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[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

       DEPARTMENT OF EDUCATION FISCAL YEAR 2002 BUDGET PRIORITIES

=======================================================================

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, MARCH 13, 2001

                               __________

                            Serial No. 107-8

                               __________

           Printed for the use of the Committee on the Budget

  Available on the Internet: http://www.access.gpo.gov/congress/house/
                              house04.html

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
70-997                     WASHINGTON : 2001

_______________________________________________________________________
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                        COMMITTEE ON THE BUDGET

                       JIM NUSSLE, Iowa, Chairman
JOHN E. SUNUNU, New Hampshire        JOHN M. SPRATT, Jr., South 
  Vice Chairman                          Carolina,
PETER HOEKSTRA, Michigan               Ranking Minority Member
  Vice Chairman                      JIM McDERMOTT, Washington
CHARLES F. BASS, New Hampshire       BENNIE G. THOMPSON, Mississippi
GIL GUTKNECHT, Minnesota             KEN BENTSEN, Texas
VAN HILLEARY, Tennessee              JIM DAVIS, Florida
MAC THORNBERRY, Texas                EVA M. CLAYTON, North Carolina
JIM RYUN, Kansas                     DAVID E. PRICE, North Carolina
MAC COLLINS, Georgia                 GERALD D. KLECZKA, Wisconsin
ERNIE FLETCHER, Kentucky             BOB CLEMENT, Tennessee
GARY G. MILLER, California           JAMES P. MORAN, Virginia
PAT TOOMEY, Pennsylvania             DARLENE HOOLEY, Oregon
WES WATKINS, Oklahoma                TAMMY BALDWIN, Wisconsin
DOC HASTINGS, Washington             CAROLYN McCARTHY, New York
JOHN T. DOOLITTLE, California        DENNIS MOORE, Kansas
ROB PORTMAN, Ohio                    MICHAEL E. CAPUANO, Massachusetts
RAY LaHOOD, Illinois                 MICHAEL M. HONDA, California
KAY GRANGER, Texas                   JOSEPH M. HOEFFEL III, 
EDWARD SCHROCK, Virginia                 Pennsylvania
JOHN CULBERSON, Texas                RUSH D. HOLT, New Jersey
HENRY E. BROWN, Jr., South Carolina  JIM MATHESON, Utah
ANDER CRENSHAW, Florida
ADAM PUTNAM, Florida
MARK KIRK, Illinois

                           Professional Staff

                       Rich Meade, Chief of Staff
       Thomas S. Kahn, Minority Staff Director and Chief Counsel

                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, March 13, 2001...................     1
Statement of:
    Hon. Roderick R. Paige, Secretary, U.S. Department of 
      Education..................................................     5
    Chester Finn, John M. Olin fellow, Manhattan Institute and 
      President, Thomas Fordham Foundation.......................    49
    Lisa Keegan, superintendent, public instruction, State of 
      Arizona....................................................    54
    Hon. George Miller, a Representative in Congress from the 
      State of California........................................    61
Prepared statement of:
    Hon. Bob Clement, a Representative in Congress from the State 
      of Tennessee...............................................     3
    Hon. Ander Crenshaw, a Representative in Congress from the 
      State of Florida...........................................     4
    Secretary Paige..............................................     8
    Mr. Finn.....................................................    51
    Ms. Keegan...................................................    56
    Mr. Miller...................................................    63

