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Copyright 1999 The National Journal, Inc.  
The National Journal

July 3, 1999

SECTION: EDUCATION; Pg. 1951; Vol. 31, No. 27

LENGTH: 2526 words

HEADLINE: Silicon Valley's Reform Bug

BYLINE: Neil Munro


High-tech is wading into the debate over how best to revamp
public education.


     Across the nation, many high-tech companies donate new
and used computers, software, and employees' expertise to
schools. Microsoft Corp., for instance, has distributed copies of
its software programs valued at tens of millions of dollars if
sold retail, while many smaller firms, such as BTG Inc. of
Fairfax, Va., give away a steady trickle of surplus gear to local

     Cisco Systems Inc., the San Jose, Calif.-based developer
of Internet communications gear, has gone a step further by
creating academies within 1,000 high schools around the nation.
At these academies, roughly 17,000 students are learning to
modify and repair Cisco's complex Internet technology. The
curricula and tests are controlled by Cisco, which has spent more
than $ 20 million on the effort. The training will provide good
jobs for the students and boost Cisco's sales when the students
join the work force. Microsoft has created similar centers at
more than 1,800 schools.      More controversial is the role played in California by a
gowing number of high-tech executives who are using their own
money to promote statewide education reform. Perhaps the first on
the scene was David Packard, heir to a fortune generated by the
Hewlett-Packard Co.--long considered the wellspring for Silicon
Valley's high-tech expertise. Beginning in the mid-1990s, he
promoted children's literacy by retraining teachers in
''phonics'' teaching techniques and by donating reading material.

     Ron Unz, who made his millions selling software designed
by his Silicon Valley firm, Wall Street Analytics Inc., played a
far more controversial role by spending roughly $ 1.2 million--
including about $ 700,000 of his own money--to win voter support
in June 1998 for Proposition 227, which he authored. This
initiative, which largely barred bilingual education, was
strongly opposed by teachers groups and nearly all major
Democratic and Republican officials. ''Sometimes, very
straightforward ideas make sense,'' said Unz, who points to
recent exam results showing sharp improvement among some students
removed from bilingual classes.

     Reed Hastings, another Silicon Valley executive, spent $4.5 million of his own cash to get his charter-school initiative
qualified for a ballot in 1998. Hastings, who was backed by the
Technology Network, a high-tech industry lobbying group in
Silicon Valley, and by other business groups, used the ballot
initiative to force an agreement in May 1998 between the state
legislature and education groups. The resulting law raised the
state's cap on the number of charter schools to 250, and allowed
up to 100 more charter schools every subsequent year, thus
increasing competition among the public schools. ''We don't know
how to educate . . . but we do know the value of competition,''
said Roberta Katz, president of the Technology Network.

     Next, the Technology Network wants to offer voters two
initiatives that would allow charter schools to use public school
facilities, and allow bonds for education spending to be approved
by a simple majority, rather than two-thirds, of voters. ''There
was a time when we thought the answer was to put computers on
desks . . . (but) we understand there is a lot more to improving
education,'' says Technology Network vice president Michael

     Meanwhile, Timothy C. Draper, a venture capitalist with
Draper Fisher Jurvetson in Redwood City, Calif., is proposing an
initiative that would create education vouchers. He estimates
that it will take $ 2 million to get the initiative onto the

     In these California battles, entrepreneurs in the high-
tech industry are driven by a mix of corporate strategy and
personal motivation, said Unz, Draper, and others. For example,
Hastings and Unz spent their money with no expectation of
profits, while many business officials invest in education
because of their worry that shortages of skilled labor will crimp
their companies' growth. ''We don't have much of a farm team
developing in the K-12 area,'' said Draper. These hard-nosed
corporate warnings, however, usually coexist with a concern for
students in poor schools. ''When you do something for somebody,
it comes back to (benefit) you . . . . I don't know why, it just
comes back,'' said Draper.

     Education groups have opposed most of these measures,
especially the Unz and Hastings initiatives. ''They've made a lot
of money in a short time, and I suppose they are looking around
for things to do,'' said Tommye Hutto, a spokeswoman for the
300,000-member California Teac and fourth-ranking member of the
House GOP leadership. Boehner's job for the previous four years
had been to act as a strategist and communicator of the
Republican agenda. In the ancient tradition of killing the
messenger, the Conference voted to oust Boehner from the
chairmanship and replace him with Rep. J.C. Watts, R-Okla.

