Business Impact Seen in Bush’s School Plan : Education: Package reflects a desire to impose market forces. Proposals include national testing in core subjects and research and development grants.

For months, the White House has done its best to create suspense around the education initiative President Bush will unveil in a series of ceremonies today. But its key points were suggested last year in a largely unnoticed report by the Business Roundtable.

In its nine-point education agenda, the coalition of 200 major U.S. corporations called for national testing of students, use of rewards and penalties to prod schools to improve, better social services for schoolchildren and application of new educational technologies.

The President’s new package contains essentially the same ideas--and that’s no accident.

The Administration’s reform package is, in fact, the clearest sign yet of businesses’ ascendant influence in the educational reform movement. Business has been increasingly involved in educational reform at the state and local level through the 1980s. With the appointment of Education Secretary Lamar Alexander, it has seized a central role on the federal level as well.

“In many ways, this is businesses’ agenda,” says Bruce Hunter, associate executive director of the American Assn. of School Administrators in Rosslyn, Va.

And there may be no more important agenda to be set this year. Some observers expect Alexander’s Education Department to be a showcase agency for the Administration, and perhaps the heart of Bush’s domestic policy for 1992.

The involvement of business groups in the issue reflects their increasing concern about the quality of the work force that America’s $600-billion annual investment in education is producing. Such groups as the Business Roundtable, the Council for Economic Development and the National Alliance of Business have long been interested in the subject. Recently, even groups like the American Gas Assn. have been scrambling to develop educational programs.

Most of these groups share a desire for radical reform: They want research and development to build new schools from the ground up; a national testing system to determine what works; and better social services to ensure that children are healthy enough, and safe enough, to learn. They want schools to succeed or fail based on how well they serve their “customers”--in other words, they want them subject to market forces, just like business.

While some of these ideas have been kicking around for a long time, it is through the energetic advocacy of business interests that the Administration has been persuaded to adopt them.

The Administration’s program, for example, calls for creation of a nationwide system of examinations based on standards to be developed in the core subjects of math, English, geography, science and history.

The idea of national testing was long opposed by conservatives as an improper intrusion of the federal government into local matters. But in the last six months, the idea has caught fire with business groups, who became persuaded that parents in Oklahoma should be able to tell how their children are doing compared to children in Maine.

“The Administration would never have gone for such an idea before business got behind it,” said one congressional aide.

Businesses’ influence is also apparent in the Administration’s push for research and development grants to develop new ways of teaching. The program calls for creation of a privately funded nonprofit corporation that would award contracts to between three and seven “R&D; teams,” which could be consortia from universities, think tanks, management consulting firms and high-tech manufacturers.

In addition, the Administration program calls for the federal government to award $1-million seed payments to 535 American communities to enable them to start up experimental school programs.

The R&D; contract idea was directly inspired by business leaders, including David T. Kearns, the former Xerox Corp. chairman and chief executive who is now the No. 2 official in the Education Department.

The business orientation of the new department also is evident in Kearns’ view that by giving parents maximum leeway to choose among schools, the government can promote good education the way that market forces produce well-run businesses.