Education Budget Plan Wielded as Policy Lever

Competition, Streamlining Key Elements

President Barack Obama’s proposed $49.7 billion budget for the U.S. Department of Education is more than just a spending blueprint: Department officials portray it as a fundamental reimagining of the agency’s structure and management.

Under the fiscal 2011 proposal unveiled last week, a roster of 38 relatively small, targeted grant programs would be regrouped into broader, more flexible funding streams—many of them competitive—aimed at furthering the administration’s education redesign goals.

The 11 new funding streams would be centered around such themes as increasing teacher and leader effectiveness, improving curriculum standards, and...