education Act, the America Competes Act, the Workforce
Investment Act, the Head Start Act. All of these matters are
before this committee this year, and each one is vital to the
innovation and competitiveness of our Nation.
To be globally competitive, we need to provide a world-
class education to each and every student, and we must close
the significant and shameful achievement gap that exists in
this country. We must also do more to improve math and science
instruction in our public schools, to encourage more young
people to become scientists and engineers.
We passed the No Child Left Behind Act to tackle these
issues. We're making progress, but we need to make changes to
the law and make it work better for our schools and our
children. And we need to provide the resources to support the
reform.
Improving education is essential, but it alone isn't
enough. We must strengthen our commitment to help workers
adjust to the new economy, particularly those who lost their
jobs due to trade and those who need training in the 21st-
century skills. We must encourage innovation to support
industries that will create the new jobs in the future.
When it comes to innovation, we must look beyond the
horizon and chart the future. Mr. Gates, you have done that
throughout your career. We're delighted to have you before our
committee, and look forward to your testimony.
I'd ask Senator Enzi, if he would, to say a word, we'll go
to Patty Murray, and then move on to your thoughts.
Opening Statement of Senator Enzi
Senator Enzi. Mr. Chairman, I thank you for holding this
hearing. I think it's at a particularly critical time, and Mr.
Gates is an outstanding person to present.
This year marks 50 years since Sputnik went up, and that's
the last time that we really had a huge turmoil in this
country, worrying about engineering. It had a drastic effect on
our system of education. It inspired people to be the best.
Since that time, of course, computers came along and
stimulated us. I remember some of the early Radio Shack models
that kids got to play with, and adults admired. And people were
stimulated to write programs. Now, programs have gone to a
whole different level from that time. And, in fact, I think one
of the things kind of stymying kids is how far it has gone. How
can they possibly do something as complicated as what's out
there already? Of course, the game industry, kind of, came
along, and that stimulated a few more to do some different
things in the computer area. But somehow we've got to have the
kind of a revolution that got the minds working in that new
area of innovation. We've got to have more kids that are
entrepreneurs and risk-takers.
And so, I admire you for what you've done, and you're a
great symbol for the country and an inspiration to kids.
Appreciate the effort that you're making through a lot of
different programs with your Foundation to make that emphasis.
Anything we can do to get some more risk-takers and
entrepreneurs out there will make a difference. And, of course,
we will have to rely on people from other countries and hope
that they come here and become a part of the innovation that
later moves to other countries or that becomes old technology.
So, thank you. I would ask that my full statement be
included in the record.
The Chairman. All statements will be included in the
record.
[The prepared statement of Senator Enzi follows:]
Prepared Statement of Senator Enzi
Thank you, Senator Kennedy, for holding this hearing today.
Employers of all sizes know that a skilled workforce is
essential to being competitive in the global economy.
Our businesses must have the workers they will need to be
competitive. Strengthening America's competitiveness requires
that students and workers of all ages have the opportunity to
gain the knowledge and the skills they will need to be
successful throughout their lives, regardless of their
background. Education and training are integral to meeting this
goal.
A substantial portion of our workforce now finds itself in
direct competition for jobs with highly motivated and often
well-educated people from around the world. We can no longer
afford to ignore that over the past 30 years, one country after
another has surpassed us in the proportion of their entering
workforce that has the equivalent of a high school diploma. We
used to have the best-educated workforce in the world, but that
is no longer true.
We must re-build, strengthen and maintain our educational
pipeline, beginning in elementary school. We need to find ways
to encourage high school students to stay in school and prepare
for and enter high-skill fields such as math, science,
engineering, health, technology and critical foreign languages.
We must also strengthen the programs that encourage and enable
citizens of all ages to enroll in postsecondary education
institutions and obtain or improve knowledge and skills. The
decisions we make about education and workforce development
will have a dramatic impact on the economy and our society for
a long time to come.
The present situation is discouraging. Every day in the
United States, 7,000 students drop out of school. We must deal
with the situation head on--we cannot allow students to
``waste'' their senior year, and graduate unprepared to enter
postsecondary education and a workforce focused on skills and
knowledge. Unless high schools are able to graduate their
students at higher rates than the 68 to 70 percent they
currently do, more than 12 million students will drop out
during the course of the next decade. The result long term will
be a loss to the Nation of $3 trillion, and as you can imagine,
even more in terms of the quality of life for those dropouts.
To remain competitive in a global economy, we cannot afford
to lose people because they do not have the education and
training they need to be successful. Thirty years ago the
United States was proud to claim 30 percent of the world's
population of college students. Today that proportion has
fallen to 14 percent and is continuing to fall.
Demographics are responsible for some of this shift--keep
in mind that if India alone educates just one-third of its
population, it will have more educated people than the total
population of the United States. We have control over whether
we continue to let so many students fall through the cracks and
out of the education and training pipeline.
To be successful in the 21st century economy we need to
challenge our high school students more, increase high school
graduation rates, reduce remedial education at the college
level, increase student retention and completion rates for
students in college, reduce barriers to adult worker
participation in postsecondary education and training. Lifetime
education and training is no longer an option, it is a
necessity--for individuals, for employers and for the economy.
Innovation provides a way for individuals to create their
own jobs or jobs for others. That is one of the primary reasons
I began my annual free Inventors Conferences in Wyoming in
2004--to encourage and provide resources to individuals to
impact the economy with their ideas. Too often, young people in
Wyoming start thinking at too early an age that they will have
to leave the State to find a good job. I offered another
suggestion--create your own product--create your own job. That
kind of mindset will encourage creativity and begin to tap the
well of good ideas so many of our State's young people have to
share. We can attract businesses, but we can grow our own new
businesses too. Good ideas generate good jobs and that is
something that will keep our kids at home and attract new
businesses to our State.
I have had terrific role models, such as Dean Kamen, speak
at my conference. I am hosting the Inventors Conference again
in Wyoming this April. We need to encourage this kind of
activity because America no longer holds the sole patent on
innovation. Inspired by our example, countries such as China,
India and South Korea have invested heavily in education,
technology and research and development. Billions of new
competitors are challenging America's economic leadership. In
2005, foreign-owned companies were a majority of the top 10
recipients of patents awarded by the U.S. Patent and Trademark
Office.
In addition, we need to look at how we address immigration.
Many people are concerned about illegal immigration and the
impact legal immigration could have on their employment. Many
employers have a need for trained and educated employees and
are unable to fill these positions with domestic employees. The
companies are often faced with the choice of hiring foreign
workers or considering moving their operations overseas.
In the high-tech sector and across the Nation, I believe
employers must be a partner in ensuring that employees are in
the United States legally and holding the proper visas and work
permit. It is clear, however, that the current system is not
working. The complicated and overly burdensome process for
visas and permanent residency cards serves as a disincentive to
both the employer and the employee.
Initial efforts have been taken to address the problems
with the H-1B visa process and immigration in general but no
final action has been set. Congress has considered legislation
that specifically addresses foreign workers with masters or
higher degrees from accredited U.S. universities to return or
stay in the United States. I believe we should continue to work
on this issue in the context of larger immigration reform as
well in the context of our international competitiveness.
While we work to make our domestic workforce better trained
to fill high-tech jobs, we must ensure that our high-tech
companies remain in the United States.
We have our work cut out for us to meet the challenge of
ensuring that America expands its competitive edge. We need a
plan. We need to ensure opportunities are available to all
Americans, because our future depends on widely available and
extensive knowledge and training and a commitment to
excellence. Strong partnerships and alignment among K-12
schools, institutions of higher education, business and
government will help us meet the needs.
In the HELP Committee, we are using this opportunity to
shape policy and strengthen the education and training
pipeline. Through the reauthorization of Head Start, No Child
Left Behind, the Higher Education Act and the Workforce
Investment Act (WIA) we can make sure that every individual has
access to a lifetime of education and training opportunities
that provide the knowledge and skills they need to be
successful and that our employers need to remain competitive.
As important as education is to the knowledge and skills of
our workforce, I want to emphasize the need to reauthorize the
Workforce Investment Act. It strengthens connections with
economic development, links training to the skill needs of real
jobs, and supports greater business engagement.
In a global economy where innovation and technology have
created an increasing demand for skilled workers, access to
training that prepares workers to meet these challenges is
essential. The skills needed to keep current with the
requirements of the 21st century workplace are changing at an
ever increasing pace. Workforce development is not only hiring
the right worker, but knowing how to help them keep current
with escalating skill requirements and advances in their
occupations. By helping low-wage workers advance in their jobs,
entry level jobs will open up and more opportunities will be
created. Our efforts in reauthorizing the Workforce Investment
Act must ensure that it achieves this goal and is relevant to
both employers and workers.
I look forward to hearing the contribution of our witness
to this vital conversation.
The Chairman. Mr. Gates, if Senator Murray doesn't give you
a good introduction, we'll make sure we find someone up here
that will.
[Laughter.]
The Chairman. But we're confident that she will. As you
well know, she's been one of the great voices in this
institution and in our country, in terms of supporting
innovativeness and creativity and competitiveness.
Senator Murray, we're so glad to have you----
Senator Murray. Thank you, Chairman Kennedy.
The Chairman [continuing]. As well as our veterans, I might
add.
Thank you.
Statement of Senator Murray
Senator Murray. Thank you.
Chairman Kennedy, Ranking Member Enzi, members of the
committee, when it comes to making our country more
competitive, improving our schools, and preparing our
workforce, we face real challenges today. Those challenges
require innovative solutions, and that's why I'm so pleased to
welcome to the Senate one of the most innovative thinkers of
our time, Bill Gates.
We all know about his work launching Microsoft, back in
1975, and turning it into one of America's most successful
companies. Microsoft software is used here in the Senate, on
most of the PCs around the world, and increasingly on servers,
mobile phones, and broadband networks.
We're also familiar with his visionary work through the
Bill and Melinda Gates Foundation, which has quickly become a
global leader in the philanthropy, protecting and saving
millions of lives around the world.
From my work with him over the years, I've seen firsthand
his commitment to making our country more competitive. Over the
years, he's tackled these issues from several perspectives. As
the leader of a high-tech company, he's familiar with the
challenges of finding highly skilled workers. He's supported
educational programs and training partnerships with schools and
the private sector. And he understands how technology can help
move us toward a system of lifelong learning that reflects the
reality of tomorrow's economy.
As the head of a major foundation, he's invested in
education and workforce solutions in the United States and
around the world. His analysis of our high school system has
been provocative and thought-provoking. As someone who helped
develop the tools of our knowledge economy, he's working to
make sure that all Americans can benefit from the opportunities
that technologies offer.
Personally, I can tell you he's done so much to support the
economy and workers in my home State, where Microsoft and Gates
Foundation are pillars of our community.
I am very pleased that he's agreed to share his insights
with us here in the Senate today. And I really want to thank
him for his leadership, vision, and eagerness to help us
address the challenges that are facing our country.
Thank you very much.
And welcome to the Senate, Bill.
The Chairman. Mr. Gates, we have a rule about having our
testimony from our witnesses, usually 24 hours. You have broken
that rule. You got yours here a week ago.
[Laughter.]
The Chairman. And we thank you. It gives us an idea, again,
of efficiency, and we thank you very much for--it's a very
extensive testimony, let me add----
Mr. Gates. Thank you.
The Chairman [continuing]. And valuable.
Thank you.
Mr. Gates. Should I go ahead?
The Chairman. You may proceed.
Mr. Gates. Thank you.
STATEMENT OF BILL GATES, CHAIRMAN, MICROSOFT CORPORATION,
SEATTLE, WASHINGTON
Mr. Gates. Well, thank you, Senator Murray, for that kind
introduction and for your leadership on education and so many
other issues that are important to Washington State and the
Nation.
Chairman Kennedy, Ranking Member Enzi, members of the
committee, I'm Bill Gates. I'm the chairman of Microsoft
Corporation. I'm also a co-chair with my wife, Melinda, of the
Bill and Melinda Gates Foundation. It's an honor for me to
appear before you today and to share my thoughts on the future
of American competitiveness.
Any discussion of competitiveness in the 21st century must
begin by recognizing the central role that technology and
innovation play in today's economy. The United States has a
great deal to be proud of in this respect. Many of the most
important advances in computing, healthcare,
telecommunications, manufacturing, and many other fields have
originated here in the United States. Yet, when I reflect on
the state of American competitiveness, my feeling of pride is
mixed with deep anxiety. Too often, it seems, we're content to
live off the investments previous generations made and that
we're failing to live up to our obligation to make the
investments needed to make sure the United States remains
competitive in the future. We know we must change course, but
we have yet to take the necessary steps.
In my view, our economic future is in peril unless we take
three important steps.
First, we must equip America's students and workers with
the knowledge and skills they need to succeed in today's
economy.
Second, we need to reform our immigration policies for
high-skilled workers so that we can be sure our workforce
includes the world's most talented people.
And third, we need to provide a foundation for future
innovation by investing in new ideas, and providing the
framework for capturing their value.
Today, I would like to address these three priorities.
First and foremost, the United States cannot maintain its
economic leadership unless our workforce consists of people who
have the knowledge and skills needed to drive innovation. The
problem starts in our schools with the great failure taking
place in our high schools.
Consider the following facts. The United States has one of
the lowest high school graduation rates in the industrialized
world. Three out of ten ninth-graders do not graduate on time.
Nearly half of all African-American and Hispanic ninth-graders
do not graduate within 4 years. Of those who do graduate and
continue on to college, nearly half have to take remedial
courses on material they should have learned in high school.
Unless we transform the American high school, we'll limit
the economic opportunity for millions of Americans. As a
Nation, we should start with the goal of every child in the
United States graduating from high school. To achieve this
goal, we need to adopt more rigorous standards and set clear
expectations. We must collect data that will enable students,
parents, and teachers to improve performance. And if we are
going to demand more from our students, we'll need to expect
more from teachers. In turn, we must provide teachers the
support they need, and we must be willing to reward those who
excel. The Teacher Incentive Fund is an important first step.
Making these changes will be hard, but positive change is
achievable. I know this through my work with the Gates
Foundation and our education partnerships throughout the
country, and through Microsoft's education initiatives,
including in our Partners in Learning Program. I mentioned
several examples of progress in my written testimony, but let
me mention three, in particular.
The Philadelphia School District joined with Microsoft to
create a 750-student School of the Future, which opened last
September. This public high school is rooted in the vision of
an empowered community where education is continuous, relevant,
adaptive, and incorporates best-in-class technology in every
area of learning.
Second, New York City has opened almost 200 new schools in
the last 5 years, with many replacing the city's most
underperforming schools. Our Foundation supports this effort
through advocacy and grantmaking. The first set of new schools
achieved an average 79-percent graduation rate, compared to
graduate rates ranging from 31 to 51 percent at the schools
they replaced.
Early-college high schools are perhaps the most innovative
initiative underway nationally. The approach is to recruit low-
performing students to attend high schools that require
enrollment in college courses. The results are astounding.
Currently, there are more than 125 early-college high schools
in operation around the country. So far, more than 95 percent
of the first class of ninth-graders of the original three early
high schools have graduated, and over 80 percent of students
have been accepted into 4-year colleges.
Such pockets of success are exciting, but they're just the
start. Transforming our education system will take political
leadership, broad public commitment, and hard work. This
committee has done very important work in this regard. And, as
you consider legislation during this Congress, there are
opportunities to build on this work.
The challenges are great, but we cannot put them aside.
That is why our Foundation has joined with the Broad Foundation
to support the Strong American Schools Partnership. This is
intended to inspire American people to join an effort that
demands more from our leaders and educators on ensuring that
our children benefit from good teachers, high expectations, and
challenging coursework.
A specific area where we're failing is in math and science
education. In my written testimony, I detail concerns about the
alarming trends in elementary and secondary schools. We cannot
sustain an economy based on innovation unless we have citizens
well educated in math, science, and engineering. Our goal
should be to double the number of science, technology, and
mathematics graduates in the United States by 2015. This will
require both funding and innovative ideas. We must renew and
reinvigorate math and science curricula with engaging, relevant
content.
For high schools, we should aim to recruit 10,000 new
teachers and strengthen the skills of the existing teachers. To
expand enrollment in postsecondary math and science programs,
each year we should provide 25,000 new undergraduate
scholarships and 5,000 graduate scholarships.