 
       DEPARTMENT OF EDUCATION FISCAL YEAR 2002 BUDGET PRIORITIES

                              ----------                              

                        TUESDAY, MARCH 13, 2001

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 1:07 p.m. in room 
210, Cannon House Office Building, Hon. Jim Nussle (chairman of 
the committee) presiding.
    Members present: Representatives Nussle, Sununu, Hoekstra, 
Bass, Collins, Fletcher, Toomey, Watkins, Hastings, LaHood, 
Schrock, Culberson, Brown, Putnam, Kirk, Spratt, Bentsen, 
Davis, Clayton, Price, Clement, Moran, Holt, McCarthy, and 
Honda.
    Chairman Nussle. Good afternoon. We call the full meeting 
of the Budget Committee to order.
    This is a hearing on the President's budget for education. 
We are honored today to have with us the Secretary of 
Education, Dr. Paige. Dr. Paige was confirmed by the United 
States Senate as the seventh Secretary of Education on January 
20 of this year, following the inauguration of President Bush.
    We are honored to have you before our committee today to 
talk a little about the President's budget, the budget for the 
Department of Education and the budget for education in general 
for our Nation. Part of my interest in this hearing certainly 
as a representative of the Second District of Iowa, but also as 
a dad with two kids in public school back home in Manchester, 
as we speak, Manchester, Iowa, that is, and Mark and Sarah, I 
think Mark is probably in his social studies half hour about 
now, and Sarah, who is a special needs student, comes under the 
jurisdiction of IDEA. So she is in her classroom as we speak, 
but under her individualized education plan. She's probably 
getting some extra reading assistance as we speak.
    So education is near and dear to me, for personal reasons, 
not only because of my job as the Chairman of the Budget 
Committee, but also because as a dad, and there are many of us 
here as parents or grandparents that are concerned about our 
kids' education. We are honored to have you come before us 
today to talk a little about that education.
    Before I recognize the gentleman from South Carolina, let 
me just say that one of the things that we are so eager to hear 
about are the new ideas that you and the President are bringing 
forward for education. There is no question that we have seen 
some, I'm not sure exactly what word you might want to use, 
stagnation, with regard to education. We haven't seen the 
advances that maybe the amounts of money that we've been 
putting into it would necessarily suggest. We have this 
assumption, I think, in this country, that the more money we 
put toward something the better quality we are going to 
necessarily get.
    And as you know, both from your vantage point now as 
Secretary, as well as your very special vantage point, having 
run a school district and been a teacher, you can shed some 
light, I hope, on exactly why we may not be meeting some of the 
goals that we've been all trying to achieve.
    The other thing I would just suggest after reading the 
President's budget, and part of my questioning is going to be 
in the area of IDEA. The Congress, over the last three sessions 
now, in a bipartisan way, has been putting more resources 
toward IDEA as a way to try and meet the responsibility that 
was decided back in 1975, I believe it was, when IDEA was first 
authorized, that said that the Federal Government was going to 
try and meet 40 percent of the funding responsibilities for a 
child in a special education setting.
    I believe we're probably up to about 16 percent, but that's 
not where we need to be. And one of the concerns that I would 
just share with you in the President's budget is, how are we 
going to continue meeting that goal, achieving the goal, and 
meeting the obligations that we have in IDEA, especially.
    So those are my areas of interest, and I look forward to 
your testimony. With that, let me recognize the gentleman from 
South Carolina, the ranking member, John Spratt.
    Mr. Spratt. Thank you very much, Mr. Chairman, and let me 
quickly add to your words of welcome my own. Dr. Paige, your 
reputation as an educator precedes you to Washington. You are 
highly spoken of by all who know you and have worked with you 
directly. We are delighted to see you in your position.
    We're also happy to see you here today to give us some more 
information about the budget request. So far we've only gotten 
the Blueprint for New Beginnings, and it's short on the kind of 
detail we would like to see.
    The Administration has announced that it will raise the top 
line for education to $44.5 billion in its budget request for 
next year. And that's good news, because it's an increase. But 
the way we see it, and the way we calculated it, it's a bit 
less of an increase than what was claimed. The claim was that 
it is an 11.5 percent increase. When we include the advance 
appropriation, which was included in last year's appropriation 
for fiscal year 2001, when we include the $2.1 billion already 
appropriated for 2002, the increase we get is about 5.7 
percent, rather than 11.5 percent.
    Now, I'm not scoffing at 5.7 percent. That's more than 
discretionary spending in general gets in this budget. But it 
pales in comparison to recent years. Over the last 5 years, we 
have increased education appropriations by an average of about 
13 percent a year. And last year, we plussed it up by 18.2 
percent.
    So we think we can do more. We think our surpluses afford 
us the opportunity at the Federal level to help the local level 
provide the kind of quality education America desperately needs 
for the future. There are several programs that we're anxious 
to hear about. The after-school program, for example, the 21st 
Century School Learning Center Program has been very popular in 
my district in places where the school districts have been 
fortunate enough to win grants.
    The class size initiative, with parents and teachers both, 
it's a winner in my district. Whenever I talk about lowering 
class size in grades 1 through 3 to 15 students, everybody 
appreciates the potential in that. And there are lots of 
districts, rural and urban, as you can well appreciate, coming 
from your background, who need help with school construction. 
And of course, IDEA is an account that we talk about a lot, but 
have not yet begun to do a fair Federal share for. We'd like to 
know how you will be able to get out of the $44.5 billion 
you're proposing a fair and adequate funding for all of those 
obvious needs.
    Thank you for coming today, and we look forward to your 
testimony.
    Chairman Nussle. All members, without objection, may put 
statements in the record at this point.
    [The prepared statements of members follow:]

