Education Spending Is Major Sticking Point in Stimulus Talks

Lawmakers will have to debate the merits of school construction funds and additional aid to states in final negotiations.

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As both parties in Congress begin negotiations on a final economic stimulus bill, education spending promises to be a major sticking point. The Senate passed a stimulus bill that includes $83 billion for public schools and higher education. That amount is considerably less than the $150 billion voted by the House. So, what ended up on the chopping block? The Senate bill is stripped of, among other funds, $16 billion for school construction and $40 billion more for states to fund schools. ( Read a comparison of the two bills.)

President Barack Obama has signaled that he wants those funds reinstated. He seemed bewildered during Monday's televised news conference by the logic of lawmakers who say that school construction is the responsibility of states, not the federal government. "Why wouldn't we want to build state-of-the-art schools with science labs that are teaching our kids the skills they need for the 21st century . . . and, by the way, right now, will create jobs?" Obama said. Arne Duncan, the secretary of education, made a similar case Tuesday while visiting a high school in need of repairs in Arlington, Va. A day earlier, Duncan warned that almost 600,000 education jobs are at risk unless a stimulus package is passed and that the Senate's proposed $39 billion in state aid for schools is not enough.

One concern that the Obama administration didn't address was how states that are losing students and shuttering schools will make use of school construction funds. Minneapolis, for example, would receive $25.9 million in construction funds over the next two years under the House proposal. Trouble is, student enrollment in the city has been declining since 2000, and the district has had to close down six schools, the Minnesota Independent reports. A spokesperson said the district has found a use for those funds but declined to elaborate.

For their part, state governors—Republicans and Democrats—are furiously lobbying lawmakers to enact the levels of education spending proposed in the House bill. In Ohio, for example, Gov. Ted Strickland, a Democrat, is warning that the Senate measure could lead to higher tuition for 40 percent of public-college students as well as the loss of thousands of state and local government jobs, the Columbus Dispatch reports. At least 40 states are running deficits this year, and school districts in those states could be the hardest hit. On average, states spend about a third of all their revenue on education.

Republican lawmakers and some education experts remain skeptical about the benefits of more money for schools in a final stimulus bill. Rick Hess, director of education policy at the American Enterprise Institute, says that federal aid to schools should have strings attached. Among the conditions that lawmakers should demand from states receiving school bailout money, Hess writes:

"States and localities would have to demonstrate that they were reallocating dollars from less effective programs and services to more effective ones. School systems would identify and remove poor teachers and redirect resources to the best teachers and to those with scarce skills. Federal aid would be conditioned on its recipients' pursuing a course back to financial sustainability by unwinding unaffordable promises of benefits and pensions, as has been the case with Detroit's automakers."

Even if Congress passes the Senate version of the stimulus bill without the school construction funding and the additional aid to states, it will still account for a significant federal investment in education. The federal Department of Education currently provides $59.2 billion for education programs.

economic stimulus