Remarks in a Discussion at Cisco Systems, Inc., in San Jose, California

The President. I'm thrilled, John. Thanks for coming. This is going to be an interesting discussion, I hope, for you, because it's going to talk about how America intends to shape our future and not fear the future. That's what we're really here to talk about—interesting challenges facing the country.

Yesterday—one reason you're so nice is because I invited him to lunch at the White House yesterday. [Laughter]

John T. Chambers. Thank you.

The President. He and Elaine came, and we had lunch with Hu Jintao, the President of China. And sitting there during the lunch, I was thinking about people's fears about whether or not we can compete against a country like China. If you really think about a global economy and a global world—there's some folks that say, "Well, maybe we can't compete in the long run." My attitude is just the opposite. Not only can we compete, we must compete and remain a leader of the world.

And that's what we're here to talk about—how you do that. And before we do that, I do want to thank John and the good folks here at Cisco for hosting us. It's not easy to host the President. [Laughter]

Mr. Chambers. That's for sure. [Laughter]

The President. Our entourages are quite large. [Laughter] But I thank you for having me. I am excited to be at one of America's most innovative companies. And I was asking John—20 years ago, how many employees were there? There were zero. Ten years, maybe 6,000; today, 47,000 highly trained, highly competent, skilled folks that are helping to change America and countries around the world as well. So thanks for having us. It's wonderful to be in entrepreneurial heaven.

I also am honored to be here with the Governor. I cannot thank you enough for coming, Arnold. It's really thoughtful of you to be here. He is a—really an interesting man, a person—[laughter]. He didn't have to run for office but chose to do so, and I admire that in you. I admire somebody who doesn't always take the comfortable way in life, in order to serve something greater than himself. And I appreciate your service; I really do.

Traveling with me today is Norm Mineta, a Cabinet Secretary. Mr. Secretary, thank you for coming. Norm Mineta is a person who has been able to—[applause]. He said, "I'm glad to fly on Air Force One; I just wished you would have landed at Mineta Field." And his son, David, is here today. More importantly than son David being here, is tomorrow, I think, is David's daughter's birthday. So we've got the grandfather and the father. Thank you all for coming, and thanks for serving the country so well, Norm.

I appreciate Mayor Ron Gonzales of the city of San Jose joining us. Mr. Mayor, thank you for being here. I appreciate your time. I want to thank my friend Floyd Kvamme, who is the cochair of the President's Council of Advisers on Science and Technology, as well as George Scalise, who is with us as well. Thank you all for serving. I appreciate—there is Floyd; thanks for coming. And Lezlee Westine—it's good to see you, Lezlee. Thank you for coming; appreciate your service in my administration.

Our economy is good. It's real good, and we intend to keep it that way. The fundamental question is, though, can it be that way 5 years from now or 10 years from now? And my answer is, absolutely, if we do some wise things. I happen to believe it's wise to keep taxes low so that people have incentive to invest and save and spend.

I know we're going to have to do something about energy. I aim to be a competitive nation. Part of a competitive agenda means that we have got to deal with problems short-term and long-term, and we've got a problem when it comes to our dependence on oil. I know the folks here are suffering at the gas pump. Rising gasoline prices is like taking a—is like a tax, particularly on the working people and the small-business people.

I pledge to the people here of California that if we find any price gouging, it will be dealt with firmly.

I also recognize that our dependence on oil, and in the fact that we live in a global economy, is causing gasoline prices to go up. And the fundamental strategy to keep us competitive is to get off oil. Tomorrow I'm going to be in Sacramento to talk about your very innovative idea of hydrogen-powered automobiles. I'll be talking about plug-in hybrid automobiles that will enable people to drive on electricity for the first 40 miles. I'm going to be talking about our investment in ethanol to make sure—all of it, by the way, is aimed to making America competitive by changing our driving habits and our dependence upon oil.

We have got to do so for not only economic reasons but for national security reasons as well. It's really important for people to understand that as the Indian economy grows or the Chinese economy grows, they need fossil fuel. And as they buy fossil fuel, it affects our price. And therefore, it's in our national interest to diversify as quickly as possible away from our reliance upon hydrocarbons—particularly oil—when it comes to our automobiles. And I'm convinced we can do so when we put our mind to it.