 Prepared Statement of Hon. Bob Clement, a Representative in Congress 
                      From the State of Tennessee

    Thank you, Mr. Chairman for yielding to me. Good morning and 
welcome to the Budget Committee, Mr. Secretary. Secretary Paige--
congratulations on your new position. I can appreciate what you're 
going through in transitioning from an educational setting to 
Washington; I was a college president before I came to Congress. But I 
can tell you this--being a college president was a lot harder than this 
job, at least most of the time!
    As a former educator, current co-Chair of the House Education 
Caucus and parent of two daughters who have always gone to public 
schools, I am extremely concerned about the status of our schools. I 
have always been a strong believer in our public school systems. 
Improving the public schools in this country needs to be our top 
priority. Simply put, schools should be free from drugs and violence 
and an environment rich in learning and educational excellence. We need 
adequate facilities, books and teachers both qualified and dedicated. 
Research shows what parents already know--students learn best when they 
are in safe, modern schools with smaller classes and 21st century 
technology. The Federal Government has a responsibility to provide 
states and localities with financial assistance for education. If we 
are to continue to prosper economically and as a democracy, America 
must have an education policy that provides opportunities for all of 
our children to succeed.
    Recently, a lot of attention has been given to the quality of our 
public schools themselves. Simply put, we cannot expect our children to 
get a 21st century education if their school buildings are outdated, 
ill-equipped, and falling apart. I have visited numerous schools in my 
district and seen for myself the poor conditions our teachers and 
students are forced to suffer through--no air conditioning, asbestos, 
closets converted to classrooms, outdated technology, and shared 
facilities and resources. We must do better. I'm deeply concerned to 
see that the President's budget framework guts school renovation and 
construction funding. I would encourage this Administration to continue 
to push for significant funding specifically for school construction 
and renovation projects.
    Being from Nashville, Tennessee, music has always had a special 
place in my heart. I have been a longtime supporter and proponent of 
music education. Research has shown that involvement in music programs 
improves a child's early cognitive development, basic math and reading 
abilities, self-esteem, SAT scores, self-discipline, ability to work in 
teams, spatial reasoning skills, and school attendance. Also, children 
involved with music education are more likely to graduate from high 
school and attend college, and less likely to be involved with gangs 
and substance abuse. The study of music and the other arts also 
provides students with a sense of their cultural heritage. Later this 
week I will be hosting the first Education Caucus briefing of the 107th 
Congress with my colleague, Mr. Roy Blunt, on music education. We're 
going to hear from some experts as well as some students about the 
importance of music education. I would encourage both the 
administration and this committee to support continued research into 
music education as well as programs that promote music education in our 
schools. Just as we would not think to cut math or science from our 
curricula, we must not cut music education.
    I am also very pleased to see President Bush recognize the 
importance of character education in his recent address to Congress. 
Americans are concerned about the steady decline of our nation's core 
ethical values, especially among our children. Parents should be the 
primary developers of character, but the role of education in 
character-building has become increasingly important. Schools across 
the country have begun to incorporate character education in their 
curriculum in a variety of ways and are achieving real results, 
including improved school climate, fewer behavior problems and even 
higher test scores. Congressman Lamar Smith, of Texas, and I have 
introduced H.R. 613, the Character Learning and Student Success (CLASS) 
Act. Character education has become a national priority in the 
education reform debate. I believe that the CLASS Act will bring 
national attention to the importance and effectiveness of character 
education and will help schools create positive learning environments. 
I would hope that the administration would include the CLASS Act in any 
character education initiative proposed.
    As a former college president and parent of one child in college 
and another set to begin in the fall, I know how important Federal 
financial aid can be. The demands of technology and the global economy 
are reflecting the importance of a college education. All too often, 
the cost of higher education has been a deterrent to many who wish to 
continue their education. We cannot afford to let higher education be 
out of reach of those students who have the desire to further their 
education. No student, regardless of socio-economic background, should 
be deprived of something as priceless as an education. Federal 
financial aid programs need to be adequately funded to help all of our 
students continue their education. Supplemental Educational Opportunity 
Grants, Pell grants, Federal work-study, Perkins loans, and graduate 
education programs all need to be funded at higher levels. These are 
all worthy programs that make a real difference in students' lives.
    Thank you, Mr. Chairman, for allowing me the opportunity to 
highlight some of my priorities in education funding this year. I think 
we can all agree that education is of the utmost importance not only to 
this committee and this Congress but also to the American people. I 
look forward to working with Secretary Paige to support educational 
policies and programs that benefit all of our students. I yield back 
the balance of my time.