America's young people must come to see science and math
degrees as key to opportunity. If we fail at this, we won't be
able to compete in the global economy.
Even as we need to improve our schools and universities, we
cannot lose sight of the need to upgrade the skills of people
already in our workforce. Federal, State, and local governments
and industry need to work together to prepare all of our
workers for the jobs required in the knowledge economy. In the
written testimony, I highlight some of Microsoft's work during
the past decade to provide IT skills training to United States
workers, such as our Unlimited Potential Program. We're working
with other companies, industry associations, and State agencies
to build a workforce alliance that will promote the digital
skills needed to strengthen U.S. competitiveness.
As a Nation, our goal should be to ensure that, by 2010,
every job-seeker in the U.S. workforce can access the education
and training they need to succeed in the knowledge economy.
The second area I want to--one I want to particularly
underscore today--is the need to attract top science and
engineering talent from around the globe to study, live, and
work in the United States. America's always done its best when
we bring the best minds to our shores. Scientists, like Albert
Einstein, were born abroad, but did great work here, because we
welcomed them. The contributions of such powerful intellects
has been vital to many of the great breakthroughs made here in
America.
Now we face a critical shortage of scientific talent, and
there's only one way to solve that crisis today. Open our doors
to highly talented scientists and engineers who want to live,
work, and pay taxes here. I cannot overstate the importance of
overhauling our high-skilled immigration system. We have to
welcome the great minds in this world, not shut them out of our
country.
Unfortunately, our immigration policies are driving away
the world's best and brightest, precisely when we need them the
most. The fact is that the terrible shortfall in the visa
supply for highly skilled scientists and engineers stems from
visa policies that have not been updated in more than 15 years.
We live in a different economy now, and it makes no sense to
tell well-trained, highly-skilled individuals, many of whom are
educated at our top universities, that they're not welcome
here.
I see the negative effect of these policies every day at
Microsoft. In my written testimony, I discuss some of the
shortfalls of the current system.
For 2007, the supply of H-1B visas ran out 4 years before
the fiscal year even began. For 2008, they will run out even
earlier, well before degree candidates graduate. So, for the
first time ever, we will not be able to seek H-1Bs for this
year's graduating students. The wait times for green cards
routinely reach 5 years, and are even longer for scientists and
engineers from India and China, key recruiting grounds for
skilled, technical professionals.
The question we must ask is, How do we create an
immigration system that supports the innovation that drives
American growth, economic opportunity, and prosperity? Congress
can answer that question by acting immediately in two
significant ways. First, we need to encourage the best students
from abroad to enroll in our colleges and universities, and to
remain here when they finish their studies. Today, we take
exactly the opposite approach.
Second, we should expedite the path into our workforce and
into permanent-resident status for highly-skilled workers.
These employees are vital to American competitiveness, and we
should encourage them to become permanent U.S. residents. They
can drive innovation and economic growth alongside America's
native-born talent.
Finally, maintaining American competitiveness requires that
we invest in research and reward innovation. Our Nation's
current economic leadership is a direct result of investments
that previous generations made in scientific research,
especially through public funding of projects in government and
university research laboratories.
American companies have capitalized on these innovations,
thanks to our world-class universities, innovative policies on
technology transfer, and pro-investment tax rules. These
policies have driven a surge in private-sector research and
development.
While private-sector research and development is important,
Federal research funding is vital. Unfortunately, while other
countries and regions, such as China and the European Union,
are increasing their public investment in R&D, Federal research
spending in the United States is not keeping pace. To address
this problem, I urge Congress to take action.
The Federal Government should increase funding for basic
scientific research. Recent expansion of the research budgets
at the Department of Energy and National Science Foundation is
commendable, but more must be done. We should also increase
funding for basic research by 10 percent annually for the next
7 years.
Second, Congress should increase and make permanent
private-sector tax credits for R&D. The United States ranks
17th among OECD nations in the tax treatment of R&D. Without a
renewed commitment to R&D tax credits, we may drive innovative
companies to locate their R&D operations outside the United
States.
We must also reward innovators. This means ensuring that
inventors can obtain intellectual property protection for their
innovations, and enforce those rights in the marketplace.
America is fortunate that our leaders recognize the
importance of intellectual property protection at home and
abroad. I know I join many other Americans in thanking this
Congress and this Administration for their tireless efforts to
promote such protection.
The challenges confronting Americans--America's
competitiveness and technological leadership are among the
greatest we have faced in our lifetime. I recognize that
conquering these challenges will not be easy, but I firmly
believe that, if we succeed, our efforts will pay rich
dividends for all Americans. We've had the amazing good fortune
to live through a period of incredible innovation and
prosperity. The question before us today is, Do we have the
will to ensure that the generation that follows will also enjoy
the benefits that have come with economic leadership? We must
not squander this opportunity to secure America's continued
competitiveness and prosperity.
Thank you, again, for this opportunity to testify. I
welcome your questions on these topics.
[The prepared statement of Mr. Gates follows:]
Prepared Statement of Bill Gates
Chairman Kennedy, Ranking Member Enzi, honorable members of the
committee, my name is Bill Gates and I am Chairman of Microsoft
Corporation. I am also a co-chair, with my wife Melinda, of the Bill &
Melinda Gates Foundation. It is an honor for me to appear before you
today to share my thoughts on the future of American education, the
development of our workforce, and other policies necessary to ensure
America's continued competitiveness in the global economy.
Any discussion of competitiveness in the 21st century must, in my
view, begin by recognizing the central role of technology and
innovation. Having spent the last 30 years as the head of one of the
world's leading software companies, I am continually astounded at the
tremendous potential for technology to improve people's lives. My faith
that technology can help transform lives has only been strengthened
through my work with the Gates Foundation, which focuses on funding
innovative solutions in health care and education in order to reduce
inequities in the United States and around the world.
When it comes to innovation, America has a great deal of which to
be proud. Many of the greatest advances in computing originated in
America's research labs, public and private. These technologies have
helped America achieve unprecedented gains in productivity and real
wage growth.\1\ American companies are global leaders in producing
innovative pharmaceuticals, and our biotechnology industry is the envy
of the world.\2\
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\1\ For a recent report on the impact of information technology
innovations on U.S. productivity and economic growth, see Robert D.
Atkinson & Andrew S. McKay, The Information Technology & Innovation
Foundation, Digital Prosperity: Understanding the Economic Benefits of
the Information Technology Revolution, Jan. 2007.
\2\ I witness the impact of these innovations every day in my work
with the Gates Foundation. The Foundation is working with dozens of
leading research institutions and biotechnology and pharmaceutical
companies, many located in the United States, to develop innovative
vaccines for HIV, malaria, and a host of other developing world
illnesses. More information about the Gates Foundation's work on global
health issues is available on its website: http://
www.gatesfoundation.org/GlobalHealth.
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In these and other areas--energy, transportation,
telecommunications, financial services, manufacturing, agriculture, and
many others--the achievements borne of American ingenuity and
inventiveness have fueled unprecedented prosperity and improved the
lives of people everywhere. America will need every ounce of this
ingenuity as it confronts the challenges of this century: climate
change, energy independence, national security, rising health care
costs for an aging population, and the emergence of new innovative
economies in Asia and elsewhere.
When I reflect on the State of American competitiveness today, my
immediate feeling is not only one of pride, but also of deep anxiety.
Too often, we as a society are sacrificing the long-term good of our
country in the interests of short-term gain. Too often, we lack the
political will to take the steps necessary to ensure that America
remains a technology and innovation leader. In too many areas, we are
content to live off the investments that previous generations made for
us--in education, in health care, in basic scientific research--but are
unwilling to invest equal energy and resources into building on this
legacy to ensure that America's future is as bright and prosperous as
its present.
America simply cannot continue along this course. We must invest
now to secure our economic and technological leadership for the future.
In my view, we will lose this leadership unless we take three important
steps:
First, we must ensure that America's students and workers
have the skills necessary to compete in a digital economy by providing
them with the necessary educational opportunities and resources. A top
priority must be to reverse our dismal high school graduation rates--
with a target of doubling the number of young people who graduate from
high school ready for college, career, and life--and to place a major
emphasis on encouraging careers in math and science. We must also focus
far more of our energies on upgrading the skills of Americans already
in the workforce.
Second, we need to attract and retain the brightest, most
talented people from around the world. This will not happen until we
reform our immigration policies for highly skilled workers. America
should be doing all it can to attract the world's best and brightest.
Instead, we are shutting them out and discouraging those already here
from staying and contributing to our economic prosperity.
Third, we need to provide a foundation for innovation by
investing in ideas and capturing their value. The public sector in
particular needs to continue to increase investments in R&D, especially
in basic scientific research, to complement the R&D of the private
sector and address new challenges. The R&D tax credit, which provides a
critical, proven incentive for companies to increase their investment
in U.S.-based research and development, needs to be made permanent. We
also need a legal framework that rewards innovation.
I. Providing 21st Century Educational & Training Opportunities
America cannot maintain its innovation leadership if it does not
educate world-class innovators and train its workforce to use
innovations effectively. Unfortunately, available data suggest that we
are failing to do so--in our math and science programs, in our job
training programs, and especially in our high schools.
A. Improving America's High Schools
America's greatest educational shortcoming today is what for much
of our history was its greatest pride: our public schools. American
schools have long been the cornerstone of this country's fundamental
belief that all people have equal value and deserve an equal
opportunity to lead productive lives. Yet all of the evidence indicates
that our high schools are no longer a path to opportunity and success,
but a barrier to both.
Our current expectations for what our students should learn in
school were set 50 years ago to meet the needs of an economy based on
manufacturing and agriculture. We now have an economy based on
knowledge and technology. Despite the best efforts of many committed
educators and administrators, our high schools have simply failed to
adapt to this change. As any parent knows, however, our children have
not--they are fully immersed in digital culture.
As a result, while most students enter high school wanting to
succeed, too many end up bored, unchallenged and disengaged from the
high school curriculum--``digital natives'' caught up in an industrial-
age learning model. Many high school students today either drop out or
simply try to get by. For those who graduate, many lack the skills they
need to attend college or to find a job that can support a family.
Until we transform the American high school for the 21st century, we
will continue limiting the lives of millions of Americans each year.
The cost of inaction substantially increases each year that we fail to
act. Consider the following facts:
America has one of the lowest high school graduation rates in the
industrialized world. According to a study released by Education Week,
three out of every 10 ninth-grade students will not graduate on time
and about half of all African-American and Hispanic ninth graders will
not earn a diploma in 4 years. Of those who do graduate and continue on
to college, over a quarter have to take remedial courses on material
they should have learned in high school. Employers complain that high
school graduates today lack the basic writing and analytic skills
required to succeed even in entry level positions.
Every student in America should graduate from high school ready for
college, career and life. Every child. No exceptions. Whether they are
going off to college or into the work force or a combination of the
two, it is the responsibility of public education to give our young
people the skills, knowledge and preparation for life they need and
deserve.
As we work toward this goal, I would urge Congress to place an
equal focus on standards, measurements and data, and additional support
for students and teachers. Educational standards have one central
purpose--to ensure that students make the most of their abilities. For
our country and our young people to be successful, all students should
have access to schools and courses that prepare them for college,
career and life. Many State standards in place today are unacceptably
low.
For instance, only about half of our States require students to
take 3 or 4 years of math to graduate from high school. Eight States do
not set any math course requirements. Furthermore, in many States, any
math course counts toward that requirement, as if consumer math were
the same as calculus. If high standards encourage young people to make
the most of their talents, then low standards discourage them from
doing so--and right now, that is our predominant policy. I applaud the
commitments made by more than 30 governors to raise their States' math
and literacy standards and ensure K-12 policies help students meet the
demands of college and work. I commend the President and Secretary of
Education for their call for rigorous coursework and the members of
this committee for their tireless attention to these issues. We need to
continue to support these efforts by offering incentives for States to
adopt higher standards.
We also must understand how well our schools and students are
performing relative to these standards. Data collection systems must be
transparent and accurate so that we can understand what is working and
what isn't and for whom. Therefore, we need data by race and income. I
urge this committee to support the creation of a Center for State
Education Data, which will serve as a national resource for State
education data and will provide one-stop access for education research
and policymakers, along with a public Web site to streamline education
data reporting. But we can't just collect data. We also need to use the
data we collect to implement change, including by personalizing
learning to make it more relevant and engaging for students--and
thereby truly ensure that no child is left behind.
We also need to accurately define and measure graduation rates.
Currently, States use a variety of different methods for calculating
graduation rates. There is no universally accepted standard that would
allow easy comparisons between States or school districts. Recently,
the governors of all 50 States took a big step to correct this problem
by signing the National Governors Association's Graduation Rate
Compact, which commits them to adopt accurate and consistent
measurements. Federal policies should provide incentives for States to
meet this important goal.
If we are going to demand more from our students and teachers, then
it is our obligation to provide them with the support they need to meet
the challenge. All students--regardless of age, grade level, gender, or
race--do better when they are supported by a good teacher. Committed,
quality teachers are the lynchpin of a good educational system, and
those that excel--especially in challenging schools or in high-need
subjects like math and science--should be rewarded. The Teacher
Incentive Fund is an important first step in ensuring that teachers are
rewarded, valued and respected as they would be in my company or in any
other organization. This program should be made permanent through
authorization.
We also need to take steps to ensure that curricula are engaging
and relevant to students' current needs. A model for this is the
Partnership for 21st Century Skills, of which Microsoft is a member.
This unique partnership of education, government, and business leaders
seeks to help schools adapt their curricula and classroom environments
to align more closely with the skills that students need to succeed in
the 21st century economy, such as communication and problem-solving
skills.
Finally, we must also ensure that our struggling students have more
opportunities for in-depth learning and personal attention. This means
more quality learning time in schools, access to high-quality learning
materials, after school enrichment programs, and tutors.
Making these changes will be hard, but not impossible. This
committee has done important work in this regard through the No Child
Left Behind legislation. The reauthorization of No Child Left Behind
offers Congress an opportunity to build on this work and address the
other critical issues I have highlighted. I know these changes are
possible in part through my work with the Gates Foundation, which has
invested over $1.5 billion in partnership with nonprofits, school
districts, States, the private sector and others, to improve high
school education, including the support of more than 1,800 high-quality
high schools in 40 States and the District of Columbia. Microsoft has
likewise made deep investments in education, especially through our
Partners in Learning program. That program creates partnerships to
provide resources to educators focused on leadership development and
holistic learning reform. One of the program's flagship initiatives has
been our collaboration with the School District of Philadelphia to
build a ``School of the Future''--bringing innovation to all areas of
high school redesign, including instruction, technology integration,
hiring and professional development, and building design.
I would like to mention three other initiatives in particular that
demonstrate what can be achieved:
New York City has opened close to 200 new schools in the
last 5 years with many replacing some of the city's most
underperforming schools. The first set of new schools achieved an
average 79 percent graduation rate compared to graduation rates ranging
from 31 to 51 percent at the schools they replaced.
Boston's business, education and civic leaders have made a
commitment to dramatically increase the number of young people ready
for college and career. A winner of the Broad Prize this year, Boston
has increased math scores on the fourth and eighth grade National
Assessment of Educational Progress at a faster rate than other large
American cities participating in NAEP's Trial Urban District
Assessment. The number of AP math and English exams taken by minority
students is up more than 200 percent for Latino students and 78 percent
for African-Americans since 2002.
Early College High Schools are perhaps the most innovative
and groundbreaking initiative underway nationally and show all of us
what we can do if we think differently. The early college model is
counter-intuitive to most, at least initially. The approach is to
recruit traditionally low-performing, struggling students to attend
high schools that require enrollment in college courses. The schools
provide the corresponding support and guidance for students to graduate
with 2 years of college credit and/or an associate's degree. Today,
there are more than 125 early college high schools in operation in over
20 States, and there are plans to open up to 45 more by 2008. So far,
among the first class of ninth graders at the original three Early
College high schools, over 95 percent graduated with a high school
diploma, over 57 percent have earned an associate's degree, and over 80
percent have been accepted into 4-year colleges.
I encourage all of you to visit any of these school models or
districts and see this innovation first hand.
These pockets of success are exciting. But they alone cannot
transform our education systems. Doing that will take political and
public will. When people learn about the problems with our high
schools, and they hear about the possibility of success, they demand
change. That is why the Gates Foundation has joined with the Broad
Foundation to support the Strong American Schools Partnership. This
Partnership, which will be formally launched later this month, is
intended to express America's shared vision that we need to demand more
for our children now so that they will be more prepared and more
successful as adults.
