By Julia Lieblich

(FORTUNE Magazine) – ''Investing in our children is not just rhetoric. It's sound business practice, although many of our colleagues have yet to make that discovery.'' So said Arnold Hiatt, CEO of Stride Rite, who along with other business leaders went to Washington to support a proposal by Senator Edward Kennedy (D- Massachusetts) that the government should back Smart Start, an education program for 4-year-olds. Other executives on the record for Smart Start: Robert Mercer, CEO of Goodyear Tire & Rubber, Irving Harris, chairman of the executive committee of Pittway, J. Richard Munro, CEO of Time Inc., the publisher of FORTUNE, and Frank Doyle, senior vice president of General Electric.

Over the next five years, Smart Start would offer $4 billion in federal matching funds to states that provide comprehensive preschool programs. The recipients -- such as federally funded Head Start centers -- would have to run year-round full-day programs with fewer than 20 students per class and a 10- to-1 student-teacher ratio. The money would be used primarily to expand or upgrade existing preschool programs. Half the openings would be reserved for children from low-income families. Other families would pay according to their means. President Bush has proposed a $250-million-a-year increase for Head Start, which he says would enable the program to expand by up to 95,000 children to more than 900,000. But Kennedy figures that even with the Administration's money, there would be 600,000 other 4-year-olds who wouldn't be reached without Smart Start. Goodyear's Mercer argued, ''This company and this country cannot maintain its leadership position with a work force whose education limits them to mopping floors.''