Prepared Statement of Hon. Ander Crenshaw, a Representative in Congress 
                       From the State of Florida

    Mr. Chairman, and Mr. Spratt, thank you for inviting Secretary 
Paige to discuss the President's budget proposal for education with us 
today. And, Secretary Paige, thank you for sharing your well-informed 
advice on the President's top priority.
    If I may say so from the beginning, you arrive here today as more 
than the Secretary of Education for our new President. You are only 
just removed from the front lines of education in Houston, Texas. And, 
you know far more about what is needed to improve public education than 
a simple political appointee in Washington, D.C. The advice you give us 
is not academic, but real. This is why the President has entrusted in 
you his number one priority; the issue he talks about most 
passionately.
    Similarly, when I have questions about how to improve our public 
schools, I draw on my own experience as a product of a public education 
and I talk to teachers, students, and administrators in the schools 
today. The things that they tell me might surprise some of the 
organizations that claim to represent them here on Capitol Hill.
    For instance, to listen to some, Federal funding specifically to 
finance school construction is the most important initiative Congress 
can undertake. But, just last month, I met with a group of school board 
members from my district who had a different view on that issue. 
Despite persistent prodding from others in the room, they stated 
unequivocally that more money for school construction is not their top 
priority. If the Federal Government is going to lend them a financial 
helping hand, they would much rather apply it elsewhere, like teachers' 
salaries.
    Not long after that, when I met with school administrators and 
school board members from another county in my district--one that is 
less urban and amongst the fastest growing areas of the state--I found 
that it wasn't so much that they need more money for school 
construction, but that they want a change in the way that school 
construction is financed.
    The flexibility that the President's education proposal provides to 
local school districts and to states is one of the most important 
aspects of his plan. As my example above implies, even between 
neighboring school districts, needs and interests can differ. The 
contrast is even clearer between states. A rural state in the Midwest 
is unlikely to have the same education policy as a mixed-urban state 
like Florida with its large population of non-English speaking 
students.
    By consolidating the Federal grant programs and cutting much of the 
red tape that binds those dollars, the President acknowledges that 
states and school districts can have different, yet equally valid 
ideas. What matters is not the method, but the results.
    I also support the President's proposal to require our schools to 
be more accountable to the parents and children they serve. It is not 
too much to ask that schools live up to the same standards that other 
professional institutions face every day. In fact, we should demand it 
on behalf of our children. Yet, we demand more of our local banks than 
of our schools. The term ``bankers' hours'' used to be more than just a 
saying; it used to be a reality. But, today, we have options that allow 
us to bank 24 hours a day, 7 days a week by phone, Internet, and ATM. 
Technology, innovation, and a healthy dose of competition have helped 
banks to meet the needs of a faster-moving society.
    Similarly, our children live in a different world than that in 
which we grew up. Technology, innovation, and a healthy dose of 
competition can help our schools better meet the needs of our children. 
The President's proposal encompasses all of these principles. He asks 
more of our schools, but he gives them the resources to meet these 
higher goals.
    The President proposes a whole new way of thinking about K-12 
education, and, frankly, I'm excited at the prospect of playing a role 
in this revolution. I look forward to working with you, Mr. Chairman, 
and with my colleagues on this committee, to ensure that the 
President's top priority receives the funding it needs to succeed.
    As I've said so many times already before this committee, the 
surplus does not absolve us of our responsibilities. We still must make 
tough choices about our priorities. But putting funding for the 
President's bold education proposal at the top of our list is not a 
hard choice to make.
    Thank you, Mr. Chairman.