B. Promoting Math and Science Education
Another area where America is falling behind is in math and science
education. We cannot possibly sustain an economy founded on technology
pre-eminence without a citizenry educated in core technology
disciplines such as mathematics, computer science, engineering, and the
physical sciences. The economy's need for workers trained in these
fields is massive and growing. The U.S. Department of Labor has
projected that, in the decade ending in 2014, there will be over 2
million job openings in the United States in these fields. Yet in 2004,
just 11 percent of all higher education degrees awarded in the United
States were in engineering, mathematics, and the physical sciences--a
decline of about a third since 1960.
Recent declines are particularly pronounced in computer science.
The percentage of college freshmen planning to major in computer
science dropped by 70 percent between 2000 and 2005.\3\ In an economy
in which computing has become central to innovation in nearly every
sector, this decline poses a serious threat to American
competitiveness. Indeed, it would not be an exaggeration to say that
every significant technological innovation of the 21st century will
require new software to make it happen.
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\3\ Jay Vegso, Drop in CS Bachelor's Degree Production, Computing
Research News, March 2006, available at: http://www.cra.org/CRN/
articles/march06/vegso.html.
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The problem begins in high school. International tests have found
our fourth graders among the top students in the world in science and
above average in math. By eighth grade, they have moved closer to the
middle of the pack. By 12th grade, U.S. students score near the bottom
of all industrialized nations. Too many students enter college without
the basics needed to major in science and engineering. Part of our
effort to transform the American high school for the 21st Century must
focus on reversing this trend and improving education in math and
sciences.
I believe our schools can do better. High schools are emerging
around the country that focus on math and science, and they are
successfully engaging students who have long been underrepresented in
these fields--schools like the School of Science and Technology in
Denver, Aviation High School in Seattle, and University High School in
Hartford, Connecticut. These schools have augmented traditional
teaching methods with new technologies and a rigorous, project-centered
curriculum, and their students know they are expected to go on to
college. This combination is working to draw more young people,
especially more African-American and Hispanic young people, to study
math and science.
Schools are also partnering with the private sector to strengthen
secondary school math and science education, and I want to mention one
recent initiative in particular with which Microsoft has been involved.
It is called the Microsoft Math Partnership, and it is a public-private
initiative designed to focus new attention on improving middle-school
math education. Although the program is currently focused on schools in
Washington State, we believe this Partnership provides a sound model
for public-private sector efforts across America.
To remain competitive in the global economy, we must build on the
success of these schools and initiatives and commit to an ambitious
national agenda for high school education. But we also must focus on
postsecondary education. College and graduate students are simply not
obtaining science, technology, engineering, and mathematics (``STEM'')
degrees in sufficient numbers to meet demand. The number of
undergraduate engineering degrees awarded in the United States fell by
about 17 percent between 1985 and 2004.
This decline is particularly alarming when we look at educational
trends in other countries. In other countries, a much greater
percentage of college degrees are in engineering than in the United
States.\4\ If current trends continue, a significant percentage of all
scientists and engineers in the world will be working outside of the
United States by 2010.\5\
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\4\ National Science Foundation, http://www.nsf.gov/statistics/
seind06/append/c2/at02-38.xls.
\5\ Hannah Beech, Asia's Great Science Experiment, Time Magazine,
October 23, 2006, available at: http://www.time.com/time/magazine/
article/0,9171,1549364,00.html.
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For years, the decline in the percentage of graduate degrees
awarded to American students in science, technology, engineering, and
math was offset by an increase in the percentage of foreign students
obtaining these degrees.\6\ But new security regulations and our
obsolete immigration system--which I will address in a moment--are
dissuading foreign students from studying in the United States.
Consider this: applications to U.S. graduate schools from China and
India have declined and fewer students are taking the Graduate Record
Exam required for most applicants to U.S. graduate schools.\7\ The
message here is clear: We can no longer rely on foreign students to
ensure that America has enough scientists and engineers to satisfy the
demands of an expanding economy.
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\6\ A recent study concluded that roughly 43 percent of computer
science and engineering degree recipients are nonresident aliens. See
Kessler, supra note 4.
\7\ Id.
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Tackling this problem will require determination by government and
support by industry. The goal should be to ``double the number of
science, technology, and mathematics graduates by 2015.'' \8\ Achieving
this goal will require both funds and innovative ideas. For high
schools, we should aim to recruit 10,000 new science and mathematics
teachers annually and strengthen the skills of existing teachers. To
expand enrollment in postsecondary math and science programs, we should
provide 25,000 new 4-year, competitive undergraduate scholarships each
year to U.S. citizens attending U.S. institutions and fund 5,000 new
graduate fellowships each year. America's young people must come to see
STEM degrees as opening a window to opportunity. If we fail at this, we
simply will be unable to compete with the emerging innovative
powerhouses abroad.
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\8\ The Business Roundtable, Tapping America's Potential: The
Education for Innovation Initiative, July 2005, http://
www.businessroundtable.org/pdf/20050727002TAPStatement.pdf.
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C. Greater Opportunities for Job Training
Even as we work to improve educational opportunities in our school
systems and universities, we cannot lose sight of the need to
constantly upgrade and enhance the skills and expertise of those people
already in our workforce. Securing America's global competitiveness
requires not only a highly educated pool of innovators, but also a
workforce that is equipped with the skills necessary to use technology
effectively. In today's economy, that means a high degree of basic
literacy, an increasing level of computing skills, and the ability to
create, analyze and communicate knowledge.
Over the next several years, 6 out of every 10 new jobs will be in
professional and service-related occupations.\9\ Given the state of our
educational system, it is not surprising that U.S. companies are
reporting serious shortages of skilled workers.\10\ According to a 2005
U.S. Department of Education study, only 13 percent of American adults
are proficient in the knowledge and skills needed to search, comprehend
and use information, or to perform computational tasks.\11\ This
yawning gap between America's economic needs and the skills of its
workforce indicates that as a nation we are not doing nearly enough to
equip and continuously improve the capabilities of American workers.
---------------------------------------------------------------------------
\9\ Daniel Hecker, Occupational Employment Projections to 2014,
Monthly Labor Review, November 2005, at 70, 71, http://www.bls.gov/
opub/mlr/2005/11/art5full.pdf.
\10\ See, e.g., Phyllis Eisen, et al., 2005 Skills Gap Report--A
Survey of the American Manufacturing Workforce, December 2005, http://
www.nam.org/s--nam/bin.asp?CID=202426&DID=
235731&DOC=FILE.PDF.
\11\ National Center for Education Statistics, U.S. Department of
Education, National Assessment of Adult Literacy: A First Look at the
Literacy of America's Adults in the 21st Century, December 2005, at 4,
http://nces.ed.gov/NAAL/PDF/2006470.PDF.
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Part of this task must fall to the private sector. For its part,
Microsoft over the past decade has launched a range of both commercial
and philanthropic programs aimed at providing IT skills training to
U.S. workers. Our commercial offerings include the Microsoft Learning
program, which provides IT skills training and certification in
cooperation with hundreds of commercial partners, and the Microsoft IT
Academy, which provides online IT training programs and other resources
to accredited educational institutions across the United States.
But several years ago, we decided to focus our community outreach
programs to support training in basic computing and Internet skills--a
program we call Unlimited Potential. Through this program, we provide
the curriculum, software and grants to support digital skills training
in community learning centers run by government and nongovernment
agencies throughout the country and around the world. For example, last
year, Microsoft partnered with the U.S. Department of Labor to provide
$3.5 million in cash and software to 20 of the Department's One-Stop
Career Centers located throughout the country. We also donated our
innovative Digital Literacy curriculum to those Centers to advance
their technology training mission. We have similar partnerships with
the Boys and Girls Clubs, the National Urban League and with many
development agencies and NGOs in more than 100 countries.
In combination with our parallel program for school-based training,
Partners in Learning, our ambition is to reach a quarter of a billion
people by the end of this decade. Meanwhile, we have begun reaching out
to other companies, industry associations and State agencies to build a
workforce alliance that will promote the digital skills needed to
compete in a wide range of industry and service sectors.
As a Nation, our goal should be to ensure that, by 2010, every job
seeker, every displaced worker, and every individual in the U.S.
workforce has access to the education and training they need to succeed
in the knowledge economy. This means embracing the concept of
``lifelong learning'' as part of the normal career path of American
workers, so that they can use new technologies and meet new challenges.
Neither industry nor government can achieve these goals if we act
alone. Federal, State, and local governments must help to prepare all
of our workers for the jobs required in a knowledge economy. Workforce
enhancement should be treated as a matter of national competitive
survival. It is a down-payment on our future, an extremely vital step
to secure American competitiveness for future generations and to honor
the American ideal that every single one of us deserves the opportunity
to participate in America's success.
II. Attracting and Retaining the World's Best and Brightest
For generations, America has prospered largely by attracting the
world's best and brightest to study, live and work in the United
States. Our success at attracting the greatest talent has helped us
become a global innovation leader, enriched our culture, and created
economic opportunities for all Americans.
Unfortunately, America's immigration policies are driving away the
world's best and brightest precisely when we need them most. I
appreciate the vital national security goals that motivate many of
these policies. I am convinced, however, that we can protect our
national security in ways that do less damage to our competitiveness
and prosperity. Moreover, the terrible shortfall in our visa supply for
the highly skilled stems not from security concerns, but from visa
policies that have not been updated in over a decade and a half. We
live in a different economy now. Simply put: It makes no sense to tell
well-trained, highly skilled individuals--many of whom are educated at
our top colleges and universities--that the United States does not
welcome or value them. For too many foreign students and professionals,
however, our immigration policies send precisely this message.
This should be deeply troubling to us, both in human terms and in
terms of our own economic self-interest. America will find it
infinitely more difficult to maintain its technological leadership if
it shuts out the very people who are most able to help us compete.
Other nations are recognizing and benefiting from this situation. They
are crafting their immigration policies to attract highly talented
students and professionals who would otherwise study, live, and work
here. Our lost opportunities are their gains.
I personally witness the ill effects of these policies on an almost
daily basis at Microsoft. Under the current system, the number of H-1B
visas available runs out faster and faster each year. The current base
cap of 65,000 is arbitrarily set and bears no relation to U.S.
industry's demand for skilled professionals. For fiscal year 2007, the
supply did not last even 8 weeks into the filing period, and ran out
more than 4 months before that fiscal year even began.
For fiscal year 2008, H-1Bs are expected to run out next month, the
first month that it is possible to apply for them. This means that no
new H-1B visas--often the only visa category available to recruit
critically needed professional workers--will be available for a nearly
18-month period. Moreover, this year, for the first time in the history
of the program, the supply will run out before the year's graduating
students get their degrees. This means that U.S. employers will not be
able to get H-1B visas for an entire crop of U.S. graduates. We are
essentially asking top talent to leave the United States.
As with H-1B visas, the demand for green cards far exceeds the
supply. Today, only 140,000 permanent employment-based visas are
available each year, which must cover both key employees and their
family members. There is a massive backlog in many of the employment-
based green card categories, and wait times routinely reach 5 years.
Ironically, waiting periods are even longer for nationals of India and
China--the very countries that are key recruiting grounds for the
professionals desperately needed in many innovative fields.
In the past, we have succeeded in attracting the world's best and
brightest to study and work in the United States, and we can and must
do it again. We must move beyond the debate about numbers, quotas, and
caps. Rather, I urge Congress to ask, ``How do we create a system that
supports and sustains the innovation that drives American growth,
economic opportunity and prosperity?'' Congress can answer that
question by acting immediately in two significant ways.
First, we need to encourage the best students from abroad to enroll
in our colleges and universities, and to remain in the United States
when their studies are completed. Today, we take exactly the opposite
approach. Foreign students who apply for a student visa to the United
States today must prove that they do not intend to remain here once
they receive their degrees. This makes no sense. If we are going to
invest in educating foreign students--which we should and must continue
to do--why drive them away just when this investment starts to pay off
for the American economy?
Barring high-skilled immigrants from entry to the United States,
and forcing the ones that are here to leave because they cannot obtain
a visa, ultimately forces U.S. employers to shift development work and
other critical projects offshore. This can also force U.S. companies to
fill related management, design, and business positions with foreign
workers, thereby causing further lost U.S. job opportunities even in
areas where America is strong, allowing other countries to
``bootstrap'' themselves into these areas, and further weakening our
global competitive strength. If we can retain these research projects
in the United States, by contrast, we can stimulate domestic job and
economic growth. In short, where innovation and innovators go, jobs are
soon to follow.
Second, Congress should expedite the path to Permanent Resident
status for highly skilled workers. The reality for Microsoft and many
other U.S. employers is that the H-1B visa program is temporary only in
the sense that it is the visa we use while working assiduously to make
our H-1B hires--whether educated in the United States or abroad--
permanent U.S. residents. Rather than pretend that we want these highly
skilled, well trained innovators to remain for only a temporary period,
we should accept and indeed embrace the fact that we want them to
become permanent U.S. residents so that they can drive innovation and
economic growth alongside America's native born talent.
These reforms do not pit U.S. workers against those foreign born.
They do not seek to make or perpetuate distinctions among the best and
brightest on the basis of national origin. They simply recognize the
fact that America's need for highly skilled workers has never been
greater, and that broad-based prosperity in America depends on having
enough such workers to satisfy our demand. Far from displacing U.S.
workers, highly skilled foreign-born workers will continue to function
as they always have: as net job creators.
III. Investing in Research, Rewarding Innovation
A. Investments in Research and Development
America's current technology leadership is a direct result of
investments that previous generations made in basic scientific
research, especially publicly funded projects undertaken in government
and university research labs. For instance, research in the 1970s by
the Defense Department's Advanced Research Projects Agency (ARPA, later
known as DARPA) led directly to many of the technologies that underlie
today's Internet. As another example, grants from the U.S. Navy and the
National Science Foundation helped fund the development of public key
encryption systems, which we now use daily in everything from ATM
machines to email and electronic commerce.
American companies were able to capitalize on these innovations and
turn them into globally successful products because of our world-class
universities, innovative policies on technology transfer, and pro-
investment tax rules. These policies have driven a surge in private-
sector R&D investment. Since the mid-1970s, U.S. industry investment in
R&D has more than quadrupled. Today, industry is responsible for two-
thirds of total R&D in the United States, and as of the early part of
this decade, industry R&D investments were growing faster than the
economy as a whole. Microsoft in many ways exemplifies this trend. We
annually invest over $6 billion in R&D, which ranks among the highest
R&D expenditures in the world by a major technology provider, both in
absolute terms and as a percentage of revenues.
As important as private-sector R&D investment is, Federal research
funding is equally vital to America's technology leadership. Federally
funded research enriches the commons of knowledge and provides the raw
material for U.S. industry to transform into commercially successful
products. Federal funding for university-based R&D also helps educate
the next generation of scientists and engineers--those who will largely
determine whether America remains innovative and globally competitive.
In my view, America's ability to remain a technological powerhouse
will depend in large part on the extent to which the Federal Government
invests in basic research. Unfortunately, Federal research spending is
not keeping pace with our Nation's needs. According to the Task Force
on the Future of American Innovation, ``as a share of GDP, the U.S.
Federal investment in both physical sciences and engineering research
has dropped by half since 1970. In inflation-adjusted dollars, Federal
funding for physical sciences research has been flat for two decades. .
. .'' \12\ This stagnation in spending comes at a time when other
countries and regions, such as China and the EU, are increasing their
public investments in R&D.
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\12\ Task Force on the Future of American Innovation, Measuring the
Moment: Innovation, National Security, and Economic Competitiveness,
November 2006, at 9, http://futureofinnovation.org/2006report/ (follow
``Benchmarks of Our Innovation Future'' report hyperlink).
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To ensure that our Federal and university research labs continue to
serve as sources of innovation and expertly trained scientists, and
that industry has incentives to continue investing heavily in R&D, it
is critical that Congress take the following steps:
First, the Federal Government needs to increase funding for basic
scientific research significantly. While recent increases in the
research budgets of the Department of Energy and the National Science
Foundation are commendable, more must be done. As Federal research
priorities expand into new areas, we should seek to increase funding
for basic research by 10 percent annually over the next 7 years.
