Michelle Rhee touted her red-track/green-track teacher pay proposal last night at Pace University, saying it’s made such a splash that Mayor Bloomberg asked Chancellor Joel Klein if they could bring a similar model to New York. The proposal, which is being negotiated with the D.C. teachers union right now, would award some first-year teachers nearly $40,000 raises in exchange for giving up their tenure rights — while others could choose a “red” path where they retain tenure but are paid less.

Rhee said the model came up in a recent chat with Klein, who she said she speaks to regularly to share “best practices” and to commiserate. Klein told her that Mayor Bloomberg had asked if they could bring the red/green plan to New York. “Apparently Klein said to him, ‘Not even you have enough money to do all of that in New York City,'” she said. Rhee’s plan, if passed, will be financed by private philanthropy for the first five years, she said.

A spokesman for the Department of Education, David Cantor, said the story is true.

Rhee spent part of her talk referencing the divide within the Democratic Party, where some education experts argue focus should be on improving schools and schools alone and others push for a broader focus. Rhee, who is firmly in the first camp, along with Klein, explained her objections to the second group by describing her experience as a second-year teacher.

“People say all the time you know, oh, children, if they don’t have proper health care and they don’t have proper nutrition and they don’t have their parents helping them with their homework, they’re never going to be able to be successful,” she said. “With these kids, my kids, their neighborhoods did not change, who their parents were did not change, the violence in the community did not change, their diets did not change. What changed were the adults who were in front of them every single day in school. And that made every bit of difference.”

Rhee got a warm reception at Pace, where many in the audience were young teachers in the Teach For America and Teaching Fellows programs. The teachers seemed especially grateful when Rhee agreed with their criticisms of policies like testing students still learning English in English, rather than Spanish, and test-prepping, which Rhee said she works to avoid by educating principals to set good examples at their schools.

She also laid out her plan for a teacher evaluation system, set to begin next school year, that will look not only at test scores but also use third-party evaluators to conduct observations and require teachers and principals to work together to set goals for their entire school.

Rhee said she intended to come to Pace and recruit all the teachers to come work for her in D.C., but hesitated when she saw that Pace is just a few blocks away from Tweed Courthouse, Klein’s headquarters. “When I realized that, I felt a twinge of guilt,” she said, laughing. “But now I’m over it.”

One question from the audience dealt with mayoral control. The questioner asked whether Rhee thought someone should add “checks and balances” to her authority, asking what would happen if a new mayor and chancellor came to D.C. and she didn’t agree with them.

Rhee replied by explaining that she would never have taken the job if the D.C. mayor, Adrian Fenty, had not had total control of the schools and given her 100% encouragement. “The answer ultimately is how do we get more people like Adrian Fenty into office,” she said.