     But while Gingrich has been banished and Linder has
nearly vanished (the House Rules Committee is his only
assignment), Boehner has suddenly resurrected himself by
designing what has quickly become the House Republicans' only
attempt at a health care policy agenda. And, said sources, this
is just the first step of Boehner's climb back into higher
positions of influence within Congress--and possibly beyond.

     From his new post as chairman of the House Education and
the Workforce Employer-Employee Relations Subcommittee, Boehner
has seized on the panel's jurisdiction over employer-sponsored
pension and health care plans to develop eight bills
restructuring the managed care and health insurance industry.

     Those policy areas normally fall within the House
Commerce Committee's purview. Boehner, however, coordinated the
introduction of eight managed care bills, sharing the sponsorship
credit with other Republican lawmakers, and quickly voted them
out of his subcommittee. Members of the Commerce Committee,
including Chairman Tom Bliley, R-Va., stood flat-footed as their
jurisdiction was ripped out from under them.

     And Boehner, only six months after being ousted from the
House leadership, even won a blessing for his health care efforts
from Speaker J. Dennis Hastert, R-Ill., who headed the Republican
Health Care Task Force during the previous Congress.

     ''He outmaneuvered Bliley and (House Ways and Means
Health Subcommittee Chairman Bill Thomas, R-Calif.) by developing
his agenda,'' said a top health care lobbyist. ''The leadership
turned to Boehner because he had a plan. He gave the leadership a
tangible, appropriate bill to proceed with.'' Another top health
care lobbyist said of Boehner: ''He's taken control of one of the
diciest issues of the year. He took it, grabbed it, and did it in
a way the Speaker was comfortable with.''

     Health care-watchers were stunned by the quick and
decisive actions of Boehner and other members of the Education
and the Workforce Committee, which has long been a bit player in
health care policy compared with the Commerce and the Ways and
Means committees. But none of the House members, aides, or
lobbyists interviewed said they were at all surprised that it is
Boehner leading the charge. He is, after all, a former House

     The consensus is that the Education and the Workforce
panel members, some of whom are the most obscure and weakest
members of Congress, would never have stepped ahead of Commerce
or Ways and Means if Boehner had not returned. The subcommittee
markup on June 17 would never have happened, they said.

     Granted, Boehner still faces several intraparty obstacles
to moving the Republican health care plan out of the full
Education and the Workforce Committee. Moderate Reps. Charlie
Norwood, R-Ga., Marge Roukema, R-N.J., and Jim Greenwood, R-Pa.,
and other committee Republicans, favor elements of the Democrats'
managed care reform plan, especially provisions expanding the
legal liability of negligent health insurers and allowing doctors
more input in patient care. Boehner is negotiating with those
Republicans to reach a compromise.

     And Bliley, whose committee also has Republican members
who support elements of the Democrats' proposal, promised that
his panel will get back in the game after months of largely
fruitless negotiating. Referring to Boehner, Bliley sternly said
in an interview: ''He's staked out that jurisdiction. But we will
be sure to take back what belongs to us.''

     Boehner's health care bills have little chance of
becoming law, or even of passing the House, because of the
Republicans' mere six-seat majority. But he has succeeded in
finally giving House Republicans a health care agenda, which is a
huge victory in itself.

     The Democrats want to make health insurance plans subject
to economic and punitive damage awards for their care decisions.
As an alternative, Boehner has proposed that disputes between
patients and their health plans be settled by an independent,
external reviewer--usually a doctor in that specialty of care--
not the courts. The decisions of those external reviewers would
be binding. Health insurers are willing to swallow such a review
process if it helps them avoid the liability reforms that
Democrats have proposed. (Democrats also include external
reviewers in their proposals, but argue that health plans should
still be legally liable--as all other businesses are--for
negligent behavior.)

     To be sure, Democrats continue to pound Republicans
relentlessly in the political battle over ''patients' rights.''
But Boehner has developed an agenda to serve as the Republican
counterpunch. Compared with last year, the degree of confidence
among House Republicans in fighting the rhetorical battle over
managed care reform has improved dramatically. The ability to
instill such confidence in the troops is the kind of thing that
could catapult Boehner back into a higher leadership position.