A flexible economy, an economy that is not overregulated is going to be necessary to keep us competitive. But the most important thing, in my judgment, to keep us competitive is for the United States to remain on the leading edge of technology and to make sure we've got an education system that works.

First, let me talk about technology. I do believe it is a proper use of Federal taxpayer money to double the R&D commitment in—to physical sciences at the Federal level. I believe it makes sense to spend taxpayers' money on research and development out of the Federal Government, because I have seen what expenditure of that kind of money has done in practical ways. And so have you. You may not realize it, but it was investment by the Defense Department that ultimately led to the Internet, which has kind of helped your business a little bit, John. [Laughter]

Interestingly enough, tomorrow I'm going to be riding my bike in Napa Valley. I can't wait. I'll be plugged into an iPod. A lot of the reason the iPod exists is because of Federal research dollars. And therefore, I think it makes sense to spend your money on research at the Federal level in the basic sciences to make sure that the United States of America remains the innovative center of the world.

Secondly, I recognize that most money spent on research comes from the private sector. I suspect you spend a lot of money on research.

Mr. Chambers. About $3 billion a year.

The President. Three billion a year. I think it makes sense to encourage the private sector to spend the $200 billion a year we do total—$3 billion right out of Cisco.

One way to do so is through the Tax Code. The research and development tax credit makes a lot of sense. Interestingly enough, the research and development tax credit expires on a regular basis. And therefore, people have to come, hat in hand, to Congress and say, "Oh, save us." Unfortunately, it is difficult to plan for some companies if you're worried about whether or not the research and development tax credit exists.

Therefore, to keep us on the leading edge of change, to make sure we're the innovative capital of the world, Congress needs to make the research and development tax credit a permanent part of the Tax Code.

People have got to understand that if we don't educate our children in math and science, jobs are going to go to other countries. It's as simple as that. The jobs of the 21st century are going to require a skill level much different from when you and I got out of college. You did get out of college, yes? [Laughter] Look, I don't need to be talking; I barely got out myself. [Laughter]

I mean, face it, we've got to have a different set of skills. History may not cut it. Math and science are going to be vital to make sure that this country educates the engineers, the chemists, the physicists—the types of folks that John Chambers and Francois are going to be looking for to hire. That's what we're really talking about.

It starts, however, with making sure the public school system does its job in early grades. If I might, I'd just like to take a second to talk about the spirit behind the No Child Left Behind Act. I believe that the Federal Government should continue its role of providing money for Title I students, the poor students. I think that is a good use of your money.

However, I do believe that in return for the expenditure of that money, it makes sense for us to ask whether or not we're getting our money's worth. That means whether or not a child is learning to read and write and add and subtract. I believe strongly that every child can learn, and therefore, I believe there must be an accountability system in place to make sure that every child is learning.

And so we passed the No Child Left Behind Act. Believe it or not, it was a bipartisan measure. Sometimes that can happen in Washington, DC—not enough, I fully concede. But it happened in this case, where we passed the No Child Left Behind Act that says to California or Texas or any other State: "Develop an accountability system in return for this money to show us whether or not a child can read at grade level by the third grade and remain at grade level." That's not too much to ask, is it?

And so measurement is a central part, in my judgment, of holding people to account, of being able to figure out whether curriculum is working. We had all kinds of debates in Texas over the reading curriculum—what worked, what didn't work. The best way to determine what works is to have an accountability system. And that means the Governor or this local school board can say, "We were doing just fine when we compare how we're doing to the school district next door." Or if you're not doing just fine, it gives, at least, parents and those concerned citizens a tool to say, "You've got to change. Mediocrity is unacceptable. We're not going to accept the fact that children can't read by the fourth grade anymore in America."

If you're a reformer—Chambers is a reformer; he is unwilling to accept the status quo; he can't afford to accept the status quo in order to be competitive in this world. The accountability system gives people the opportunity to say, "We demand change."

Interestingly enough, there is an achievement gap in America, but it's narrowing. Our fourth grade African American kids and our fourth grade Hispanic kids are beginning to improve in measurable ways, and that's really positive for the future of the country. And for the teachers who are working hard to meet the challenges of No Child Left Behind, the Governor and I both thank you a lot.

