Special Report

Stimulus Scale Seen as Issue

By Alyson Klein — February 06, 2009 8 min read
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The sheer scale of the new education aid envisioned under the economic-stimulus package now pending in Congress is forcing educators and state officials to consider how they would absorb that funding and how it could transform—or distort—school programs at the local level.

Officials from governors’ mansions on down are generally pleased at the prospect of billions of extra dollars for K-12 programs, early education, school construction, and other priorities.

The size of that bonanza remained in flux this week, as a bipartisan group of lawmakers seeking a palatable package trained their sights on proposed increases in direct aid to states, Title I funding for disadvantaged students, special education, Head Start, and a discretionary fund set aside for the U.S. secretary of education.

Education in the Stimulus Package

Schools stand to benefit from the federal economic-stimulus package being debated in Congress. The House proposed spending up to $150 billion on prekindergarten, K-12, and higher education through 2010. At the time this issue went to press, the Senate was considering significantly scaling back the education spending, perhaps by half. Dollar amounts in the bills attributable to education vary depending on how broadly education is defined, as certain education-related programs in the package—such as funding for after-school meals—are administered outside the U.S. Department of Education.

Though there were differences between the House and Senate versions, the two chambers do agree that some direct aid to schools and states is needed. Any differences would have to be resolved in a conference committee. The following numbers reflect the House bill as passed and the Senate bill as introduced.


• State incentive and innovative grants, to be awarded by the U.S. Department of Education
$15 billion

• Funding to states for K-12 and higher education
$39 billion

• Funding to states for priority needs, including education
$25 billion



• School modernization and repair
$14 billion in House, $16 billion in Senate

• School construction bonds
$22 billion

• Expansion of Qualified Zone Expansion Bonds, used for school renovation and repairs
$1.4 billion

• 21st Century Classrooms for school technology
$1 billion

• Statewide data systems
$250 million, House only

• Charter school facilities, for construction, purchase, lease, and renovation
$25 million, House only

• Construction of buildings, including schools, operated by the Bureau of Indian Affairs
$500 million in House, $522 million in Senate



• Title I
$13 billion

• Education for homeless students
$66 million in House, $70 million in Senate

• Impact aid to help districts that have a low property-tax base because of federal property or installations
$100 million in House, $320 million in Senate

• Expanding to more states the after-school meals program, currently in 8 states, U.S. Department of Agriculture
$726 million, House only

• School food-service equipment, USDA
$198 million, Senate only

• Vocational Rehabilitation
$500 million



• Teacher Incentive Fund, for pay-for-performance programs
$200 million, House only

• Improving teacher quality through competitive grants to states
$100 million

• Funding to National Science Foundation to develop new teachers in STEM subjects and improve instruction
$100 million in House, $50 million in Senate



• IDEA state grants
$13 billion

• IDEA grants for infants, toddlers, and families
$600 million House, $500 million Senate



• Child Care Development Block Grant, Department of Health and Human Services
$2 billion

• Head Start, HHS
$2.1 billion



• Pell Grants
$15.6 billion in House, $13.8 billion in Senate

• Update and repair of facilities
$6 billion in House, $3.5 billion in Senate

• College work-study
$490 million

• American Opportunity Tax Credit for college tuition
$13.7 billion over 10 years in House, $12.9 billion in Senate

SOURCES: Committee for Education Funding; National Conference of State Legislatures; New America Foundation; U.S. House and Senate

Even if the proposed hikes are significantly scaled back, however, conservative estimates still put the potential increases at more than the U.S. Department of Education’s current $59.2 billion discretionary budget.

The debates in the U.S. Senate and House of Representatives over the broad funding levels and specific components of such a plan highlight fundamental issues involving management and accountability; “maintenance of effort” by the states in paying for education; and the question of whether the increased federal spending can, or should, be sustained.

“You wonder if it’s really sunk in,” Vic Klatt, a former aide to Republicans on the House education committee, said of proposed increases. “I absolutely think this redefines the federal role [in education]. Not in all bad ways, but in ways that haven’t been fully thought through.”

Jack Jennings, the president of the Washington-based Center on Education Policy, said such a substantial injection of aid could pave the way for the federal government to think more expansively about its role in improving struggling schools.

“It not only makes it more legitimate for the federal government to ask for accountability, it also [opens up] the question of what should the feds be doing to help schools,” said Mr. Jennings, who spent nearly three decades as an aide to House Democrats on Capitol Hill.

But during floor debate in the Senate this week on its version of a measure passed earlier by the House, Sen. John Kyl, R-Ariz., warned against pumping money into education programs that he said are in need of a careful reworking to have a greater impact on student progress.

“There is an opportunity here to really do some good,” said Sen. Kyl. “Rather than just throw more money at a problem, why don’t we take advantage of the opportunity to really do something to reform it?”

Supporters of the package argued that legislation needed to be crafted and approved quickly to help school districts avert severe cuts in staff and programs.

“The economic-recovery bill should not be the vehicle for reauthorizing the No Child Left Behind Act,” Sen. Tom Harkin, D-Iowa, the chairman of the Senate appropriations subcommittee that deals with education, said in a statement sent to Education Week. “It would be foolhardy, not to mention politically impossible, to try to enact major education reforms” in a few weeks’ time, he said.