     Boehner's allies argue that he was unfairly blamed for
the Republican losses in the 1998 elections. Sources who were
close to Boehner at the time say he had little influence on the
actions of the three Republicans above him: Gingrich, Majority
Leader Dick Armey, and Majority Whip Tom DeLay, the latter two of
Texas. Boehner, according to these sources, was merely
responsible for communicating the flawed actions of his superiors
in a positive light.

     Boehner's allies also maintain that last year he told
Gingrich, Armey, and DeLay that Republicans had to run on an
agenda of accomplishment; and he allegedly counseled against
being ''overzealous'' in the prosecution of the case against
President Clinton. ''In the old environment, the mistakes of
Newt, Armey, and DeLay became the mistakes that he, in part, was
blamed for,'' said a GOP aide sympathetic to Boehner.

     Boehner made himself an enemy of House Transportation and
Infrastructure Committee Chairman Bud Shuster, R-Pa., by actively
opposing his plan for more highway and transit spending in 1997.
Shuster aides even claim that Boehner, while sitting in the
Speaker's chair, banged the gavel early to end a crucial House
floor vote in which Shuster lost by two votes. Late last year,
Shuster became the primary vote counter--and whipper--for Watts'
bid to dethrone Boehner. And Shuster rarely loses.

     Education Committee Chairman William F. Goodling, R-Pa.,
is expected to retire after this Congress, and the committee
Republicans who are senior to Boehner--besides Roukema, who wants
to chair the Banking and Financial Services Committee--are not
strong ''leadership'' types. So Boehner may make a run for the

     Meanwhile, things are not going so well for the House
leadership these days. If heads are lopped off once again,
Boehner's allies say that his initiatives on health care reform
have allowed him to showcase his leadership skills and emerge
from under the large shadow cast by Gingrich, Armey, and DeLay.
He's pursuing his own agenda now, not theirs. ''People realize
that Boehner's level-headedness and strategic thinking is
somewhat missing from the current leadership,'' said a Republican

     In addition, Boehner derives lasting strength from his
ability to help other Republicans in an election pinch. Rarely
facing a serious challenge for re-election in his overwhelmingly
Republican district, Boehner is nevertheless a prolific fund-
raiser. He still maintains his leadership political action
committee, called the Freedom Project, which allows him to help
elect new House Republicans, who might return the favor some day
by voting him back into a leadership post.

     Boehner is also tight with business lobbyists and has
carried their agenda on a range of labor-related issues. Last
year, he was a key player in launching the congressional
investigation of the Teamsters Union and acted as a broker on the
financial services modernization bill, although the leadership
has kept him at arm's length on the latter issue this year. A
Freedom Project party in March at Polly Esther's bar in
Washington raised more than $ 300,000--not bad for someone
recently ousted from the Republican leadership.

     ''It was remarkable,'' said a lobbyist who attended. ''It
was the exact opposite of the Washington stereotype that 'all
your friends leave when you lose.' It was crowded, with loud
music. John was there, smoking his cigarettes.''

     And then there is the subtle talk among Boehner allies
that he may set his eyes on becoming Commerce Secretary, or
holding another Cabinet position, in a George W. Bush

     Some of his House colleagues said that Boehner was
disappointed by his leadership election loss. But, these
lawmakers add, he did not sulk. ''I had worried that when he
lost, he might lose interest,'' Goodling said. ''But he's studied
hard to master (health care). He's done a tremendous job.''

     A health care lobbyist said: ''He clearly picked himself
up from disappointment and dived right back in. And that shows
some leadership on his part.''

     So what's at the core of Boehner's resurrection? ''John
likes to be a player,'' said another lobbyist. ''He wants to be
in the middle of something big. (Health care) gives him the
chance to be in the cross fire--and to try to fix it.''

     As for Boehner himself, he declined to comment on what
lies ahead for him. When asked during an interview if he had
''resurrected'' himself, he smiled, took a drag on his ever-
present Barclay cigarette, shrugged his shoulders, and exhaled.
He would say only that he plans to remain focused for now on his
subcommittee chairmanship.

LOAD-DATE: July 07, 1999

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