We're doing fine in eighth grade math, by the way, because we measure. But when kids start heading into high school, the position of the United States relative to other countries for our beginning high school kids in math and science is not good enough. Like, we're 15th in the world, or something like that. We don't want to be 15th in the world; we want to be first in the world when it comes to teaching our children math and science.

So here are some ideas. First, we ought to apply the same rigor to math that we've applied to reading. In reading, we measure early, and we've got supplemental service money, which means after-school tutorial money available for children who are not meeting standards. In other words, we measure, and we correct. That makes a lot of sense. We need to do the same thing in junior high math. So the Federal Government is going to make supplemental service money available for students who are falling behind in math right before they get into high school.

That's one way to correct the problem, is to measure, to identify, and to solve. And that's what we intend to do through the new math initiative.

Second, we've got to make sure that we understand what works. And so I put together a national math panel with math experts that will help develop curriculum and teaching tools so that we can say to the States and local school districts, here's what the experts think. Instead of kind of grasping for what might be relevant and might work, we're actually calling people together who know what they're talking about—just like we did in reading—and say, here, here's what you need to try in order to meet the standards.

Thirdly, there are programs which work—and I bet you've got them here in California—and it's called the Advanced Placement program. It's a program that sets high standards and has classroom rigor. One of the problems we have is not enough teachers know how to teach AP. I'm going to ask the Congress to fund enough money to help train 70,000 teachers so they can become prepared to teach Advanced Placement.

I went to a great school in Dallas that— inner-city school; it's not one of these suburban deals; it's inner-city. And the principal claimed that they were the leading high school in the country in terms of kids passing AP. You know, Texans tend to, kind of, put it out there in a way that—[laughter]. Whether it's first or not, what mattered was, there was a group of kids from all walks of life, different neighborhoods, all of them passing AP in math and science. They are going to be the leaders of the future. They're going to be our scientists and our chemists and our physicists. And we've got to make sure that that opportunity is available in more classrooms.

Secondly, we went to a school the other day in suburban Maryland. There were two NASA employees there. These guys, as part of their job at NASA, were detailed to junior high classroom. And the reason why is—we call them adjunct professors—and the reason why is, is that sometimes it's not cool to be in the sciences. And these people make it at least seem relevant. And so we're going to attract 30,000 adjunct professors around the country to go into classrooms to say, "This is why science and math are not only cool but are the ticket to a great future for you."

We've expanded our Pell grants. There's now 5 million kids in America getting Pell grants. It's a million more than 5 years ago. And I'm a believer in Pell grants; I think they make sense. But at Tuskegee the other day, I announced a new initiative that provides additional incentive for high school kids who qualify for Pell grants to take rigorous course loads. As a matter of fact, in the first 2 years of college, if you take a rigorous course load in high school and maintain a 3.0 GPA, you'll get $750— up to $750 additional on your Pell grant and up to $1,500 additional in your second year. If you take math and science or a critical language in college and maintain a 3.0 GPA, you can get up to an additional $4,000 on top of your current Pell grant. And the idea is to say that we believe everybody can learn, and there ought to be tangible incentives to encourage children to get the skills necessary to fill the jobs of the 21st century.

One of the reasons I'm so pleased the Governor is here is because there needs to be a collaborative effort between the Federal Government and the State government and the community college system and the private sector in order for us to achieve this important national objective, and that is for there to be excellence in math and science all throughout our society. And so the Governor is here to talk about California's role in—to making sure that not only California is competitive, but that the country is competitive. When California does things well, it affects the country. And so when you are a part of this competitive initiative, it will help give confidence to others that we're doing the right thing.

And so, welcome. Why don't you share with us some of your thoughts about what you're doing here.

Governor Arnold Schwarzenegger. Well, thank you, Mr. President. First of all, I want to say congratulations on——

The President. On what?

Gov. Schwarzenegger. ——on really paying attention——

The President. Oh. [Laughter]

Gov. Schwarzenegger. ——to the competitiveness initiative.

[At this point, Gov. Schwarzenegger of California made brief remarks.]

The President. One part of the infrastructure that John Chambers and I talked about today was to make sure that broadband is available, high-speed broadband is available to nearly every American. And we're working it hard; we're making progress. I asked John today how we're doing. He said, "There is momentum, but we've got a lot of room to catch up in terms of being competitive. Others countries are doing— have done a better job than we have."

