Published Online: February 12, 2009
Updated: April 4, 2012

Obama Signs Economic-Stimulus Package

President Barack Obama today signed into law a $787 billion that would provide some $115 billion in aid to public education.

The bill, crafted after days of tense congressional negotiations last week, includes money to help local school districts avoid layoffs and program cuts, boosts funding for special education and programs for disadvantaged students, and offers the prospect of funding for school repairs and modernization, among other elements.

“We’re making the largest investment in education in our nation’s history,” Mr. Obama told an audience in Denver before signing the measure, saying the funds will be used to prevent teacher layoffs, train new teachers, and build modern classrooms and new school science labs, among other education needs.

Slicing the Stimulus

The measure won approval Feb. 13 on a 246-183 vote in the U.S. House of Representatives, with no GOP support, and a 60-38 U.S. Senate vote, with the support of three moderate Republicans.

The amounts for education in the final version of the measure—nearly double the U.S. Department of Education’s entire $59.2 billion discretionary budget for fiscal 2009—gives the new administration and the secretary of education “credibility” with the public and with educators, just as Congress is gearing up to reauthorize the No Child Left Behind Act, Rep. George Miller, D-Calif., the chairman of the House Education and Labor Committee, said in an interview shortly after House passage of the bill.

“I really think this changes the conversation dramatically,” Rep. Miller said. “I think it makes things a lot easier.” He said he would like to see reauthorization of the law, which many educators have criticized as underfunded, this calendar year.

Vice President Joe Biden looks on as President Barack Obama signs the economic stimulus bill during a ceremony on Feb. 17 at the Museum of Nature and Science in Denver.
—Ed Andrieski/AP

Passage of the stimulus package generally came as welcome news to education groups that sometimes find themselves at odds on other policy issues.

“Any piece of legislation this large cannot be perfect,” Mary Kusler, the assistant director of government relations for the American Association of School Administrators, said of the compromise crafted by House and Senate conferees. She said she wishes Congress had stuck closer to the U.S. House of Representatives’ bill, which included about $140 billion for education. Still, she said, “I’m really excited that the final bill continues to recognize the critical role that education plays in local economies.”

Amy Wilkins, a vice president of the Education Trust, a research and advocacy group that focuses on disadvantaged and minority students, said that the final version “not only protects jobs, but also goes a long way to protecting the interests of vulnerable students.”

But GOP lawmakers warned that the stimulus package could set unrealistic expectations for future spending, and that it doesn’t do enough to spur immediate economic growth.

“The single most important thing we could do for struggling American families would be to pass a fast-acting economic stimulus package that would protect existing jobs while creating new ones,” said Rep. Howard P. “Buck” McKeon of California, the top Republican on the education panel in statement released after the House vote. “Unfortunately, the spending package crafted in haste, and in secret, by congressional Democrats fails to focus on this central goal.”

Compromise Reached

The compromise agreement, worked out by a House and Senate conference committee, would provide $53.6 billion for a state fiscal-stabilization fund, including $39.5 billion that local school districts could use to avert staff layoffs and programmatic cutbacks and to pay for school modernization, among other purposes.

The stabilization fund would also include $5 billion under the control of the U.S. secretary of education to be given to states as bonus grants for meeting key performance measures in education.

In addition, the fund would include $8.8 billion that states could use for education and for modernization, renovation, and repair of public schools and higher education facilities, but could also direct to public safety and other pressing needs.

The $39.5 billion of the state stabilization fund for schools would first have to be used by states to “backfill” any cuts they have made to both K-12 and higher education, up to fiscal 2008 or 2009 levels. If a state didn’t have enough money to make K-12 and higher education whole, the money would have to be spread proportionally between the two.

Money in the stabilization fund would flow to states based on factors such as their populations of 5- to 24-year-olds. Any leftover money after backfilling cuts would flow to K-12 districts based on existing Title I formulas, and could be used for a host of purposes, including school modernization. New construction is not envisioned, congressional aides said.

House Democratic aides say it is hoped that the money will go out before July 1.

States also would have to put in their own money to fund schools up to 2006 levels. But states could seek waivers from the federal Education Department in cases of severe financial hardship.

$5 Billion Incentive Fund

Within the stabilization fund, a $5 billion incentive fund-administered by U.S. Secretary of Education Arne Duncan-would include $650 million for innovation grants to school districts that could be models for best practices. The innovation money would go to local districts, nonprofit organizations, or consortiums of school districts.

The agreement would also provide $10 billion for Title I programs for disadvantaged students, and $3 billion for Title I school improvement grants. And it would provide $11.7 billion for state grants for special education.

In the area of early education and child care, the agreement would provide $1.1 billion for Early Head Start and $1 billion for Head Start, plus $2 billion for the Child Care Development Block Grant.

The compromise agreement also includes $250 million for state data systems, $100 million for teacher-quality state grants, and $200 million for the Teacher Incentive Fund. It also has $650 million for educational technology, such as computers in classrooms.

The final level of education aid in the bill is a middle ground between the roughly $80 billion for education in the Senate version of the measure and the $140 billion approved by the House last month.

School construction funding—a top priority for President Barack Obama and some key lawmakers—remained a major sticking point in negotiations to the end.

The initial versions of the measure included a sizable amount of money for school construction grants-$14 billion in the House and $16 billion in the Senate.

Although that money was included in the version of the bill the House passed Jan. 28, it was jettisoned from a compromise measure that the Senate passed earlier this week. The Senate’s compromise bill was crafted to win the support of key moderate lawmakers, who expressed worries that a federally financed school construction program could set what they deemed a dangerous precedent for future spending.

The final House-Senate compromise bill includes lower levels of funding in the state fiscal-stabilization fund and smaller amounts for special education and education technology than in earlier versions.

Vol. 28, Issue 21

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