Congress should consider other innovative ideas as well, such as: (1)
new research grants of $500,000 each annually to 200 of the most
outstanding early-career researchers; (2) a new National Coordination
Office for Research Infrastructure to manage a centralized research-
infrastructure fund of $500 million per year; (3) establishing and
providing funding for Advanced Research Projects Agencies in various
departments, similar to DARPA of the 1970s; and (4) ensuring that
research projects are communicated to the private sector so that
companies can collaborate more effectively with recipients of public
research funds.
Second, Congress should permanently extend the R&D tax credit,
which expires again at the end of 2007. Each year, Microsoft creates
thousands of new R&D jobs throughout the world. As we continue to look
for opportunities to reduce costs across our business, the R&D tax
credit provides an important incentive to encourage Microsoft and other
U.S. companies to continue to increase R&D investment in the United
States. The credit is a positive stimulus to U.S. investment,
innovation, wage growth, consumption, and exports, all contributing to
a stronger economy and a higher standard of living. As other countries
recognize the long-term value of R&D and offer permanent and generous
incentives to attract R&D projects, the United States must renew its
commitment to U.S.-based R&D by making the tax credit permanent so
businesses may rely on it when making decisions on where to source R&D
projects.
B. Rewarding Innovation
In addition to investing in innovation, we must also reward
innovators. This means giving inventors the ability to obtain
intellectual property protection for their innovations, and to enforce
these rights in the marketplace. America is fortunate that our leaders
recognize the importance of intellectual property rights and the need
for these rights to be respected, both at home and abroad. I know I
join many other Americans in thanking this Congress and this
Administration for their tireless efforts to promote intellectual
property protection.
In this regard, I would briefly note Microsoft's support for
current efforts in Congress to reform the U.S. patent system to meet
the needs of the 21st century. Microsoft and other technology companies
are working closely with Chairman Leahy and Senator Hatch on the Senate
Judiciary Committee, and with the leadership of the House Judiciary
Committee, to advance legislation on needed reforms. Although I will
not delve into the details here, the reforms supported by Microsoft and
many others will improve patent quality, reduce excessive litigation,
and promote international patent harmonization--reforms that are vital
if America is to retain its pre-eminence in technology innovation.
In my view, the challenges confronting America's global
competitiveness and technological leadership are among the greatest we
have faced in our lifetime. Frankly, we have not been the careful
stewards of our own ``innovation account'' that our children and
grandchildren have a right to expect of us. It is time to revisit our
game plan in this regard.
I recognize that implementing these solutions will not be easy and
will take strong political will and courageous leadership. But I firmly
believe that our efforts, if we succeed, will pay rich dividends for
our Nation's next generation. We have had the amazing good fortune to
live through one of the most prosperous and innovative periods in
history. We must not squander this opportunity to secure America's
continued competitiveness and prosperity.
Thank you again for this opportunity to testify. I welcome your
questions on these topics.
The Chairman. Well, thank you very much, Mr. Gates. And
thank you particularly for your extensive testimony. I hope
members will get a chance to, sort of, take that with them.
It's a very detailed, elaborate testimony that expands on each
of these points, an enormous amount of useful and constructive
information.
We'll try and do 4-minute rounds. I think we've got quite a
group here. I'd cut it to less than that but hopefully, we'll
keep the questions short.
We're going to address a number of these issues on the
immigration--we've had a chance to talk, and we're continuing
to talk, and I think the points that you mentioned make a lot
of very, very good sense, and we'll work closely with you when
we have an opportunity to get to that.
I'd like to ask you a broader question, and that is about
the spirit of innovation and discovery. Your company is THE
company in the world that really epitomizes innovation and
discovery. We have seen this Nation, at different times--
whether it was building the Brooklyn Bridge or going to the
Moon--where we had this spirit of innovation and discovery. I'm
interested in what you would say--or what your comment is on
the broad theme about how you generate that kind of spirit of
innovation and discovery, and have something that's valued by
the American people, so that they expect leadership in these
areas by those who are going to lead this Nation. How do we get
to the point where this Nation is just not eating seed corn
from the past generation, as you, kind of, referenced, but
really is going to be the kind of generation that is going to
add an additional dimension into our society in these areas--
the life science century. We are there, in terms of the
progress in the human genome and stem cell research. The
possibilities are virtually unlimited. What can you tell us and
tell the American people about what they ought to expect and
what leaders ought to provide?
Mr. Gates. Well, the opportunities for innovation in the
computer field and in the health field, in particular, are much
greater than I think people recognize. The pace of innovation
in those areas will be far more rapid than ever before. And so,
there'll be some wonderful breakthroughs--computers that we can
talk to and continued low cost, even using computers in
education in some ways that we've never seen before, so that
every kid can access the world's knowledge and find other kids
who have similar interests. I think as people see that, there
will be a great level of excitement.
The world at large envies two things that the United States
has. We have the world's best universities--the top 20
universities--a list anywhere from 15 to 19 of those, people
would say, are in the United States. Now, that's recognized by
countries overseas, and they're, likewise, making investments
in their universities. But that is a huge advantage. And even
if you look at where the companies that do technological
advances--biotech or computer companies, where they've grown
up, it's largely where the top universities are, as opposed to
just the large population centers.
This is a country that the most talented people in the
world want to come and work at. And so, if you look at any of
the technology companies, which are the ones I know best,
they're quite a mix of people who grew up in the United States
and foreign-born people.
The excitement about these breakthroughs--we definitely
need to do more to share that story, because if we look at the
enrollment trends in science and math, it continues to decline,
and the declines are even more pronounced if you look at women
in those fields, or minorities in those fields. And so, you
have this contradiction. Here you have Apple, Google,
Microsoft, great companies doing neat things, and you'd expect
that would draw the young people in, into those fields. And
yet, because of the curriculum or the quality of the teaching
in those areas, it's not happening here. And that's partly why
there is this shortage. And yet, other countries are putting
the energy in----
The Chairman. Let me just ask, because----
Mr. Gates. Yeah.
The Chairman [continuing]. My time is going to be up. You
outlined, in particular, the area of education. You're noted
for accountability. What do you expect of the business
community. This would be extensive kinds of investments that
you've outlined, in terms of the recommendations. What should
we expect from the business community--what role can they play,
in terms of helping to move in these directions, particularly
the area of education? Do you see a role for them in there?
What should we expect from them? What should we ask them?
Mr. Gates. Well, first and foremost, the business community
has to be an advocate for high-quality education, that those
investments are fundamental to their future. The business
community also will be a leader, in terms of workforce
training. There's some very innovative ways of using online
Internet training and skills testing that is starting in the
business community, but I think will even start to be used in
universities, as well.
Businesses like Microsoft have a particular expertise--in
our case, software--can provide that to schools, can make sure
our employees are volunteering and getting the computer science
learning, even down in the elementary schools, to be as strong
as it can be. So, I think business is seeing this as a top
issue, and wants to get more involved. In some cases, coming in
to the schools and helping out, that's hard for them to do, but
I think the desire is definitely there.
The Chairman. Senator Enzi.
Thank you.
Senator Enzi. Thank you, Mr. Chairman.
I really appreciate your comments about rewarding teachers
who excel. We did have, in our appropriations, a little over
$100 million for doing that. But there seems to be some concern
about paying a little bit more to somebody who does well, and
that got pulled out of the final appropriations bill.
A year ago, I was in India. We were trying to find out how
they graduate so many scientists and engineers. I met with one
person that I thought had some great insight. They said that
they didn't have any professional sports teams.
[Laughter.]
Senator Enzi. So, the highest pay and the most prestige
that they could get was being a scientist or an engineer or a
doctor, something in that kind of field.
We're trying to strengthen Americans' competitiveness in
this global economy, and we know that workers have to know and
understand math and science. And once kids drop out of math and
science, they never seem to get back into it. So, how do we do
that? Do we fire them up with fear, or just desire and
knowledge? Do you have any suggestions for how we get kids
interested in the science and math fields?
Mr. Gates. Well, one of the positive data points in this
area is that there's over a thousand high schools that the
Gates Foundation has helped support that take a bit of a
different approach. These are smaller high schools where kids
are taking less subjects at a time, and a number of those have
themes. The themes are quite varied. Some are early college,
some are high-tech, some are art, construction, aviation,
Outward Bound. It takes the math curriculum, and instead of it
just being math for math's sake, they teach it in terms of
solving a problem, dealing with a project. Many of these
schools are seeing much higher percentages of kids interested
in going into math and science. For example, High Tech High,
which there's quite a few of those now, over 30 percent of the
kids say they want to go into math and science. So, that's more
than double the number that you have out of the typical high
school.
I think with the quality of the math and science teachers
that are engaged in their field, who can share the love of
their field, and some improvements in the curriculum, would be
very important elements of that.
Senator Enzi. Thank you. We have a first robotics
competition that gets kids interested in engineering and some
of those things, too. I've been doing an inventors conference
in Wyoming every year to stimulate kids to think about
inventions--not necessarily ones as complicated as computers,
just the idea of innovation--and that's been having some
success at getting kids into science.
Since we have a lot of members here with us, I'll go ahead
and relinquish the rest of my time. I really appreciate your
testimony, and I'll be inviting you to my inventors
conferences.
Mr. Gates. Excellent. Thank you.
The Chairman. Senator Dodd.
Senator Dodd. Thank you very much, Mr. Chairman.
And, Mr. Gates, welcome to the committee. All of us want to
underscore the comments of Senator Kennedy and Senator Murray
in the opening remarks. We have great admiration for you, what
you've done with your company, but also what you're doing with
your Foundation and your deep commitment to these issues. So,
thank you immensely for that.
Vern Ehlers and I have a piece of legislation on voluntary
national standards. We emphasize the word ``voluntary'' because
of the problems with mandated standards. We'd invite your
attention to take a look at it. We provide some incentives in
there to try and get them--given the fact that we see States
dumbing-down, too many cases, test scores here so that they're
not--they stay in operation, but certainly not providing the
kind of standardized judgments that we want to make about
whether or not we're reaching the goals that we all want to
have for us.
And I appreciate you mentioning the university high
schools. We had a hearing of this committee at the University
of Hartford several years ago, which is one of those
institutions you talked about here, where the university has
the high school on the campus of the University of Hartford. In
fact, Senator Alexander and I had a witness before this
committee, of a young man who's a student at that university
high school, who was very compelling to all of us here, and the
experience he's having as a result of being drawn out and
brought into that environment, making a difference with it.
United Technologies Corporation, in Connecticut, George
David, who I think you may know, the chief executive officer
there, offers to all of their employees worldwide the time, the
cost, and the incentive of offering stock to students who get a
higher degree, who are employees of the United Technologies. It
costs the corporation, obviously, a significant amount, but the
advantage has been tremendous, in terms of retention and
productivity of their employees. So, there's very creative
ideas that are occurring all over the place.
I want to draw your attention, if I can, to a subject
matter we've spent a lot of time on in this committee over the
years, dealing with 0 to 3. In fact, one of your great pals and
friends, Warren Buffett, his daughter, Susie Buffett, is very
involved in this issue, as well. I wonder if you might draw
some attention to that question here in response, to this idea
of early intervention with these--the brain development. We
start identifying--in fact, many people made by the time a
student's in the third grade, they're already--if they're not
succeeding and moving forward, their ability to succeed and
develop the appetites for math and science are diminished to a
large extent. And there's been some suggestions of starting
things like universal pre-K programs so you really--and quality
childcare, so that you begin to get that parental involvement
early on to develop and nurture the ability of these children
to be ready to learn, to then accept the disciplines in math
and science. I know you've done a lot of work in the health-
related areas, but I wonder if you might just address some of
the early interventions that might be made to increase the
possibility of students developing these appetites.
Mr. Gates. OK. The first times of the tests, I think it is
important for us to know where we stand. Mathematics is not
different in one State versus another State. Having a clear
understanding of where our fourth-graders, eighth-graders, and
seniors are in these areas, we're certainly a big advocate of
that. The problem you get into is, as soon as you realize how
bad the situation is, then it's like a hot potato, people say,
``Well, what's the problem?'' I think with NCLB, one of the
great things is, it has pointed out these deficits, and there's
lots of discussion about how that can be improved. But, I
think, overall that's a big contribution, that people have
seen, the minority achievement is not where it should be, and
the various high schools are not where they should be.
In terms of the early-learning part, there's varying data
on this. If you take the United States, at the fourth-grade
level we are still largely at the top in testing of fourth-
graders. By eighth-graders, we're in the middle of the pack;
and by senior year, we're basically at the bottom of rich
countries. So there's clearly something happening there. We
have the highest dropout rate, and that's why the Foundation--
early learning's important, elementary's important--we took
high schools as our big focus, particularly because there
wasn't a lot going on in that area. We do, in Washington State,
have a couple of early-learning pilots that are very similar to
what Susie Buffett's done in Omaha and what a number of people
have done in Chicago. Some of the tracking data suggests those
early interventions last, some of the data suggests those early
interventions fade in benefit, because the environment, both
the social and home environment that those kids are in, that
within 3 years, a lot of that is gone away.
Some of these tough issues in education, like merit systems
that teachers will embrace, or curricula that uses technology a
new way, those are some of the issues that, in the middle of
next year, as I move to be full time at the Foundation, I want
to spend a lot more time sitting and watching what goes on, and
learning a lot about. Early learning has some real benefits,
but the numbers are still--there's quite a range of opinions
about how impactful it is.
Senator Dodd. I appreciate that very much and look forward
to it, as well.
Thanks, Mr. Chairman.
The Chairman. Senator Gregg.
Senator Gregg. Thank you.
Let me join my colleagues in thanking you for your efforts
in putting your dollars behind your language, especially on the
issue of education. I agree with you that the issue is at the
high school level. When Senator Kennedy and I were putting
together No Child Left Behind, we focused on math and science
because it was a quantitative event, but we didn't get into
high school issues because the Federal Government really
doesn't have a role in high schools. We don't fund high
schools.
The one place we do have a role is in this area of
immigration, which you've mentioned. I'm also in total
agreement with your view, which I would characterize, and maybe
inappropriately, as going around the world and picking the best
and the brightest, and having them come to the United States.
That's what we've done as a culture, and we've been very
successful.
So, I guess my first question to you is, Do you have a
number that you think we need, relative to the H-1B visa
program? Today, it's statutorily set at about 65,000, but we're
up to about 120,000. Do you think that number should be raised
to 200,000, 300,000? What number would give America the
capacity to get the people we need to come here to take
advantage of our society and allow us to access their
abilities?
Mr. Gates. Well, my basic view is that an infinite number
of people coming who are taking jobs that pay over $100,000 a
year are going to pay taxes--we create lots of other jobs
around those people--so my basic view is that the country
should welcome as many of those people as we can get, because
people with those great talents, particularly in engineering
areas, the jobs are going to exist somewhere, and the jobs
around them are going to be created wherever those uniquely
talented people are. So, even though it may not be realistic, I
don't think there should be any limit. Other countries have
systems where, based on your education, your employability,
you're scored for immigration. And so, these people would not
have difficulty getting into other rich countries. In fact,
countries like Canada and Australia have been beneficiaries of
our system--discouraging these people with both the limits and
the long waits and the--what the process feels like as they go
through the security checks.
There are some suggestions about if we could, say, in the
green card system not have to count the family members--if you
somewhat more than doubled that, you could start to clear the
backlog and not have that be a problem. Likewise, with H-1B, if
you had a few categories, like people who are educated here in
this country, that you gave an exemption outside of the quota
that somewhat more than doubling would get us what we need. But
that--to some degree, that's sort of like a centrally managed
economy, both----
Senator Gregg. Unfortunately, if I could--because my time's
going to be up--that's what we have here. I agree 100 percent
that we shouldn't have a limit on highly skilled people coming
into the country. But we do have a centrally managed economy,
and right now it's not being managed well. So, I would presume
that if we were to double the number, say, to 300,000, you
wouldn't have any problem with that, since you're willing to go
to infinity.
Mr. Gates. Well, it would be a fantastic improvement. And I
do think that there's a draft bill that has provisions that
would largely take care of this problem.
Senator Gregg. We also have something called a lottery
system, which allows 50,000 people in the country simply
because they win a lottery. They could be a truck driver from
the Ukraine. Last year, I offered an amendment which would have
changed that system by requiring that 60 percent of those in
the lottery be people with advanced degrees. So, you'd have to
be a physicist from Ukraine before you could win the lottery.
