CHICAGO (Reuters) - U.S. President-elect Barack Obama on Tuesday called the high U.S. school dropout rate "economically untenable" and said making schools more competitive would be a top job of his education secretary.
Saying the road to jobs and growth begins in the classroom, Obama announced Chicago schools chief Arne Duncan -- a longtime basketball partner and friend -- as his choice for education secretary. He charged Duncan with improving America's teachers and schools to help the United States become more competitive.
"If we want to out-compete the world tomorrow, then we're going to have to out-educate the world today," Obama told a news conference at an elementary school.
Obama, who takes office on January 20, noted that the U.S. high school dropout rate is one of the highest in the industrialized world and many young American children cannot even do basic math.
"We can't continue like this," he said. "It's morally unacceptable for our children and economically untenable for America."
After the news conference, Obama held a meeting of the key members of his economic team amid continuing bleak news on the U.S. economy, with consumer prices plunging at a record pace and housing starts falling to a new low.
They met as the Federal Reserve cut its benchmark U.S. interest rate to a range of 0 to 0.25 percent, a record low that underscored the worst economic turmoil since the Great Depression.
In his news conference before the Fed move, Obama warned the central bank's traditional tools for fighting recession were running out.
"We are running out of the traditional ammunition that is used in a recession, which is to lower interest rates. They are getting to be about as low as they can go," he said.
He said other branches of government needed to step up to help. "That's why the economic recovery plan is so absolutely critical," he said.
Obama, a Democrat, has promised to create at least 2.5 million jobs by 2011 and launch a major infrastructure improvement drive along with reforming the U.S. health care system, but questions over how to pay for it all remain.
Obama is scheduled to hold a news conference on Wednesday at which he is expected to announce he has chosen Colorado Sen. Ken Salazar as interior secretary.
As they introduced Duncan, both Obama and Vice President-elect Joe Biden said the choice for education secretary was a person who could raise standards and help reform schools.
"We have to have an education system that's second to none in the world. That's the only way our children and our nation are going to be able to compete in today's global economy," Biden said.
Duncan has been chief executive of Chicago Public Schools, the country's third-largest school district, since 2001. The current education secretary, Margaret Spellings, has called Duncan a "visionary" leader and reformer who would be a great choice to run the Department of Education.
"He's championed good charter schools, even when it was controversial. He's shut down failing schools and replaced their entire staffs, even when it was unpopular," Obama said.
Duncan, who was co-captain of Harvard University's basketball team, played professional basketball in Australia after he graduated from the university. He returned to Chicago in 1992 to direct a program to create educational opportunities for inner city children on the city's South Side.
Obama's choice was welcomed by lawmakers. Senate Democratic leader Harry Reid said he looked forward to confirming Duncan quickly so he could get about reforming the school system.
"He has proven to be a pragmatic leader with a record of bringing people together and bringing innovative and much-needed reforms to Chicago's schools," Reid said.
Additional reporting by David Alexander; editing by Mohammad Zargham