Arne Duncan's Test on a Federal Education Bailout

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Arne Duncan's Test on a Federal Education Bailout

January 13, 2009 2 min read
Robert Alt
Former Visiting Fellow
Robert is a former Visiting Fellow
Arne Duncan's Test on a Federal Education Bailout

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By Lindsey Burke

Arne Duncan will face many questions when he appears on Capitol Hill for his Senate confirmation hearing. But one of the most important will be whether the Education Secretary-designate supports the proposed federal "bailout" for state and local public education budgets.

Last week, six Democratic governors called on Washington to provide a $1 trillion federal bailout for state governments facing declining tax revenues. Their proposal includes $250 billion for new public education funding for pre-K, K-12, and higher education funding. This followed similar calls from the National Governors Association, the U.S. Conference of Mayors, and a growing number of school districts requesting a federal bailout.

State and local governments are in dire straights. Estimates show that state budgets alone are facing shortfalls of more than $137 billion over the next two years. But is a federal bailout really a responsible solution?

The federal government currently provides approximately 9 percent of K-12 funding, or about $71 billion per year. If only $100 billion of the $250 billion that the governors are requesting were used for K-12 education, federal spending for America's schools would more than double overnight.

An immediate doubling of education spending is unwise in any fiscal climate but it is especially unwise when the federal budget deficit is swelling out of control. The Congressional Budget Office estimates that at $1.2 trillion, the federal deficit will exceed 8 percent of GDP this year, not including the potential $1 trillion being proposed as part of the stimulus package. State leaders cannot continue to look to the federal treasury as the only solution to the nation's problems.

Since a federal bailout isn't the answer, Duncan and Congress should consider more fiscally responsible ways for the federal government to help states weather the current fiscal emergency.

South Carolina Governor Mark Sanford offered a different approach to the open-handed state leaders in congressional testimony last fall--calling for flexibility and freedom from federal regulations and mandates to help put states on the road to fiscal solvency.

While Gov. Sanford's tune may sound a bit out of key to those vying for federal dollars, his argument hits the right note. "Give us more flexibility. Give us more in the way of control over the dollars we already have and less in the way of costs. Give us more options, not more money with federal strings attached."

This approach makes a lot of sense in terms of good education policy. Providing states with more control over how they use federal dollars would allow targeted spending toward the most high-needs areas. It would also relieve states of bureaucratic mandates that result in federal dollars being spent on bureaucratic compliance instead of in the classroom.

In 2007, conservatives in Congress offered a plan to give states this flexibility. The plan required states to be held accountable to parents and taxpayers for results by continuing state tests and public reporting to ensure transparency.

Under normal circumstances, this approach would improve education by allowing state and local leaders to make more decisions in the interest of students and schools in their community. Today, this makes even more sense--it helps governors and other state leaders allocate scarce resources in a manner they feel will best improve education.

Duncan should appreciate this approach. He has spoken in favor of providing states and localities more flexibility, linking Chicago's success to the ability to be innovative in meeting federal goals. The secretary-designate should recognize that state and local leaders would benefit with that flexibility now more than ever.

As secretary, will Duncan remember his past support for flexibility? Or will he cave to Democratic governors and others calling for an irresponsible federal bailout?

That's the $250 billion question.

Lindsey Burke is a research assistant in domestic policy studies at The Heritage Foundation.


Robert Alt

Former Visiting Fellow