Do you think that would be a better approach, maybe?
Mr. Gates. Well, I'm not an expert on the various
categories that exist. I don't actually know that lottery
system. I know the engineers at Microsoft, nobody comes up to
me and says, ``Hey, I won this lottery.''
Senator Gregg. Well, that's the problem.
Mr. Gates. But there's a lot of different categories in
there and I'm not sure how they should all be handled. But I do
know in the case of the engineering situation we should
specifically have that be dramatically increased.
Senator Gregg. Thank you.
The Chairman. Normally, Mr. Gates, we'd have Senator Murray
here. She's chairing a Veterans Committee at this time. And I
think we understand the importance of that, particularly at
this time. So, she is necessarily absent and wanted me to
extend her wishes.
Senator Clinton.
Senator Clinton. Thank you, Mr. Chairman.
And welcome, Mr. Gates. We're delighted to have you.
Senator Enzi made reference to Sputnik, 50 years ago. And
one of the ongoing results of that event was to really focus
America's attention on what we needed to do with math and
science education to try to provide loans for school, the NDEA
loans. I've got one, even though I was not a math or science
person. And I think it's really appropriate in the--2007 we
would take another look at what we need to do to be competitive
and to maintain our scientific and technological edge.
You said in your testimony that we should set a goal of
making sure every young person graduates from high school,
which I agree with. And there are benefits to that, even if the
curriculum is not as good as we would want it, or the outcomes,
it is still a positive. And then, in your testimony you also
talk about the skills of the existing workforce. And I'd like
to turn our attention to that for a minute, because clearly we
have an existing workforce that we hope can be supplemented
both by people coming from abroad, but also by a better
pipeline of our own citizens. How do you see the most effective
way of trying to improve the skills of the workforce here? I
know you have a couple of programs that Microsoft has used to
try to do that. Could you give us a little more detail on what
works to improve the IT and computing skills, and how we could
perhaps focus on that also from this committee to try to
improve the outcomes?
Mr. Gates. Many of the Microsoft programs have focused on
the areas where you have industries which are reducing the
number of employees, and then going into those situations and
giving the training--and fairly basic training; this is not
high-level engineering, this is training somebody so they'd be
effective in a call-center environment or an aide-type work,
which is very good work. And so, we've gone to the hotspots
where you have, say, a factory shutting down or significant
employment, and made sure that the opportunities to learn are
there.
One of our most successful things wasn't really intended as
a workforce training thing, it was actually the libraries
program, where we went to all the libraries in the country. The
computers were funded by the Foundation, and Microsoft gave the
software. And it's been amazing to see people coming into those
libraries, who are looking at job opportunities and then
looking at what kind of training can be available. One of the
new trends is that training, instead of just being in a
classroom, that the videos--great videos and great tests for
these things are starting to become available on the Internet.
And so, if you're lucky enough to be able to get to a computer,
either in a library or a community center or somehow, then you
can access all of this great learning material, and even test
your skills, and even get accreditation. And so, Microsoft,
Cisco, and a number of others have created accreditation tests,
not just for high-level engineering, but for, like, operators
and other jobs. And people with those certificates are able,
then, to move into the workforce in a fairly straightforward
fashion.
So, we can use technology to improve these training
opportunities. We can go after the hotspots, and then just
broad infrastructure, going beyond libraries, can give people
more access.
Senator Clinton. I also think, though, that some of these
programs would be useful in our high schools, and even our
junior high schools, because a lot of the data that I'm seeing
says that kids are bored, they don't feel stimulated, there's
not enough technology in their school environment compared to
their outside-of-school environment.
Finally, Mr. Gates, you made a brief reference to health
IT, as you made your initial remarks. This is something that
Senator Kennedy and Senator Enzi and I and others have been
working on for a number of years, to try to create an
architecture for a national system of health IT in the medical
field, which we think will have innumerable benefits for
patients and providers and others. Could you say just an
additional word about what you see for the future of health IT
and how important it is that we begin to set up some kind of a
system so that everybody knows what the standards are and how
we can begin to implement that?
Mr. Gates. Well, the current state of health IT is
surprisingly poor; that is, the amount of paperwork, the
information that's incorrect, the overhead in the system of
just trying to shuffle things around. We see that, whether it's
in the costs, or also in the outcomes. If you're away from your
normal location, and you're injured, how do they have access to
the information? And, so far, a lot of the things have just
made you sign more privacy release statements. And so, I think
Microsoft, Intel, a lot of the technology companies are saying,
``We've got to invest more in healthcare.'' We created,
ourselves, just 2 years ago, a new business in this area,
because there's really an opportunity to create the software.
We're also seeing that consumers are interested in looking at
their healthcare costs, not--for themselves, partly, but also--
say you have an older relative that you're helping to manage
their bills, what's going on--how do you easily see what's
going on and make sure the right choices are being made there?
And if we could get some standards, then this idea of having it
online and having people make choices, even being able to look
at quality data, look at cost data, we'd get more of a market
dynamic into the health system, which is a very important
thing.
So, there are some initiatives that we're behind, and we've
got some of our experts coming out and spending time talking
about that. There is more that Congress could do on this,
because within the next 3 or 4 years, we ought to be able to
make a dramatic change and reduce those costs, and create the
visibility that better choices and incentives are driven into
the system.
Senator Clinton. Thank you.
The Chairman. Thank you very much.
Senator Bingaman and Senator Alexander have been
particularly involved in this--in competitiveness legislation--
many members of this committee. And so, we acknowledge that
effort and are glad to call on Senator Alexander.
Senator Alexander. Thank you, Mr. Chairman.
And, Mr. Gates, thank you for coming. I'm especially glad
that you came, because it calls attention to what Senator
Kennedy just mentioned. Two years ago, we asked the National
Academy of Sciences a simple question, Exactly what should we
do to keep our brainpower advantage? And they gave us 20
specific recommendations, in priority order, starting with K
through 12. Up to 70 Senators have been working on that in one
way or the other over the last 2 years, and our two Senate
leaders, Reid and McConnell, introduced that on Monday into the
Senate, with broad support, and it includes most of the
provisions that you recommended, or at least many of your
recommendations that were in your excellent testimony. So, your
presence here helps call attention to this issue, in fact it is
getting more attention than our announcement on Monday, and I'm
glad to call attention to what's going on.
Also, as Senator Gregg mentioned, the immigration bill that
many worked on had several provisions--stapling a green card to
the lapel of Ph.D. or master's degree person, foreign-born
person. And there is an opportunity, I would say, this year, as
we work on immigration, to significantly expand that. I think
there's a broad consensus in the Senate that we ought to give
more preference to highly skilled foreign-born people. We
should be insourcing brainpower. And we just need to think of
ways to do it.
My question goes back to a comment that Senator Enzi made,
about a reference you made, to your work with the foundation--
25 some--years agos that not one State was paying one teacher
one penny more for being a good teacher. I was Governor of
Tennessee at the time. And I didn't know that until my second
term as Governor. So, I set about to try to change it. And one
of the persons I worked with was Albert Shanker, the late head
of the American Federation of Teachers, who said, ``Well, if we
can have master plumbers, we should be able to have master
teachers.'' But we've made very little progress on that since
then, because we haven't been able to find a fair way to reward
outstanding teachers and outstanding school leadership.
Yesterday, Senator Kennedy hosted a discussion, where every
witness talked about the need for gifted mentor teachers,
gifted teachers to go into the inner city, gifted teachers to
teach gifted students. All exceptional men and women, yet we
dance around the problem that we have no way to reward them,
for their excellence, with higher pay.
Now, the Teacher Incentive Fund you mentioned in your
testimony was in the No Child Left Behind Act. President Bush
has recommended $200 million for next year, but it got cut,
maybe by accident in the confusion between last session and
this session. But it basically has a series of programs across
the country--Philadelphia, New York, places where you're
working, some working with local union leadership to find fair
ways to reward outstanding principals and teachers. So, my
question for you is, and my hope would be, as you move more
into your Foundation work, do you think it would be useful, the
next 5 years, to encourage such efforts as a Teacher Incentive
Fund and private foundation efforts to crack this nut of
finding multiple fair ways of rewarding excellence in teaching
and school leadership by paying people more for teaching and
leading well?
Mr. Gates. Absolutely. Having the incentive system work is
very, very, important. And one of our challenges is that these
two areas, health and education, that are higher and higher
percentage of the economy, bringing the right type of metrics
and, sort of, market-based activities to those has proven to be
very difficult. And I think, in terms of how teacher evaluation
is done, we should encourage lots of experiments and make sure
that people are doing the experiments, get some extra funds to
go and do those. This is a great example where we don't know
the answer today of what is a merit system that would pay great
teachers more, that teachers, as a whole, would feel is a
predictable, well-run system. And, as we do these experiments,
we might have to invest more in teacher remediation or
reviewing what's going on with teachers.
Technology can help. The costs of actually seeing what goes
on, helping teachers see how they can do better, and letting
them learn from other teachers, seeing what they do and using
their curriculum, the cost of that is coming down quite a bit.
So, we need to make sure that a willingness to try these things
are out there, and that the--some of the extra money that it
requires is there. Simply, if you just say, ``We're going to do
merit-based'' today, people don't think the measurement
approaches are going to be predictable enough for them.
Senator Alexander. Thank you, Mr. Chairman. And I think the
data center that Mr. Gates suggested in his testimony might be
helpful in gathering the increasing information on student
achievement, and relating that to teacher effectiveness.
The Chairman. Thank you very much.
Senator Reed.
Senator Reed. Well, thank you very much, Mr. Chairman.
And welcome, Mr. Gates. Thank you.
And your testimony, I found, was very persuasive. And you
said committed quality teachers are the lynchpin of a good
education system. And I think many of the questions you're
getting today are, sort of, circling around that issue of, How
do we get quality teachers into our system? And I'm just very
curious, in general, what are your thoughts of things we could
be doing, things that we could do in partnership with private
foundations like your own. What are the impediments that you
see, from your perspective, to getting good teachers,
technically qualified, in the right places?
Mr. Gates. Well, I definitely think if you could have an
incentive system that allowed good teachers to be paid more,
you would draw more people into the field. So, you have this
Catch-22, that, because there's no good measurement system, you
don't have people who like to have that type of approach taken.
Historically, we probably benefited--it was unjust, but that--
because women had less opportunities in other fields, there
were super-talented people who went in, even though the
economic rewards were not that great. That's changed. A lot of
those talented women are now the majority of our business
schools, our law schools, and that sort of thing.
Senator Reed. Some of them are sitting right next to me.
Mr. Gates. Absolutely. The lack of attention that is given
to making it attractive to be a teacher, and having measurement
systems there, now it's more important than ever.
There are some of these charter schools that we're involved
with that have been given permission to certify teachers. And
so, they're able to take people who are math- and science-
oriented, and who do not have, say, the broad set of
requirements that a normal teacher certificate would require,
but they're allowed to come in and teach in those areas. And
so, how much loosening up you could do to let people come in,
both full time for a number of years, or even, in some cases,
part-time, to come in and share their enthusiasm and be part of
that mix, I think we need a lot more experimentation with that.
And the charter structure, in many States, has allowed us to
try some of those things out. And in California, in particular,
it's been quite effective.
Senator Reed. Well, I agree with your insight that the
metrics are very important. I would hope that that would be
something that you would be working on through your educational
issue, and other thoughtful individuals and groups.
Then, the second issue, if you've got the metrics right,
how do you actually do the compensation? Some thought has been
given to using the tax system now, because it might avoid the
whole issue of who decides, in terms of the pay? Is it a local
level? And a group of policy people of the Horizon projects
have suggested significant tax breaks for qualified teachers
who meet certain criteria. And it just strikes me as that might
avoid some of the fighting we've seen between--at the local
level between--this notion of merit pay is distrusted, because
who's going to distribute it? How are they going to decide,
etc.? And I'm just wondering if you have a thought or comment.
Mr. Gates. Yeah, I don't see any technique that avoids the
hard fact that a merit-based system involves making judgments
about----
Senator Reed. Right.
Mr. Gates. ``You did a good job. You did not do a good
job.''
Senator Reed. Right.
Mr. Gates. It's kind of like in healthcare, where you say,
``This expense is reasonable. This expense is unreasonable.''
Who's willing to stand up and say, ``Yes, I made that choice?''
And, in terms of saying to a teacher, ``No, you need to go
under remediation,'' or, ``No, you've been in remediation three
times. You're not the right person for this career,'' that's,
in a political sense, very, very difficult.
Senator Reed. Right.
Mr. Gates. But all these merit-based systems involve those
judgments being made. No matter what the source of the money
is, that really needs to happen.
And in all these educational things, you have to always be
careful, because when you create new schools, you often
attract--even if you have no criteria for it, the better
teachers will just show up there, and the better students will
just show up there. And so, when you look at these results, you
have to be very careful that you're not just seeing that
effect, as opposed to some new approach. That's partly why
we've gone, in the Foundation, to 1,400, and it'll get up to
about 2,000, high schools, a large enough number that it's not
just a few good people or that effect. There's some big cities,
including New York, Chicago, and Washington, DC., where we're
trying to do things on a large scale.
Some things are less controversial, like having the smaller
high schools or having the theme-based high schools. The pay-
practice issues have been the toughest. And so, although
there's been some changes--for example, in New York, the mayor
took some of the worst things of the seniority system, of
people being able to bump other teachers around, and was able
to override that. Most of what we're doing is more about
curriculum and structure. And, so far, although we'd love to
have it be about it, it's not been so much about the teacher
evaluation.
Senator Reed. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Do you remember who was your best teacher
when you were growing up?
Mr. Gates. Yeah, I hate to say it--I went to a private high
school, myself.
The Chairman. OK.
Mr. Gates. But, yes----
The Chairman. But, I mean----
Mr. Gates. Absolutely.
The Chairman. You remember who the teacher was. Was that
person the person with the most degrees? Or was it----
Mr. Gates. It was a person who understood science--one
science teacher, one match teacher--who loved the field. That
is, they had a college degree in the subject, but they also
were interested in following the subject and just loved the
idea that somebody else was interested in what they were
interested in. So, it's--that engagement certainly made a huge,
huge difference for me.
The Chairman. That's good.
Senator Burr.
Senator Burr. Thank you, Mr. Chairman.
You remember who was the strictest teacher you had?
[Laughter.]
Senator Burr. Part of the challenge that we've got is that
we've got a generation of kids that are relying on us to make
the right decision. And I want to thank you for your
willingness to come in. More importantly, I want to thank you
and your wife for your passion for education, but also your
investment in education.
I think, this weekend, you might have spent some time with
the president of our university system, and your wife is
familiar with Duke University. You know about higher education
in North Carolina. I want to talk about high school, because I
think that should be our passion today.
You made a statement in your testimony, ``The goal should
be that every child should graduate prepared to go to higher
education or to work.'' And the need to transform America's
high schools for the 21st century. Let me ask you, do our
expectations for high school students limit our ability to
transform the system?
Mr. Gates. Absolutely. The low standards we have today
allow us, (a) to think we're doing better than we are, and they
don't challenge the students. One of the most amazing things
about these early college schools is, they're taking the kids
who did poorly, and, by asking them to do literally more than
they were doing in the school they dropped out of, a very high
percentage of them rise to the occasion. They were essentially
bored. It wasn't hard enough for them in the high school that
they were in. And particularly if it's curriculum that gets
connected to--``This is what you need to do to achieve some job
that you're interested in.'' It works amazingly well.
There's been a move afoot to raise the standards, the
State-level standards for high schools--North Carolina's been a
leader in this--to say that you should have 3 years of
mathematics, and that those math classes shouldn't be just
balancing the checkbook. So, in the last couple of years, I
think it's almost 30 States now have raised their high school
standards. It's still not where it should be.
Senator Burr. I want to emphasize something that you said,
that the boredom--the dislocation of students is not always
because they just don't want to be in class, and they don't
want to learn. In many cases, it's because they're not
challenged enough. And that's one of the unique things about
the Gates high schools. I found that it engages every student
at a different level, and it engages them as a team, in many
cases.
Should States consider, those that haven't, raising the age
that one can voluntarily disengage from a high school education
from 16 to 18?
Mr. Gates. Well, I don't know about that. I mean, the
question is--okay, say you raise that age. What are you doing
to that 16-year-old? Are you going out and finding him and
handcuffing him and dragging him in? I mean, these--this issue
of these demotivated students who just aren't connecting is a
very tough problem. One of the things that's happened in all
the high schools we back is, we make them small high schools.