We're making progress. And the reason I bring it up is I just want you to know that I know it's important that we've got broadband highways all throughout the country so people can have access to it.

One of the interesting things that the Governor and I just saw was some of the amazing innovation that's taking place here in Cisco. So we get on—we're looking in the camera, and all of a sudden, up comes four people, and it's like they're right here. [Laughter] It was an amazing innovation that you're doing. And it just reminded me how important innovation is and why Cisco is doing well—it's because it's an innovative company with innovative people and an innovative CEO.

And so, again, thanks for having me. I'm interested in your thoughts.

Mr. Chambers. Mr. President, I think you said it right. The economy is good; jobs are good; and what we have today is because of our education from before. But we use network academies, and we put them around the world. It's a program that trains young people for getting jobs in the high-tech industry and using it in a practical way.

The President. Network academy—what does that exactly mean? Some guy listening out there isn't going to know——

Mr. Chambers. Well, there's a little bit of sizzle to it. [Laughter] What it is, is it trains people to build that highway that you talked about. And it trains people— instead of getting jobs in areas that really don't have much demand, you get jobs where there's a lot of demand. In fact, we can't meet it in this country. And they usually get 30 to 50 percent higher pay because they've done that.

The neat thing is, we're training 100,000 Americans in this area. The challenge is——

The President. Cisco is training——

Mr. Chambers. ——in network academies, with our colleges and high schools— so we generate the program. The challenge, however, is our competition globally is even moving faster on the math and science. China and India graduate 10 times the number of Ph.D.s we do. They have a population four times our size in each of those countries. We all—do the math; that creates a challenge for us. So it's about being the best and brightest in each of our organizations, and we have one of the students here who is just awesome at that. We've got to do better.

The President. Yes. Again, so you took it upon yourself as an interested corporate citizen to provide employees to train others?

Mr. Chambers. Started with a university system, an idea with one single employee, and we wired all of our schools, but nobody maintained it. So we began to train the students to maintain the system. It worked in one area, and then it spread globally.

The President. What John said is really interesting. It is very important for our citizens to understand that education helps you get higher pay.

Mr. Chambers. And jobs.

The President. And a job, yes. It's hard to get higher pay without the job. [Laughter]

Mr. Chambers. You got me. [Laughter]

The President. I know, you're building— [laughter].

Anyway, but people have got to understand that, one, it's not too late to go back to school. And secondly, there's a lot of really interesting opportunities to get the skills necessary to have the jobs that are going to be available in the 21st century. John Chambers just described one such avenue. You're doing 100,000 people—educating 100,000 people here?

Mr. Chambers. In this country—400,000 worldwide.

The President. I appreciate that. One of the interesting things about America is the fact that there are corporate citizens who understand the problem that America faces, and they're doing their part. It's amazing how much training goes on within corporate America, and I appreciate your leadership on this. And I hope others who are interested in making sure this country is competitive do their part, as well, to reach out and train people. Use your skills and your expertise to give people the skills necessary, so we can remain a competitive nation.

I suspect here in Silicon Valley there's a lot of job training going on, which is really important.

Mr. Chambers. There is. We train locally, but we also are taking something, Mr. President, I think you would find extremely interesting. We took the terrible hurricane experience in our gulf coast, and we're working with Mississippi to redo their education system. We're putting $40 million of our own money into building a 21st century education system. We'll start with 52,000 students, 7 school districts, and take one of the States who's probably 49th in terms of math and science and see if we can't make an example of where it goes, with the teachers becoming the innovators, with the students not having—[inaudible]. We'll put a wireless mesh over top of the whole community. And, literally, building our students not just to catch up but to lead in math and science.

The President. I appreciate it. It's a great gesture, thanks.

Added value in education can come in all different ways, as I said. And one such place is in our community college system. You've got a great community college system here in California. I know you're a strong supporter. Dr. Fong is with us, who is—tell us what you do, Doc. [Laughter]

Bernadine C. Fong. A lot of things.

The President. Well, you're the president of?

Ms. Fong. I'm president of Foothill College in Los Altos Hills. It's right near here.

The President. Right. Close friend, by the way, of Condoleezza Rice.

Ms. Fong. That's right—and Stanford buddies.

The President. She's doing well.

