    RECORD TYPE: PRESIDENTIAL  (TRP NOTES MAIL)

    CREATOR: Elaine C. Kamarck ( CN=Elaine C. Kamarck/O=OVP [ OVP ] )

    CREATION DATE/TIME:19-FEB-1997 18:04:41.00

    SUBJECT:  POTUS lunch memo - February 19, 1997

    TO: Wendy C. New ( CN=Wendy C. New/O=OVP @ OVP [ OVP ] )
    READ:UNKNOWN

    TEXT:
    To:	Ron Klain/OVP, Debbie B Bengtson/OVP

    cc:

    From:	Elaine C. Kamarck/OVP

    Date:	02/19/97 06:03:52 PM

    Subject:	POTUS lunch memo - February 19, 1997

    There are 3 issues for lunch -  one minor and two major; the minor one

    first.

    	1) At your last lunch the President asked about Peter Drucker.  We

    did a Nexus-Lexis search on him and he has written nothing on NPR since

    the Atlantic Monthly cover article of nearly two years ago.  Prior to his

    writing that article he was briefed by an NPR team on what we were doing

    and wrote a somewhat negative article anyway.  He is now 90 years old and,

    as far as we can tell, not writing about anyone.  I think it may be well

    worth our while to brief other, younger management experts in order to get

    our story out but I don't think we need be too concerned about Drucker.

    	2)  Rego in the second term.  As you know we are concentrating on

    31 agencies with the object of making sure they deliver reinvention

    results that are highly visible to the public in the next four years.

    (The list is attached.)  So far we have met with INS, PTO (Patent and

    Trademark), SBA and Customs.  By the end of June all these agencies will

    have ready for you a four year reinvention plan.  The cumulative goals of

    these plans -- for instance,  "The US should lead the creation of a one

    stop international Patent Filing system over the Internet." -- will  be

    something the President may want to join you in announcing.

    	One of the interesting themes to emerge from at least two of the

    four (PTO and Customs) is significant micromanagment and not necessarily

    helpful interference on the part of the Cabinet Department in which they

    are located.  It is for this reason that you will be meeting with all the

    new Cabinet Secretaries and it is for this reason that the President

    should reinforce with his Cabinet Secretaries (especially the new ones)

    that he expects them to deliver on a significant reinvention agenda for

    the next four years.  If they hear this from him and from you we may get

    the new Secretaries to help, not hinder, the reinvention efforts of these

    very large bureaus under their control.

    	3)  Your Role in the Administration's Education reform efforts.

    While the President focuses on standards and assesment you can compliment

    his efforts by talking about school system reform.  The essential facts

    are that the school population is rising as fast as it was in the 1960s

    but there is no political will to increase the dollars going to education

    in significant amounts.  That means that public education will need to be

    restructured, reinvented and reengineered just as we are doing in the rest

    of the government.  Research indicates that there is significant room to

    reinvent school spending in much the same way that we have reinvented

    government, by cutting unnecessary bureaucracy and overhead and by

    focusing money and resources on the "customer" -- in this case students

    and the people who deal directly with them.

    	If you start with the fact that per pupil expenditures, adjusted

    for inflation, have risen more than 25% over the past 10 years with no

    apparent affect you know that there is alot of waste going on.  "Site

    based reporting" developed by Coopers and Lybrand has been applied to more

    than 50 school districts nationwide.  This breaks down school financing in

    ways that answer the critical question -- "How much is being spent on the

    child?"   Not surprisingly there appears to be a rough relationship

    between poor student performance in a school district and excessive

    bureaucracy.  In New York City they found that they were spending $8000

    per student but only $44 was being budgeted for classroom materials.  In

    Nashville, they discovered that they were spending 24% of their budget on

    operations and maintenance compared to 18% for a typical large district

    and they started a program to decrease those costs and increase the money

    for instructional spending.

    	These numbers are most dramatic in big cities.  Sunday's

    Washington Post carried a dramatic story about the District where they

    spend $7,389 per student and still wind up short on crayons, toilet paper,

    books and teachers.

    	There are many more examples where school dollars are not being

    spent on the "customer."  I am arranging a briefing for you next week on

    this topic.  But this is exactly what we face in the federal government

    and what we have to change in a balanced budget era.  I believe you could

    be a great spokesman encouraging parents to hold their school districs

    accountable for every education dollar and that this would give you your

    own piece of the education debate.  You should broach this topic with the

    President and see if he is amenable to your going forward with this.