And what I mean by ``small'' is that the total high school size
is about 500 to 600. And that's very different than the big
high schools that get up in 2,000 to 3,000. In those high
schools, the goal is that every adult knows every student,
and--so that when you're walking the halls, they say, ``Hey,
you're supposed to be over there,'' or, ``Hey, I heard you
didn't turn your homework in,'' ``Do you need help?'' And so,
if you create a smaller social environment, then it really
changes the behavior in the high school. You don't think, ``OK,
I'm just a motorcycle-gang guy. I'm not supposed to work
hard,'' and you only end up with this small percentage who are
the hardworking students. So, this small size, although it's
still somewhat controversial, looks like it's making a big
difference. And the nice thing about that, it's not more
expensive. You may need to pool some things for the sports
program, but it's not an increase in expense. And so, that's
one of the few things we've found that we think really does
draw the kids in and create relationships that have expectation
that get them to step up.
Senator Burr. Great. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator Sanders.
Senator Sanders. Thank you very much, Mr. Chairman.
And, Mr. Gates, let me add my voice to those of the other
Senators here in applauding you not just for the huge amount of
money that you have provided all kinds of groups, but the
innovative quality of your Foundation that you and your wife
head, and not just in the United States, but all over the
world. You've done an extraordinary job, and I applaud you.
Now I'm going to take a little different tack than some of
my colleagues. And I want to know how you're getting along with
your dad. Because when we talk about many of the challenges
that we're facing, we have to do it within the context of a
country which has an $8-trillion national debt. And I certainly
agree with you that we need more innovation in education in a
whole lot of areas. They're going to cost money. So, let me ask
you a question. Your dad and Warren Buffett and others have
been very loud and articulate in saying that repealing the
estate tax, which would cost us about a trillion dollars over a
10-year period, is not a good idea, that some of the wealthiest
people in this country are doing just fine, they don't need,
for their families, that additional wealth that repealing the
estate tax would provide. Do you agree with your dad that
repealing the estate tax is not necessary?
Mr. Gates. Well, I think there are very few people who
speak out for a tax. Many people come and like I have today,
said, ``OK, research is more important. We need to spend more
on that. Education, although the Federal piece is only a small
piece of it, there probably needs to be more put into that.''
So those things do create budget challenges. In my dad's case,
he's actually saying that there's merit in terms--for a number
of reasons, including the revenue raised--of that tax being
preserved.
I, myself, in terms of speaking out publicly, have chosen
the innovation issues that are key, and trade issues that are
key for Microsoft, and the global health and education issues
that are key to the Foundation. So that's a lot, and those are
the things where I'm speaking out as much as I can.
I do agree with my dad. I think what he's doing there has
got a lot of merit. He, together with a colleague, wrote a book
about the issue, which actually, after I read that, I was--I
thought there were a lot of good arguments in there that I had
not heard before.
Senator Sanders. I won't ask you what your kids feel about
it, but----
[Laughter.]
Senator Sanders. You do agree with your dad that repealing
the estate tax is not a good idea. Is that what I'm hearing you
say?
Mr. Gates. Yes. In terms of speaking out, I've picked
global health, education, and some key innovation issues around
Microsoft as the ones that I'm developing expertise and really
putting the time into, but I think what my dad has done is
right, and if I had a vote on it, I would agree with----
Senator Sanders. Thank you.
Mr. Gates [continuing]. What he's saying.
Senator Sanders. Thanks very much.
Let me ask you this. And this is a sensitive issue and a
touchy issue. I think there is no disagreement on this
committee or in the Congress that, as a Nation, we're doing a
terrible job in math and science, that it is a disgrace how few
engineers we are graduating. And you have done a fantastic job
in focusing on that issue. But there is another side of the
coin where you and I may disagree, and I'd like your comments
on that, and that is the issue of outsourcing. And that is, my
understanding is that from January of--this is quoting from the
Bureau of Labor Statistics--that from January of 2001 to
January of 2006, the information sector of the U.S. economy
lost 644,000 jobs, etc., etc. Also, I think you would probably
agree that many major corporations, including your own, if they
can hire qualified labor--engineers, scientists--in India or
China for a fraction of the wages being paid in the United
States, they're going to go there. And we have quotes from
people like Andy Grove and John Chambers, leaders in
information technology, who basically predict that the IT
industry may end up in China. Now, how do you address that
issue, understanding we are in agreement, all of us are, the
need to do a heck of a lot better job in education, high school
education--math, science. But isn't there still going to be a
lure, unless we get a handle on it, that companies are going to
be running to China and India for qualified workers who are
often paid a fraction of the wages that they are in the United
States?
Mr. Gates. Well, the demand worldwide for these highly
qualified engineers is going to guarantee them all jobs, no
matter where they're located. So, anyone in the United States
who has these skills, no matter whether they were born here or
came here, not only will they have a super-high-paying job,
there will be many jobs created around them that are also great
jobs. And so, we should want to have as many of those people be
here as possible, and have those jobs that are created around
them. We've been increasing our employment in the United
States, and a limiting factor for us is how many of these great
engineers that we can get here. And yes, that does cause a
problem.
The IT industry, I guarantee, will be in the United States
to the degree that these smart people are here in the United
States. And that's why I think it's important to maximize that
number.
By and large, you can say, Is this country a beneficiary of
free trade? And the answer is overwhelmingly yes. Why can our
inventions--whether it be drugs or movies or software or
planes--why can we invest so much in those products? It's
because we're able to sell them into a global market. And by
having people of this skill level, we can have an economy that
has very high defense costs, very high legal costs, very high
medical costs, and yet continue to capture our fair share of
the economic improvement that takes place. If we do things that
artificially shut off our ability to engage in that trade
system, then the impacts on our leading industries would be
fairly dramatic.
So we love these high-paying jobs and our industry has
continued to draw people into these jobs. We pay way above the
prevailing wage rate because of the shortage that we see.
Senator Sanders. OK. Well, thank you very much.
The Chairman. Senator Isakson.
Senator Isakson. Well first of all, I want to thank you. In
my company, in the 1980s and 1990s, I credited you with
doubling the productivity of my employees and my agents.
Microsoft is just--Windows is just a phenomenal product. And
all of us, the whole country, has benefited from your
innovation. Which reminds me of a quote of Robert Kennedy's
years ago when he made a pretty well-known famous speech in
Biafra during the African famine, when he said, ``Some people
see things as they are and ask why, others see things as they
never were and ask why not.'' You obviously are a ``why not''
guy. I mean, nobody could have envisioned Windows without
having had a vision to say, ``Well, why not?''
What is it about this country that you attribute
contributing to your can-do spirit and your ability to envision
that? This is a great country. We criticize it a lot of times.
I think it's good, also, to--I don't think you could have done
what you did anywhere else in the world but in America. So, I'd
like to hear from you, who did that, some of the good things
about this country.
Mr. Gates. Well, absolutely. The success that I've had, and
that Microsoft has had, has benefited immensely from unique
characteristics that this country has. These are
characteristics that the country continues to lead in. They're
not unnoticed by others. But if we renew those strengths we can
stay in the leadership position.
The quality of our universities is high on that list. I
personally went to a great high school. I attended some years
at Harvard University. I didn't graduate, but I still had
some----
Senator Isakson. You're a famous dropout.
Mr. Gates [continuing]. Some----
[Laughter.]
Mr. Gates [continuing]. Benefit. And then, I proceeded to
hire lots and lots of people from the great universities. And
these were people who were willing to take risks. It was
actually during the 1980s, the country was, sort of, worried
about Japan. But that was actually the time when the Internet,
which benefited immensely from research funding from the U.S.
Government, was actually becoming the standard, not just for
computing, but for information sharing and an efficiency in the
entire world economy. So, certainly in the 1990s, and even
today, we're the envy of the world, in terms of how many jobs
our economy's created. We have, by many measures, record-low
unemployment. Despite some imbalances, our economy's continued
to do very well.
When you go overseas, people look at our university system,
and they say, ``Well, you've got alumni that give money. How do
we duplicate that?'' When they look at social services, they
see that philanthropy is widespread at all levels of income,
not just at the highest levels; but philanthropy is a value
that is very strong through our citizenship, and other
countries don't have that nearly to the degree that we do. And
that engages citizens in seeing what the nonprofits are doing,
what the Government can do better, and gets an active dialogue
that allows us to be smart about those things.
Protecting intellectual property, including the patent
system, the copyright system. Yes, you can read about how
people want to reform and improve those things, and we're one
of the advocates for tuning those systems, but, fundamentally,
incentives to invent are very strong here, things like the
bidual provisions that allow even work done under Government-
funded research, that there's some royalties for the inventors
in the university. Other countries have been very slow to match
that, and that's benefited us in a great number of fields,
particularly in fields related to biology.
So, we build on a foundation of strength in these issues.
But when you see us turning away these graduates from these
great computer science departments, and force them to go back,
you say, ``Wow,'' ``is that renewing the magic that's put the
country in that top position?''
Senator Isakson. Thank you very much.
The Chairman. Senator Brown.
Senator Brown. Thank you, Mr. Chairman, very much.
And, Mr. Gates, thank you for your unprecedented work on
combating global poverty, especially infectious disease. Not
since--fellow Ohioan--I think you're a native of Ohio also, if
I remember right--fellow Ohioan, Dr. Henderson organized the
worldwide project to eliminate smallpox. I think your work
since then has been the greatest--yours and your wife's and the
Foundation's--the greatest contribution to global health and--
of anybody since Dr. Henderson.
I want to shift to something a bit different. When I hear
you talk about--thank you for your comments about protecting
intellectual property. I think that's a very important thing
that we, as a Nation, need to do. I want to talk about
international health a bit. And I think that the strength of
our economy in this country over the last century has been that
we, as a Nation, have shared in the wealth--the workers have
shared in the wealth they've created. We've done that through
trade unionism, we've done that through education, we've done
that all under the umbrella of a democratic system of
government, so people that are productive have shared in the
productivity and shared in the wealth they've created. Our
trade agreements have not worked so well in the same direction.
And I know you and I have very different opinions about trade.
But I look at just a year or so before the time when you began
Microsoft. We still had a trade surplus in this country. Today
we have a trade deficit of approaching $800 billion. We--in
terms of what you've done for international health and what we
need to do for international health, when I look at our trade
policy, whether it's Mexico or whether it's multilaterally, we
simply haven't found a way to help those countries really
share--those workers share in the wealth they create. And that
means they've not established a healthcare system, they've not
been able to bring up standards of living, because those
workers, without labor standards, without environmental
standards, without the kinds of things that we've done in this
country--again, because of trade unionism, because of
democratic government, because of education--that we've been
able to lift people up. Discuss for a moment how we should
revise our trade policy. You talked about--and don't go into
the--I mean, that's just a whole 'nother issue. But, just
generally, our trade policy, what we should be doing to lift
standards in the developing world. So, your efforts on
healthcare, your efforts, from vaccines to combating TB,
malaria, and AIDS, and all that, can build on a foundation of a
better structural healthcare system in the developing world.
Mr. Gates. Well, in terms of trade, we've seen the results
of countries like, say, North Korea, that chose not to engage
in the world trade system. And, we can compare, say, South
Korea and North Korea--one is a trade-oriented country, one's a
nontrade-orientated country--and see what sort of outcomes come
out of that. So, yes, I am----
Senator Brown. With all due respect, that's an outlier.
Let's talk about countries we deal with--poor countries--
South--North Korea is----
Mr. Gates. OK.
Senator Brown. OK. Fair enough.
Mr. Gates. Health conditions in Mexico continue to improve
quite substantially. One of the consultants to our Foundation,
Julio Frank, was the Secretary of Health down there, and
they've done a number of very innovative things, including
payments to poor families relating to following health
practices and keeping their kids in schools. And, in fact,
that's an approach that now other countries are looking at,
where you use economic incentives to get poor families to
engage in these things.
Health statistics are--worldwide--are improving quite a
bit, even with some negative trends--of course, the AIDS
epidemic is very negative; drug resistance, in the case of
malaria and TB, are negative things--but, despite that, overall
health conditions are improving quite substantially. And, for
example, measles, back in the 1970s, before widespread
immunization, actually killed 6 million people a year,
children. And now, it's down under 600,000. And so I see a very
positive picture in global health. It's one that we need to
invest more in an accelerated--in a faster way.
Having jobs in those countries, and not over-regulated so
they can't create jobs in those countries, is one of the best
things. The commodities boom has been a great thing for a
number of African countries. The exports of coffee, even some
products like cotton that are extremely distorted by
subsidization policies, there's been increases in the exports
of those things. And that is a great development. Because, in
the long run, you've got to have the agricultural productivity,
and that means you've got to have exports. Most countries that
have gotten into the virtuous cycle, have done it by being
allowed to export and participate in the free-trade system.
And whenever we look at the standards for these countries,
we should say, ``OK, when we were at their level of wealth,
what were we doing on the comparable things?'' It's always an
interesting comparison to make.
Senator Brown. But when we were at their level of wealth,
we didn't have an outside economic power with the kind of
influence that American corporations did playing in our
country, to the degree that many of them do in ours.
Mr. Gates. I'm not sure what you're saying. I mean, the
United States, economically, was way behind Europe in its early
days. It benefited from investment and trade. You know I
believe in trade.
Senator Brown. As I do.
Mr. Gates. You know the Doha round, in particular, would be
quite beneficial to the African countries, where our Foundation
focuses a lot of its efforts. So, I'm very hopeful that
something can happen there.
Senator Brown. If I can make one more comment, Mr.
Chairman, on the question with Julio Frank, in Mexico, the AMA
said the area along the U.S./Mexican border is the most toxic
place in the western hemisphere, because we had no
environmental standards--real, enforceable environmental
standards in American companies and other companies on--near
the Mexican border, south of the border, in terms of disposal
of waste. And there's no reason we shouldn't--I assume you'd
agree with that--no reason we shouldn't build that into trade
agreements. That's not a trade barrier, any more than
intellectual property is a trade barrier, I don't believe.
Mr. Gates. Well, when we have a common river like the Rio
Grande, or something like that, certainly we have a very close
interest in it. I'm not an expert on that issue. Some basic
environmental things clearly are of global interest.
Senator Brown. Thank you.
Thanks. Thank you, Mr. Chairman.
The Chairman. Good.
Senator Hatch.
Senator Hatch. Well, thank you, Mr. Chairman. Welcome back.
I just want to make one comment, and that is that I hold
you and your wife in high regard. You've done so much with your
wealth that is so good for mankind that I don't think anybody
should fail to recognize that. I just wanted to be here to tell
you that, because I usually don't lavish praise on anybody, but
I think you deserve it. And anybody that can get Warren Buffett
to commune with all this, where he's a mutual friend, and, I've
got to say, one of the most brilliant people I've ever met in
my life, as you are. But I'm just very grateful to you for what
you're doing in so many ways.
Let me just say one thing. I'm also pleased with what
you're doing with Medstory. You acquired that company, and I
think that you can do an awful lot there to help people all
over the world.
I'm not going to ask you any questions, I just wanted to
personally express my regard for you, and for your wife, and
for Warren, and for what you people are doing. You just really
are making a difference in this world. And I agree with you--
with virtually everything you said in your statement. I think
that it's a very precocious statement, and very much
appreciated by all of us here.
Thank you, Mr. Chairman.
Mr. Gates. Well, thank you. Medstory, for people who don't
know what it's about, letting consumers find health
information. And the interest in that has risen, and they
were--did some very innovative work to make it easy to find
medical data. So, that's become part of our new investments in
that medical area.
Thanks for your comments. Warren has been incredibly
generous, so now we have to justify the trust that he's put in
us.
Senator Hatch. I figured that would be a very good
combination. But I just raised Medstory, because a lot of
people don't know about it, and it's an innovative thing that I
think can make a real different in healthcare all over the
world.
Thanks. I appreciate it.
Mr. Gates. Super.
The Chairman. Senator Roberts.
Senator Roberts. Thank you, Mr. Chairman.
On page 6, Mr. Gates--and I guess I'm showing my bias if I
say mega-dittos in regards to all the accolades that have been
mentioned to you, and all of them----
Mr. Gates. Thank you.
Senator Roberts [continuing]. Well deserved.