Ms. Fong. Yes, she is. [Laughter] Please say hello to her for me. And we'll keep her out of the NFL, if possible.

The President. That's right, yes. Please. [Laughter] I need her advice. [Laughter]

[Ms. Fong made brief remarks.]

The President. Explain the academy, how Cisco works with you. I think people will be interested in this—I'm interested in it. [Laughter]

Ms. Fong. The Cisco Academy is basically a degree program, and they will get a degree in network enterprise, and they will also get a Cisco certificate, and it trains individuals. We start, actually, with high school students. You've met two our students today who are Foothill students, but they're actually, currently also enrolled in high school. They want to be computer engineers ultimately, but they wanted to get a head start, so they're in our Cisco Academy.

[Ms. Fong made further remarks.]

The President. And it's called Cisco Academy because you helped design the curriculum?

Mr. Chambers. We designed the curriculum, but it's implemented through the colleges and high schools. There is no social promotion. The grades—everyone knows how you compare, both within the States and globally.

The President. See, what's interesting about the community colleges—and I know the Governor knows this—is that they're about as market-oriented as you can get. Community colleges are available; they're very flexible. In other words, the curricula can adjust depending upon the local needs. They're innovative. They're willing to take a Cisco program, implement it in the community college. They're very practical. In other words, they train people for jobs which actually exist.

And it's—[laughter]—it's vital, and I appreciate it. And I know the Governor understands that, and we understand at the Federal level. We've got pretty good grant money—$150 million in the '07 budget, coming to help train workers. I just want people to understand that if you're wondering whether or not you're too old to go back to college, you're not. There is plenty of money available to help you go back. And 2 years of additional education can enhance your salary a lot. It makes you more productive, and a more productive worker is one whose standard of living will go up.

The community college system is, I think, one of America's greatest treasures, and I appreciate you, Dr. Fong, for being here. Thanks for your—[applause].

Ms. Fong. Well, the Governor is also a product of our community college system.

The President. Is he?

Gov. Schwarzenegger. Absolutely, yes. Actually, I also want to just add that our community colleges are doing an extraordinary job with career tech and vocational education. It's really amazing the kind of things that they do. Because I think it is so important to recognize that, yes, we want to stress 4-year college, and, yes, we want to inspire kids to go to higher education and all this. But there are many kids that want to do—get into different professions. They want to be a carpenter or plumber, or they want to be a chef or a computer technician or a nurse—great professions with a great future and great salaries and all this. I think that community colleges here in the State are really doing an extraordinary job to prepare them for those jobs.

The President. Good. Thank you. Good job.

Temp Keller.

Temp Keller. Yes, Mr. President.

The President. You know, you probably don't want to answer this question, but, like, how does a guy get named "Temp"? [Laughter]

Mr. Keller. She's actually sitting right over there in the third row.

The President. Is she? [Laughter] Well, that's a good answer. You know what, I'll just wait and ask her behind the stage. [Laughter]

Welcome. Tell people what you do. Tell people what you have done with your program. It's really interesting.

Mr. Keller. It would be my honor, and thank you all for having me.

I'm the founder and president of an organization called RISE: Resources for Indispensable Schools and Educators. And the fundamental idea behind RISE is we are going to revolutionize the way that this country recognizes and retains good, effective teachers in public schools serving low-income communities.

[Mr. Keller made further remarks.]

The President. And so how does your deal work?

Mr. Keller. What we do—two very simple things. We essentially, one, identify good, effective teachers in low-income communities. Now, I'm sure there's a lot of people here in the room and listening that say, "Well, that's not an easy thing to do."

The way that we do it, though, and what makes RISE truly innovative and truly unique is that we ask teachers. We say to them, "How do you know you're any good at what you do? You went into teaching to make a difference. Demonstrate that you're making a difference."

[Mr. Keller made further remarks.]

The President. Nothing better than being around a social entrepreneur. [Laughter]

Mr. Keller. That's right.

The President. Here's your chance. How do you raise money? [Laughter]

Mr. Keller. Well——

The President. Does corporate California support your program?

Mr. Keller. They do. We have——

The President. It's in corporate California's interest that you succeed.

[Mr. Keller made further remarks.]

