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As the School-Reform Debate Heats Up, Where's Business?

When President George W. Bush promised to make education reform a keystone of his agenda, Corporate America cheered loudly. After all, business has complained of a skilled-worker shortage for years. In meetings with top White House aides, CEOs rushed to pledge lobbying money and muscle to help pass Bush's education package.

But with the debate over school reform getting heated, business' resolve is being tested. And the early evidence is that as the going gets tougher, the suits are playing hooky.

The Senate is scheduled to debate education proposals during the week of Apr. 23, and even pro-reform forces disagree on what to do. Democrats complain that Bush's education budget is too stingy. Corporate America won't weigh in on the Prez's voucher plan or his effort to consolidate federal school-spending programs--two fights that have stirred up a hornet's nest of special interests. "Frankly, we don't have total consensus" on those issues, concedes Thomas J. Engibous, chief executive of Texas Instruments Inc. Instead, business is throwing its weight behind W's call for more pupil testing. But even that seemingly benign issue is highly contentious.

To make good on their pledge to back Bush, business lobbyists formed the Business Coalition for Excellence in Education, an umbrella of some 70 companies and trade groups including AT&T, Microsoft, and State Farm Insurance. "We're more committed to this than we've ever been," says Rhett B. Dawson, president of Information Technology Industry Council. "We're not going to run at the first whiff of gunpowder."

Corporate America has never been a player in Washington's education debate, though, preferring to focus on schools at the state level. School-reform success can't be measured in dollars and cents. And when it's time to twist lawmakers' arms, business leaders often don't put their mouths where their money is. For example, the coalition promised to bring in 50 CEOs to blitz Capitol Hill on Apr. 4. Only 30 showed. Moreover, business lobbyists are injecting themselves into an ideological debate with such groups as teachers' unions, the Religious Right, and civil-rights groups, all of which are more experienced at hardball education politics.

STICKING POINTS. Take testing. Bush wants states to test students in grades 3-8 in math and reading every year. But liberal groups say standardized tests discriminate against minority and low-income pupils and shouldn't determine whether a school gets federal dollars. Conservatives fear Bush's testing program is a first step toward a national school curriculum and loss of local control. And governors complain that the $320 million Bush has set aside to pay for new tests won't cover their costs.

But if testing rules are eased--and states are allowed, say, to test only their better students--"that will result in a lot more testing and not a whole lot more useful information," warns Andy Rotherham, director of 21st Century Schools Project, an education forum for moderate Democrats. "You need business to do some heavy lifting if you want to get a strong bill passed."

So far, business hasn't had an impact. The coalition, with no staff or budget, relies on such groups as the National Alliance of Business and the Business Roundtable for resources. "I haven't had as much involvement from the business community as I'd like," says Senator James M. Jeffords (R-Vt.), who heads an education panel. Senator Judd Gregg (R-N.H.), a leader on education issues, is more blunt: "If business doesn't see a bottom-line effect, they don't get involved." Time is running out for corporate execs to prove him wrong. Since China hasn't yet been admitted to the WTO, Congress needs to renew normal trade relations in June. But with anti-China sentiment growing in Congress, free-traders fret that vote will go the wrong way. So they're counseling angry colleagues to seek retribution by opposing China's bid to host the 2008 Olympic Games instead. House Democrat Tom Lantos and Republican Christopher Cox, both of California, have introduced such a bill, and it's gaining steam. Cox thinks the nonbinding vote could influence the International Olympic Committee, but otherwise, it's completely symbolic. Speculation about whom President Bush might nominate to the Supreme Court often points to a man working just up a flight of stairs from the Oval Office--White House Counsel Alberto Gonzales. But the former Texas Supreme Court Justice is coy about it. "I don't intend to be a candidate for the court," he says. Does this rule him out? Not entirely. Asked whether he might be named anyway, Gonzales says: "You'd have to ask the President about that." Washington lobbyists could be feeling the effects of the tech slump. The powerful, 1,100-member Telecommunications Industry Assn. reports that companies have been slow to pay dues this year. TIA President Matt Flanigan says only about 40% had done so by Apr. 1. A round of dunning phone calls brought receipts up to 65%. Is a trade-group shakeout looming?

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