And districts also believe speed is of the essence, said Mary Kusler, the assistant director of government relations for the American Association of School Administrators, based in Arlington, Va.

“The reality is that school districts are in a position right now with nowhere else to turn to prevent them from cutting hundreds of thousands of staff positions and programs,” she said. “We see this [stimulus plan] as an overdue recognition of the role that our schools play in the overall economy.”

States Hurting

Supporters of including education in the stimulus package argue that direct aid to the states for K-12 programs will help the recession-battered economy in part by staving off layoffs and other steps at a time when states face crushing deficits.

This week, a new report by the Denver-based National Conference of State Legislatures tallied cumulative state deficits over the next year and a half at $134 billion—a number that’s sure to climb if the economy continues to deteriorate. That’s on top of the $40 billion in cuts states have made this budget year.

President Barack Obama has made clear that he considers education funding a crucial piece of the economic-recovery package that is his top domestic priority.

The stimulus measure “will provide billions of dollars to build schools and help with school construction,” the president said at a school visit this week. “And it will also give [U.S. Secretary of Education Arne] Duncan the resources he needs to reward excellent, innovative schools.”

But not everyone is convinced that pouring extra funds into programs such as Head Start, special education, and college Pell Grants will give a needed jolt to the economy.

“These are all programs with merit. I have supported them all. ... But the question is: Do they stimulate the economy? How?” asked Sen. Thad Cochran of Mississippi, the top Republican on the Senate Appropriations Committee, in floor debate on the proposal. “Is it realistic to expect funding levels for these programs to revert to today’s levels once the economy recovers? I think it is safe to expect just the opposite.”

Debates to Come

Those debates are likely to shape discussions on the House-Senate conference version of the legislation, which was expected to be crafted the week of Feb. 9, pending final passage of a Senate bill. The bills in both chambers contain different spending levels for education that would have to be reconciled in a conference committee.

Although the House and Senate bills both provided at least $120 billion for education, lawmakers as of late this week, were discussing reducing that proposed increase by roughly $50 billion.

The House bill, which passed Jan. 28 with no GOP votes, would provide a $79 billion “stabilization” fund, most of which would be intended to help states put schools and colleges on a firmer financial footing.

It would also increase spending by $13 billion each on the two main federal programs in K-12 education, special education and Title I grants for disadvantaged students, to be spread over fiscal years 2009 and 2010.

In addition, the House measure would provide $15 billion in incentive grants to reward states, districts, and nonprofit organizations that boosted student progress. The bill would give Secretary Duncan wide latitude in distributing the money.

But late this week, a group of moderate lawmakers on both sides of the aisle were working to refocus the overall package on programs that they deemed would provide an immediate economic stimulus—and scale back proposed education funding increases.

Items on the table included a substantial portion of the stabilization fund. Also under consideration was about half of the proposed increases for Title I and special education, roughly half the $2.1 billion funding for Head Start, and $50 million from the proposed $100 million Teacher Quality Enhancement grant program.

The prospect of a scaled-back education aid package drew very different reactions within the education community.

“We’re obviously very upset about the proposed cut,” said Randall Moody, the chief lobbyist for the National Education Association. “We think the education part of the package is the crucial part because it will save jobs and put people back to work. We don’t understand how they can look at school construction, Head Start, and special education and say those aren’t stimulative.”

But Frederick M. Hess, the director of education policy studies at the American Enterprise Institute in Washington, said even if Congress significantly reduces the proposed education funding in the bill, the remaining increases leave school districts little room to complain.

“When districts are talking about enormous pain and damage, it’s either level funding or they’re being dialed back to [2005 and 2006] funding levels,” he said. “That was hardly the dark ages.”

State Responsibilities

There are also some important differences in the way the two bills handle state spending.

Under the House bill, the Title I money would be subject to the maintenance-of-effort provisions already in law, which require states to keep up past funding levels so as not to use federal aid simply to replace some of their own spending. And, in order to make use of the money available under the stabilization fund, states would have to maintain their education funding at fiscal 2006 levels.

But the Senate language would allow the U.S. secretary of education to waive maintenance-of-effort provisions for the Title I money, special education funding, and other education programs during fiscal years 2009 and 2010 only.

That would let states and districts in dire financial straits use the stimulus funding to pay for programs and salaries that typically have been financed using local and state dollars.

The move was necessary to ensure that financially strapped school districts would be eligible for the funds, Democratic congressional staff aides said.

Anne Bryant, the executive director of the National School Boards Association, said she would like the federal Education Department to have wide latitude to grant waivers for the maintenance-of-efforts requirements.

“This money is about keeping teachers, keeping bus drivers, keeping nurses,” Ms. Bryant said.

But other advocates are worried that the potential waiver could mean a cut in state education funding down the line, and they prefer the more restrictive House language.

“How do you get the state to replace the dollar that they’ve converted to a federal dollar? That leaves a big problem at the end of this,” said Amy Wilkins, a vice president of the Education Trust.

Assistant Editor Michele McNeil contributed to this story.

A version of this article appeared in the February 11, 2009 edition of Education Week as Stimulus Scale Seen As Issue


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