On page 6 of your written testimony, you say the problem
begins in high school. International tests have found our
fourth-graders among the top students in the world and above
average in math. By eighth grade, they move closer to the
middle of the pack. By the twelfth grade, we're down at the
bottom. My question to you is, Why? I think you answered a
little bit--this is the Enzi question--really, by saying that
your favorite teacher was somebody that made math pertinent, or
it was relevant, as opposed to math for math's sake. And you
could also include science in that category.
Why is it that China and India are getting their students
to be so terribly interested, at a young age, in these academic
pursuits, but somehow we can't generate the intellectual
curiosity in math and science from our adolescents?
Mr. Gates. First, to be clear, the comparisons there, where
we go from the top to the middle to the bottom, those are
against the industrialized countries, the rich countries.
Senator Roberts. Right.
Mr. Gates. So, Korea would be part of that, Japan,
Singapore, the Nordic countries. Among the top are countries
like Korea and Singapore.
India and Japan, as you say, are getting a higher and
higher percentage of their students going into science and
math. They're the only countries where you see significant
increases. Europe, the United States, Canada has all seen these
decline. So, whatever we're doing about making the field
interesting and attractive and showing the opportunity, there's
something shared across a lot of the rich countries.
India and China, to some degree, as was mentioned, they
don't have--these are the professions that are most admired and
that people are most excited about. They don't have the
equivalent of Wall Street or other things.
Senator Roberts. Well, how do we generate that excitement
here?
Mr. Gates. Well, to some degree, this is a--I'm very
surprised we haven't been able to do better on this, because
these jobs are very interesting jobs. Perhaps the image of them
is that they're not very social. But, in fact, if you're
designing a software product, you're working with a lot of
people, you're getting a lot of feedback. We've worked with a
number of universities, including a group called the Anita Borg
Institute, to really go down and talk to high-schoolers and ask
them what did they think about this field. And the
misperceptions are a real problem for this. When we show them
examples, particularly examples they can relate to--so, showing
the women a woman who's very successful, she comes out and
shares her enthusiasm--that can make a big difference.
Senator Roberts. OK, pardon the interruption. Senator
Reed----
Mr. Gates. Go ahead.
Senator Roberts [continuing]. Mentioned teachers. You can't
teach in the secondary school, because you don't have a
certification, and it takes 5 years. And yet, I would think
you'd be a pretty good teacher in regards to science and math,
not only because of your reputation, but it would make it real,
it would make it pertinent, they could touch it, they could
feel it. It would become exciting, as opposed to, ``I have to
take math courses.'' Is there some way that we can arrange to
shorten up that certification process to let people like
yourself, in the military or the business world or whatever,
who say, ``Well, I've had a career here. I'd like to at least
teach, but I can't teach in a secondary school.'' Now, you
could in a university, which I'm sure you do all the time.
What's your comment about that?
Mr. Gates. Yeah, I definitely think that, particularly
where we've got this huge shortage, and, as you say, the
benefit of somebody who's engaged and excited in the field
makes such a difference that perhaps making it simpler for them
to come in, either as a full-time teacher or even, in some
cases, come in to the schools, on a part-time basis and talk
about the things they do, and be part of that teaching process.
I absolutely think we need to encourage a lot more openness and
a lot of experimentation in that. We're seeing some of it in
some of the charter systems that we're involved with, but
that's one of the regulations that even the charter system
often doesn't let you get----
Senator Roberts. I understand that.
Mr. Gates [continuing]. Get around.
Senator Roberts. On page 10, you say, ``I appreciate the
vital national security goals that motivate many of these
policies.'' We're talking about immigration. ``I am convinced,
however, we can protect our national security in ways that do
less damage to our competitiveness and prosperity.'' How? As a
former chairman of the Intelligence Committee, I'd just like to
hear your comment.
Mr. Gates. Sure. As part of this immigration process, at
many, many different points during the process you undergo a
security check, the same person, many, many times. If they
actually go up to Canada briefly, they often can't get back
into the United States, because these security checks are now
taking months to take place. It's done on a very manual basis,
without much resources. In fact, it's done in a way that one
doubts that it's working very well----
Senator Roberts. Yeah, that it's working.
Mr. Gates [continuing]. At all. And so, I think that some
of the humiliation and delays that come through the security-
check process could be eliminated without dropping the goal of
being able to check a list or whatever the security concern is
there.
Senator Roberts. I appreciate it very much.
Thank you, Mr. Chairman.
The Chairman. Yeah.
Senator Allard.
Senator Allard. Thank you, Mr. Chairman.
I would like to join my colleagues up here in their
accolades for you and your wife and the Foundation.
I want to delve into this issue about performance levels at
high schools and elementary schools. I agree with you that we
need to be very concerned about what is happening at the high
school level, but I think we have to be careful by saying that,
because students are performing well, that's where their area
of interest is going to be, and that we need to say, ``Well, if
you're interested in science, for example''--and I'm a
scientist--we have to catch their fascination. We've got to--
they have to--somewhere at that point in education, they've got
to view science as magic, or math as fun. I happen to disagree
with my colleagues, that, even though they're performing well,
that they start in the elementary school. I mean, it's the
third, fourth, fifth grade that you kind of say, ``well,
because of somebody you know''--in your case, maybe a teacher.
I don't know where your fascination started, but my fascination
started in science when I was in fourth and fifth grade,
because of people I knew and interacted with.
I think, somehow or the other, we need to get teachers in
those grade levels excited about it, so they can share that
with their students. Also, I think we need to figure out a
program that gets elementary schools--teachers excited. The
reason they teach there--I think science is intimidating, and
they get into the heavy science courses--or heavier science
courses in college and high school. And I think the seed needs
to be planted at the elementary school.
Have you given that any thought? And would you have a
comment on what I just said?
Mr. Gates. Well, I agree with you that elementary school is
where we start to lose people. It's not where we lose the bulk
of the people, but having teachers at that level who can make
the subject interesting and fun, and not have people self-label
as though ``I'm not one of those people who likes math.''
``That's that''----
Senator Allard. Yeah, that's a problem.
Mr. Gates [continuing]. ``Geeky guy''----
Senator Allard. Yeah.
Mr. Gates [continuing]. ``Over there.'' That labeling,
there's some of that that happens in elementary school, but it
gets way more extreme in high school. And I think the thing
that characterizes a great elementary schoolteacher is more
about their teaching technique and less about their depth of
knowledge in the subject. So, yes, I think there should be a
focus there.
The place where we really need people who majored in the
subject in college and have a pretty in-depth knowledge of the
subject, that's more as you move up to the higher grades, that
if you're going to teach algebra and geometry, that they are
very comfortable with the ninth- through twelfth-grade
curriculum. So, I think what we--what's beneficial to teachers
to have them keep kids interested is somewhat different at
these different levels, and our expertise, because the
foundation is focused on high school, is much more at that
level. But you do see a dropoff in elementary school. You see
it in high school. And then, there's a huge dropoff, people who
enter college thinking they're going into science and math----
Senator Allard. Yeah.
Mr. Gates [continuing]. That starts out at about, I think,
14 percent, and then it's less than 5 percent have followed
through on that by the end of the undergraduate 4-year period.
Senator Allard. That's very interesting.
Coming out of the Sputnik era, when science was being
stressed, we in the TV programming, had some fun science
programs. I never was one that spent a lot of time in front of
the TV, but I think we had those sort of programs. I'm
wondering if there isn't some way, maybe on the Internet, to
begin to establish an Internet location where you could have
fun science. The fascination, for young people today, is not TV
so much, I think it's more the computer and the computer
screen. And if we can, somehow or the other, reach out to them
and make a fascinating program and pull them into this idea of
science. I think it might be something worth thinking about.
Mr. Gates. Yeah, absolutely. And Microsoft and others are
very involved in getting this started. I think there's two
flavors of that. One is the student who's motivated, who would
actually go out there and say, ``OK, let me see how volcanoes
work, or how global warming works, or how spaceflight works.''
The other thing is to take and gather the material so that a
teacher can go to those sites----
Senator Allard. Yeah.
Mr. Gates [continuing]. And then drawn down, kind of, the
images, the animations, the stories, and bring those sort of
real-life science neat stories into the classroom. And that
ability of great--some great teachers have always been doing
that, but they didn't really have a way of publishing and
sharing their ideas, and then having other people build on
those. By creating communities on the Internet of these various
types of teachers and the material and things they're doing, or
even videos of the best practice, there's a lot more we can do
to make teaching less isolated, let them benefit from one
another. And that spans all the way from the elementary to the
collegiate level.
In the extreme case, we're actually seeing--we're saying to
universities that--let's get all the great lectures online; and
so, say, a community college wouldn't have to do the lectures
in a subject like physics or chemistry, but they would do the
study groups, and they--so, they would take the world's best
lectures, but then do that. And so, education can be more
specialized and more efficient as we use the technology.
Senator Allard. Mr. Chairman, thank you.
And thank you for your testimony, Mr. Gates.
The Chairman. Thank you. Thank you very much.
Mr. Gates, when you were talking about ``interesting in
science,'' I was up at the Museum of Science in Boston not long
ago, and they had Mr. Ballard, who is a great oceanographer,
found the Titanic and the Bismarck, and the Lusitania. And he
was conducting--they had this submersible that--he was down in
the Galapagos Islands, and steering this--letting the students
steer the submersible through the Galapagos, with all of the
sea life that was there, and they had 600 inner-city children
in that auditorium. You could hear a pin drop--absolute pin
drop, the interest these children had. And then they had--I saw
a fellow named Lesser, who was the principal cellist for the
Boston Symphony Orchestra, talking about the sound, how sound
moves through the air when he played his cello, in a room with
50 inner-city schoolchildren. And the fascination, the opening
of the mind, about--interest by these children in both music
and in technology and science--unlimited. How we get that kind
of interest is going to be the challenge. But you've reminded
us about this.
Let me quickly go into another subject. Mary Robinson,
President of Ireland, head of the World Health Organization,
met with a number of us. She's very concerned about just this
brain drain to the United States, particularly in health, in
health professions. She pointed out that the flow, for example,
at a time when we have eight or nine applications for every
nursing slot in my State of Massachusetts at community
colleges, we can get one applicant that can take it, because we
don't have the training facilities, we don't have the
professors for the training of nurses. And we're considering an
amendment on the floor now on the homeland security bill to
increase the number of nurses on this.
Now, here are some of the countries. Nigeria, we have 2,500
doctors here from Nigeria, and 8,900 nurses. From South Africa,
we have 1,950 doctors, 877 nurses. In Kenya, HIV rate, 15
percent, 865 doctors, 765 nurses. Ghana, HIV rate, doctors,
850, 2,100 nurses on this. Her point was, they--many of these
countries around the world, so many of these doctors and the
nurses, health professionals that are so vital, in terms--
trying to deal with the challenges of healthcare, are here in
the United States--are coming to the United States, working in
the United States. This is costing these countries--they're
training these people. It's an outlay for--training them. How
do we balance this, versus what you've said about, sort of, the
openendedness, in terms of having skilled people be able to
come into the United States? What's really the--where do we--
where do we really begin to draw the line? When do we say,
``Well, we're going to try and invest more to develop more
opportunities for Americans to become nurses, Americans to
become the doctors of''--we have qualified people that don't
get into our great medical schools or to our nursing. But
what's the balance in there?
Mr. Gates. Well, the--when foreign labor comes to the
United States, there's this incredible benefit to the country
that they come from of the remittances they send back to the
country. And that's a huge thing, in terms of bootstrapping
those economies, letting them send kids back there to school,
and having the right nutrition, and great things. So, I don't
think the right answer is to restrict that ability to come and
earn a high wage and have that go into the economy that they
came from.
Clearly when you get shortages like that, the systems like
the community college system are usually quite responsive in
creating capacity and meeting that demand. I'm not an expert on
the nurse situation in----
The Chairman. Yeah, that's OK.
Mr. Gates [continuing]. In this country. I do know that, as
we think about global health outside the United States, and
people have talked about this, this talent drain, I don't think
putting restrictions on letting people come and work would be
the way to solve that, because there's other countries that
they would end up going to. And what you need to do is deal
with the supply.
Also, many of the medical inventions that we need, need to
be things that don't require an expensive healthcare system,
because the reason many of those people are leaving those
countries is that the healthcare system doesn't use their
talents very well; that is, they don't stock drugs properly,
they don't have electricity, and a number of these things. And
so, getting those countries to invest in healthcare, and having
things like vaccines that can actually be given without
advanced medical training--for example, if we had an AIDS
vaccine, which is a very tough thing, we'd greatly reduce the
burden on those healthcare systems. In fact, if we had a
malaria vaccine, that would have this amazing effect to free up
that capacity for dealing with other health problems, because
that actually puts more people in these hospitals in many
countries than anything else. I'm optimistic about the vaccines
coming along, and that those will change--get rid of the
unbelievable overload in the health budgets of these countries.
The Chairman. Just one additional point. In the H-1B there
are provisions in there where they pay a fee into a fund so
that they train Americans and upgrade their skills as a part of
the H-1B.
Let me, just finally, ask you this. You've given a number
of recommendations on competitiveness, immigration, others, in
education. What's your--just if you could summarize your sense
of urgency--how much time do we have? I mean, what are we--
what's the framework, where would you say, as somebody that's
obviously thought about this a good deal, has specific
recommendations, and is familiar with these forces in other
parts of the world? What guidance can you give to us about the
sense of urgency? I think for--all of us who deal with
education think every day that's gone by with a lost child--for
a child to lose that opportunity for learning is a day that
probably can't be recaptured. There's a sense of urgency, in
terms of education. Years go by, we lose these opportunities.
What's your sense, just in terms of the country and
competitiveness, what's happening in other parts of the world?
Mr. Gates. Yeah, I think both of these are incredibly
urgent issues. Education, because, as you say, it takes a long
time, and so, you might--you've got to get started now,
improving the teachers and trying out the new incentive
systems. Even if it's going to take decades, the sooner you get
going, the better.
In the immigration case, it's much more of an acute crisis,
in that the message is clearly here today that you come to the
United States, go to these great universities, and you go back,
and not only take your very-high-paying job, but also all the
jobs around it back to another country. Other rich countries
are stepping up and showing the flexibility to try and benefit
from the way we're turning these people away. This country
benefits in every way by having these very-high-paid jobs here
in this country. If you talk to a student who's in school
today, going to graduate in June, they're seeing that they
cannot apply until they get their degree, and, by the time they
get their degree, all those spaces are gone. If somebody's here
on an H-1B, if you're from India, say, with a bachelor's
degree, the current backlog would have you wait decades before
you could get a green card. And, during that time, your family
can't work, there's limits, in terms of how you can change your
job. There was one calculation done that you--the fastest way
to get a green card is to have a child who becomes a United
States citizen, and then your child sponsors you to become a
U.S. citizen. That's because it's--there's more than 21 years
in some of these backlogs.
So, this is an acute crisis. And it's a thing--as you say,
there's fees paid. And Microsoft makes no complaint about those
fees. We end up paying a lot more to somebody who comes in for
these jobs from overseas than we do to somebody domestically.
We have every reason--we have 3,000 open jobs right now. We're
hiring the people domestically, every one that we can. In fact,
there's a great competition. This wage rate continues to go up,
as it should. And the wage rate for this type of skill set is
not that different in other countries. It's escalated very
rapidly in India and China, and particularly if you include the
tax costs and the infrastructure costs that we pay to support
this kind of job in those countries. This is not about saving a
ton of money for a top engineer, this is about being able to
put them here in this country, where the other skill sets
around them are the best in the world. And there's not a
shortage in those other skill sets. India and China haven't
yet, and it'll take them a long time before they're as good at
the management, testing, marketing elements that go around
those engineers.
So, this is an acute crisis, and one that, in terms of the
taxes these people will pay, the fees that get paid around
them, is fiscally accretive to the United States immediately,
in terms of what happens. To me it's a very clear one with
basically no downside that I can see whatsoever.
The Chairman. Good. Lamar.
Senator Alexander. Thank you, Mr.----
The Chairman. Senator Alexander.
Senator Alexander. Thank you, Mr. Chairman.
Two comments and a question. One is, you've been a very
eloquent spokesman for what I like to characterize as
insourcing brainpower, and, I think, helping our country
understand that insourcing--we talk a lot about outsourcing
jobs, but insourcing brainpower is insourcing jobs, too, which
is a--which you've said several times today, and which is a
point we don't make as well.