The President. God, I love a guy who is enthusiastic about what he's doing. [Laughter] Thanks. By the way, I also know East Palo Alto—Vermeil, my buddy Vermeil. Actually, the students came to the South Lawn one time. It's a great school. Thanks. Thanks for doing what you're doing.

Francois, step up to the mike here, my man.

[Francois J. Henley, president and chief executive officer, Silicon Genesis Corporation, made brief remarks.]

The President. We want people coming here, or who live here, to feel comfortable starting their own business. I love the fact that I am the President of a country where people can start with nothing except an idea and desire and hard work, and end up owning your own business. And Arnold is right—we've got to make sure the environment for entrepreneurship remains strong throughout our country if we want to be on the leading edge.

How fantastic is it that a guy comes from Montreal to realize his dreams? And you're employing people—who knows, you may hit on the thing that makes solar energy the source—I actually believe one of these days, we're going to have homes that become little power generating units unto themselves, and if you don't use electricity, you'll feed it back into the grid. And maybe you're the guy. Maybe one of these days— [laughter]. Don't take this marketing too far, you know. [Laughter] One camera bank, and he goes crazy. [Laughter]

Thanks for coming. I love your story. Good luck. I wish you all the best.

He talked about patents. Basically he's talking about making sure it's easy to protect his ideas. What—also, I want you to know that I talked to President Hu Jintao about—and I know John Chambers says, as well, over in China—is we expect the same treatment for our products that are patented here in the United States, overseas. Intellectual property rights is a vital part of making sure a trading world is a fair trading world. And I spent time yesterday with the President, in a very respectful way, but a firm way, reminding him that if he's to be a good trading partner with the United States, that when Cisco sells a product there or Francois eventually sells a product there, that property needs to be—that intellectual property inherent in that property needs to be protected and respected.

Final person. We're saving probably the best for the last, wouldn't you say, Arash? [Laughter]

Arash Shokouh. Absolutely. Thank you, Mr. President. [Laughter] That's right.

The President. You are a dash student?

Mr. Shokouh. Yes.

The President. Where?

Mr. Shokouh. I'm a computer engineering student at San Jose State University. I'm also minoring in mathematics, as well as film acting.

The President. Interesting. [Laughter] I got the strategy. [Laughter] Why did you major in the first two subjects? [Laughter]

Mr. Shokouh. That's the first time I've been asked that. [Laughter] Well, I decided to do computer engineering because all my life I've been a complete computer nerd, always playing with computers, electronics, taking them apart, destroying them. I mean, my parents wouldn't really let me go too close to the television without somebody to supervise. But that's basically why. [Laughter]

The President. And your dreams?

Mr. Shokouh. I hope to—after I graduate from San Jose State University, I want to go on to pursue an MBA degree and, hopefully, start a small business designing consumer electronics components—plan A. Plan B, to go into a small startup where I can help lead the direction of the product, design the product.

The President. And so when did you start having this kind of notion about where your life would like to go?

[Mr. Shokouh made brief remarks.]

The President. You know what's interesting—why don't you tell folks your family history real quick, if you don't mind.

Mr. Shokouh. Absolutely. I'm an Iranian American, and my parents, who are sitting right back there, are from Iran. My mom and dad came here at around 1980, and me and my sister were born here in San Jose.

The President. I love America, a country that welcomes people. We've got to be a welcoming society. And our soul is renewed when people escape societies that can be really repressive and have a son like Arash, who sits here with the President and the Governor talking about dreams. See, this is a country that has always got to be a place where people can dream big dreams and achieve them.

The question facing America is, will we lose our confidence and become an isolated nation? Will we lose our confidence and our ability to compete in the global marketplace and become a protectionist nation? And the answer is, absolutely not. We will not lose our confidence. And here is part of our strategy to make sure that the United States of America continues to be the leader. And it's important for people to understand that being the economic leader of the world means that it's more likely you'll have a better job, and it's more likely you'll be able to realize your dreams, and it's more likely our standard of living will continue to rise.

And that's the challenge ahead of us. It truly is. And I want to thank those who are here to help make the case why our citizens have got to be confident about the United States of America's place in the world and why we should never relinquish our standing in the world because we fear the future. We welcome it. We welcome competition, and we know we've got to put a strategy in place to be able to deal with that competition. And you're hearing the foundation for that strategy here today.

I want to thank you all for lending your expertise. Thanks for joining me. God bless you all.