Second comment. In our little discussion about teacher
incentives, where we were talking about this area--this
difficult area of finding fair ways to reward teachers and
school leaders who excel, and that how a good way to do that is
not to impose, suddenly, a big system, but to encourage this
effort across the country, where communities are, as a--New
Leaders for New Schools is, in Memphis, for example, and they
pay a third of the principals $15,000 more if they go to
Wharton and learn--and they stay a part of the system and learn
to be leaders. And the teachers make $6,000 more if they're
highly effective teachers and their low-income kids improve.
So, the point being that one of the big differences between
today and 20 years ago is that we now have a number of ways to
measure student achievement. Dr. Sanders was at the meeting
Senator Kennedy hosted yesterday. And there are other methods.
And because we're now able to say, ``This low-income child in a
New York school is making great progress because this teacher
consistently helps that,'' then there's a--perhaps a fair basis
for rewarding that teacher or that school leader. Because we
can see improvement.
And so, I hope--the reason I bring that back up--and here's
my question--is because that's a scenario where I think we can
hopefully move ahead with a teacher incentive fund, and perhaps
you and others in the private sector can do the same over the
next 5 years, and we can work in parallel and learn from one
another.
Here's another area. We have long lines at two-thirds of
the places around our country of people who don't know English,
who want to learn English. Now, I'm not talking about making
people learn English, or English only. I'm talking about the
huge number of people who live here, who don't speak English,
who want help learning English. And the Senate adopted my
amendment to give $500 grants to prospective citizens who want
help learning English so they could take it to the PUENTE
Learning Center in Los Angeles or other places, where, for $500
you can learn English pretty quickly.
So, I've had on my mind for many years, and I'm going to
put this in legislation, but it'll be hard to do in government,
that if we had $100-million bank, or 200 or whatever amount,
and we said to virtually anyone who's living in the United
States, ``If you want help learning English, we'll give you a
$500 voucher, which you can then spend at any one of--at any
accredited center for learning English, with the hope that
you'll 1 day pay it back.'' My--``no strings, just with the
hope that 1 day you'll pay it back.'' My guess would be that
that bank would grow, over 5, 10, or 15 years, to be a very big
bank that would turn over and over and over again, providing an
easy way for people, who needed a little help, to learn
English. So, I wanted to take advantage of you today by--since
you're here--by suggesting that idea to you, that I'm going to
introduce it in legislation here, but it'll have--it'll run
into a lot of problems if we try to set it up, with all the
government rules and regulations and accounting. As a purely
private matter, a bank to help people learn English, which we
hope they would pay back, I think would be--help equal
opportunity, it would help improve our workforce, and it would
be a big help toward national unity by encouraging our common
language, but not in any sort of coercive way.
Mr. Gates. Yeah, in terms of teacher's innovation fund,
I'm--as I said in my comments, I'm a big believer in that,
because having the money that lets you try out merit pay be
viewed as incremental allows people to go along with it, even
if, in the early days, they think, ``OK, the system is
unproven,'' and they're worried about that, at least they're
not being told, from the beginning, ``Hey, we're taking it''--
it's purely zero-sum, even when the system isn't proven. The
fact that during that experimental phase, it's incremental,
then they see that they are not a loser, and they see, ``OK,
here's Federal money that we don't get unless we do a merit-
based system,'' so it'll encourage experimentation. And I do
think there are--in these labor-practice areas, we should have
100 such experiments, because I think 90 of them won't work.
We're certainly not at the point where you can test people
going into a class--have them take a class, and test them going
out, and just pay the person based on, ``OK, here's the delta
in those test results.'' It's too--the testing is good. We know
a lot more. But at that level of granularity, it's not viewed
as predictable enough to put a huge reliance on it. And so,
figuring out, ``OK, how do we supplement that? Do we have
teachers who come in and do evaluations anyway?'' A lot of
things should be tried there.
Terms of English, it is one of the advantages the United
States has. English is being adopted as essentially the second
language globally. Every country I go to, they're saying how
they've changed their education system to teach English at a
younger age, and they're proud of the percentage of people in
the country who speak English--not as a primary language, but
as a second language. And so, that is helping us. The demand
for English training as you say, actually demand is very high
today. People are moving to do that. There are some things on
the Internet that can help with that. There's some self-
training courses where the prices of those have come down.
I haven't thought about a way of encouraging people to do
that. It would be interesting to think, would you actually have
a lot more people who would learn because of that incentive?
What follow-on benefits might you get from that? Obviously, as
you think of different age groups, it's different. Kids going
into school, we want them to get comfortable in English very
quickly, because that could be a huge challenge to a school
system. And many of these urban school systems, it's
unbelievable the variety of languages that they have as native
languages. It's great, but it's a challenge for them. You need
some innovation and encouraging it would be good. For young
people, it's really actually quite necessary for them to
benefit from the education system.
Senator Alexander. Thank you, Mr. Chairman.
The Chairman. Senator Sanders.
Senator Sanders. Thank you, Mr. Chairman.
Before I ask Mr. Gates a question, I did--wanted to comment
that I thought your statement on nurses was right on. My
understanding is that we have some 50,000 Americans or so who
want to go to nursing school in the midst of a nursing crisis,
and can't get in them, because we don't have nursing educators.
The Chairman. Yeah, you got it.
Senator Sanders. And, in fact, that's what I want to talk
to you, on Friday, about the higher education bill. Just----
The Chairman. We'll do that on Friday. And be----
Senator Sanders. Right.
The Chairman. I'm sure Mr. Gates will be interested.
[Laughter.]
Senator Sanders. All right.
Mr. Gates, there--I think there is no debate that we have
got to focus a lot of attention on urban schools. How minority
kids are treated is a disgrace, and so forth. But what--I
represent a very rural State, the State of Vermont. And, by the
way, we'd love you to come up and say hello, visit us. It's
only 20 below, today, but it'll warm up in a few weeks.
In rural America, and in rural Vermont, we have situations
where there are not a lot of good-paying jobs. And kids don't
really get a sense of why they need an education, because they
don't see much in front of them. Kids are dropping out, kids
are doing self-destructive behavior--drugs, crime, so forth and
so on. What thoughts do you have about how we might be able to
revitalize education and create excitement in rural communities
around this country?
Mr. Gates. The Foundation schools, a very high percentage
of them are urban schools, because that's where we've seen--
where you've got the large minority populations, and you have
these super high dropout rates. I agree with you that the rural
situation is not some panacea. In fact, when we first got
involved, I said, ``Well, hey, if it's just urban, let's just
copy what they're doing in the rural areas.'' And, in fact, as
you say, it has some particular problems, in terms of the
breadth of teacher skills. Often, for political reasons, school
districts that should merge together----
Senator Sanders. Yeah.
Mr. Gates [continuing]. Do not want to merge together,
because that comes down to the point of, ``OK, we should merge
the schools to try to get scale,'' and that takes some
political leadership, because there's a hard choice there
about--as you have less students, how do you--how do you create
that critical mass? So, I do think there should be a lot of
school-district mergers--would help a lot in these rural areas.
There has been some work done by the Foundation in rural
areas, and I'll get them to write that up and send you and I a
copy of it.
Senator Sanders. Good.
Mr. Gates. We do think that the--some of these technology
things, where you can go and get great courses over the
Internet, and have even rural areas sharing with each other,
where one is very good at one thing, and one is good at another
thing, that those can be quite advantageous----
Senator Sanders. Right.
Mr. Gates [continuing]. Because--and in Vermont, you have
good broadband connectivity. Most of the schools are hooked up.
And so, it should be very possible.
Senator Sanders. OK, thank you.
The Chairman. Just finally, we have--Mr. Gates, we have
77,000 jobs that are waiting--in my State of Massachusetts,
probably 300,000 people are unemployed, and we've got 24
applications for every job slot existing today. I mean, under
our existing--listening to you talking about upgrading our
training programs and the education and ensuring people are
going to be upgrading their skills, there's a lot of work for
us to do.
This has been an enormously helpful hearing. You've raised
all of our sights, and raised our spirits, as well. And we're
going to be busy concentrating and learning from that extensive
testimony, and absorbing those recommendations. And I think
you've seen that the members of the committee have been
enormously appreciative of your taking the time to join with
us, and we look forward to keeping in touch with you as we move
forward on many of these initiatives. We'll value very highly
your ideas and recommendations, suggestions. And we have
benefited immensely this morning. We thank you very much for
taking the time.
The committee stands in recess.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of U.S. Representative Bill Pascrell, Jr., State of
New Jersey
I would like to thank Chairman Kennedy and Ranking Member
Enzi for convening this hearing on the vitally important topic
of strengthening American competitiveness. I also want to thank
the Chairman and Ranking Member for allowing me to submit my
testimony on the need for comprehensive H-1B visa reform.
I believe we must evaluate all options to strengthen
American competitiveness as we move forward. However, I feel
strongly that any such progress must include reform of the
broken H-1B visa system that is coming at the expense of
American workers especially those in the IT sector. Major
corporations are throwing labor standards out the window by
abusing this program.
The facts are clear and staggering. U.S. electronic
engineers and computer scientists have experienced higher
levels of unemployment over the past 5 years than in the past
three decades. In 2003, for the first time in history, the
unemployment rate for these professions exceeded the national
average. In fact, a study by the job placement firm Challenger
Gray and Christmas Inc. found that 16 percent of all U.S. jobs
cut this year were from high-tech companies. There are many
reasons for the high levels of unemployment for our Nation's
innovators, including the dot-com and telecom busts and the
general business climate against hiring. However, it is
apparent that the abuse of the H-1B visa program is a
significant and growing cause of low demand for U.S. high-tech
workers.
The abuse of the H-1B visa program has an obvious negative
effect of the competitiveness of the American worker. High-tech
workers who are laid off face extra burdens. They are more
likely to be unemployed for an extended period of time, which
means that they will lose hands-on experience needed to keep up
with the fast pace of technological change. If a high-tech
worker is out of work for 1 or more years, it is obvious that
he or she will be losing skills more rapidly than another
occupation.
In addition, the poor labor market is causing young
Americans to shy away from technology disciplines such as
computer science in significant numbers--students are
responding rationally to what they perceive as diminished long-
term prospects in those fields.
The poor labor market for tech workers is also causing wage
depression. For the first time in three decades, yearly
compensation actually decreased in 2003. It is clear that
employers are using H-1B visas in order to pay those visa
holders less than Americans of the same qualifications. INS
data of 2001 wage estimates show that the median salary for
computer-related H-1B visa holders is $50,000, while the
corresponding median for American workers in similar jobs is
$66,230.
The H-1B visa program plays an important role in the
American economy when it is used as intended--to allow the
hiring of skilled foreign workers when no American is
available. The current misuse of the H-1B visa, however, leads
to exploitation of foreign workers. They are vulnerable because
of their immigration status, and are subject to termination if
they speak up about their mistreatment.
In the 109th Congress I introduced the ``Defend the
American Dream Act'' to address the gaping loopholes in the H-
1B visa program. This legislation would protect American
workers by reducing the H-1B visa quota to its original level
of 65,000 per year. It would also substantially increase
protections of American and foreign workers by requiring
companies to actively recruit for American workers first and to
pay all workers the median wage in that industry. Finally this
legislation would greatly strengthen the Department of Labor's
ability to enforce the law--which is today nearly non-
existent--by allowing the Labor Department to audit and
investigate companies and to apply substantial penalties to
companies in violation.
I plan to reintroduce the ``Defend the American Dream Act''
this year as the number of American workers adversely affected
by the H-1B visa program continues to grow exponentially. We
must reform the H-1B program to give Americans the first chance
at some of the best jobs in our economy. I will continue to
work closely with my colleagues on the House side on this
significant issue and likewise I look forward to working with
members of this committee as we seek to undertake comprehensive
immigration reform. In conclusion, I will always believe that
any discussion on strengthening American competitiveness must
begin and end by addressing the concerns of American workers.
------
American Federation of Labor and Congress
of Industrial Organizations (AFL-CIO),
Washington, D.C. 20006,
March 6, 2007.
Hon. Edward M. Kennedy, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.
Hon. Michael B. Enzi, Ranking Minority Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, D.C. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: I wish to express
strong concern with the composition of the panel before the Committee
on Health, Education, Labor, and Pensions (HELP) for tomorrow's hearing
entitled ``Strengthening American Competitiveness for the 21st
Century.'' I am deeply disturbed that the panel consists only of Bill
Gates and excludes the voice of workers. Working people just elected a
Congress on a platform of economic justice; the least we expect is that
workers will be given a voice on matters that are at the heart of that
agenda. The way you have structured this hearing guarantees that you
will only be given the corporate perspective on this important issue.
Mr. Gates will no doubt once again advocate the massive expansion
of the H-1B guest worker program as a solution to keeping America
competitive. We could not disagree more.
Simply put, there is no justification for massively increasing the
size of the H-1B guest worker program, other than to continue to
provide corporations a steady stream of exploitable workers. Thai runs
completely contrary to an economic justice agenda and is not in the
interest of workers in our Nation. Guest worker programs like the H-1B
program are detrimental to all workers in the United States, both
American workers and foreign workers who are imported through the H-1B
program.
The H-1B program has become the preferred mechanism for employers
in professional and technical sectors to keep labor standards from
rising. As the National Research Council concluded, ``the current size
of the H-1B workforce relative to the overall number of IT
professionals is large enough to keep wages from rising as fast as
might be expected in a tight labor market.''
Congress adopted the H-1B program in 1990 as a means to assist
employers in addressing a temporary labor shortage in high-tech
industries. The program was never intended to address long-term labor
shortages. Seventeen years later, as unemployment rates in the high
technology sector have increased substantially, employers are still
calling for more increases in the number of temporary foreign workers
that they can import into the U.S. labor market.
The AFL-CIO repeats its call for policymakers to focus attention on
the true solution to current and anticipated skills shortages in the
high-tech and information technology (IT) sectors: training of current
workers, investment in educational opportunities, and reform of our
permanent employment-based immigration system.
The primary focus for policymakers and for industry should be to
ensure that our workers are prepared for job demands of today, to
predict future skills needs, and to encourage government, industry, and
labor to work together to ensure that our workforce is fully prepared
to meet those needs. Instead of tackling these important policy
challenges, the simple expansion of the H-1B temporary foreign worker
program shifts attention to a program with little agency oversight that
is readily susceptible to fraud and abuse of U.S. and foreign workers
alike.
The Government Accountability Office (GAO) has issued several
reports related to the H-1B program. It issued a report in June 2006
that focused on Department of Labor (DOL) oversight of employers'
compliance with H-1B program requirements, which are the only
safeguards against abuse and displacement of workers. GAO concluded
that the DOL ``does not use its full authority to oversee employers'
compliance with programs requirements'' and that it ``lacks quality
assurance controls and may overlook some inaccuracies.''
We recognize that even with necessary investments to training and
educational opportunities in the fields of math and science for our
domestic workforce, employers may still encounter long-term labor
shortages. The answer to those shortages should not be the expansion of
temporary worker programs that are failing American workers, but rather
a reform of our permanent employment-based visa system.
The permanent employment system isn't working, mainly because it is
based on a system of arbitrary caps that are the result of political
compromise that have no relation to economic realities. The current
number of visas available, for permanent jobs 140,000 per fiscal year,
was set by Congress more than a decade ago and has not changed. While
economic demands certainly have changed, the fundamental policy behind
our permanent immigration system remains valid. Employers that
demonstrate they cannot find workers in the United States to do jobs
that are permanent (that is, not seasonal or temporary in nature)
should be able to bring in foreign workers under conditions that
guarantee that there will be no negative impact on the wages and
working conditions of other workers in that industry. The key to
protecting U.S. labor standards is to ensure that new foreign workers
come in with fully enforceable rights.
It is irresponsible for Congress to contemplate yet another
increase in the total annual number of H-1B visas available when it has
done nothing to address the myriad and well-documented problems
associated with the H-1B temporary worker program. Nor is it
responsible for Congress to allow corporations to import more and more
workers under conditions that have detrimental impacts on entire
industries instead of focusing its energy on finding long-term
solutions that involve access to training and educational opportunities
for domestic workers, and on reform of our permanent employment-based
immigration system.
Sincerely,
Linda Chavez Thompson,
Executive Vice President, AFL-CIO.
[Whereupon, at 11:35 a.m., the hearing was adjourned.]