    Chairman Nussle. Mr. Secretary, your entire statement as 
written will be in the record. You may summarize or proceed as 
you wish. We're very pleased to have you here, and look forward 
to your testimony. Mr. Secretary.

STATEMENT OF HON. RODERICK R. PAIGE, SECRETARY, U.S. DEPARTMENT 
                          OF EDUCATION

    Secretary Paige. Thank you, Mr. Chairman. I'll make a short 
statement.
    Thank you for this opportunity to testify on behalf of No 
Child Left Behind, President Bush's plan to strengthen our 
elementary and secondary schools. And especially to close the, 
what I think to be, inexcusable achievement gap and to discuss 
the President's 2002 budget for education.
    I ask, Mr. Chairman, that my full testimony be entered into 
the record, and I'll make a brief summary to the committee.
    I'm pleased and proud that President Bush has made 
education his top priority. He's announced No Child Left Behind 
in his first week as President, and he's given the Department 
the highest percentage increase of any Cabinet-level agency in 
his first budget. Our commitment to providing a first-class 
education to all children is clear. I look forward to working 
with each of you over the coming months as we make the changes 
needed to reach this important goal.
    Before I get into the details of the President's proposal, 
however, I'd like to make a few observations. First, No Child 
Left Behind is, as the President described it, a framework from 
which we all work together, Democrats, Republicans and 
Independents, to strengthen our elementary and secondary 
schools. This means that we're open to your ideas on how to 
meet our shared goals.
    Second, No Child Left Behind builds on existing efforts to 
improve quality education for all children. We're not asking 
States and school districts to drop everything they've been 
doing and start over. But we're asking them to pursue more 
vigorously the kinds of changes they've already undertaken.
    At the same time, we cannot ignore the need for real change 
in America's schools. While the 1994 reauthorization of the 
Elementary and Secondary Education Act moved in the right 
direction, it did not go quite nearly far enough. If you doubt 
that the present approach is broken and needs fixing, just 
consider the achievement gap that exists between disadvantaged 
and minority students, the focus of the Federal programs in the 
first place, and their more advantaged peers.
    For example, on the latest national assessment of 
educational progress, in fourth grade reading, 73 percent of 
white students performed at or above the basic level, compared 
to 40 percent of the Hispanic students and only 36 percent of 
African-American students. Federal education policy is not 
accomplishing its goals, despite an investment of more than 
$130 billion and the creation of hundreds and hundreds of 
categorical programs over the past 3\1/2\ decades.
    More often than not, in fact, it is the bewildering array 
of Federal programs, regulations and paperwork, that get in the 
way of promising State reforms and local reforms. These 
bureaucratic controls promote a culture of compliance, not real 
accountability, nor a cultural performance.
    We would like to stop funding failure and promoting a 
culture of compliance and start building a culture of 
accountability and achievement for our system. To do this, we 
need to bring to Federal education programs many of the 
strategies that work so well for States and school districts, 
such as increased accountability for student performance, a 
focus on research-based practices, reduced bureaucracy and 
greater flexibility, and better information to empower parents.
    No Child Left Behind provides a blueprint for accomplishing 
this goal, a blueprint that we believe should guide the 
upcoming Elementary and Secondary Education Act 
reauthorization. To provide the resources needed to implement 
his blueprint, the President's budget for fiscal year 2002 
includes $44.5 billion in the Department of Education. This is 
an 11.5 increase in budget authority, an increase of $2.5 
billion. Or if we want to figure it another way, 5.9 percent 
increase over 2001 program level.
    This budget reflects the President's commitment to a 
balanced fiscal framework that includes more reasonable and 
sustainable growth in discretionary spending, also protecting 
Social Security, and for repaying a large portion of the 
Nation's debt, and for tax relief for all Americans.
    The core of the President's proposal is a requirement for 
annual State assessments in reading and mathematics for all 
students in grades three through eight. I can tell you from my 
own experience that there is no substitute for annual 
information on how well students and schools are performing. 
Students in good schools made remarkable progress during these 
early years, and we cannot afford to wait 3 or 4 years to find 
out that some students are falling behind.
    Where there are problems, they must be discovered early and 
addressed immediately. Of course, that can only be accomplished 
with current information that you can receive through annual 
testing.
    The important thing about testing, of course, is what you 
do with the results. We would start by helping teachers learn 
to use data effectively, using data to diagnose student 
deficits. Secondly, we can use data to require accountability 
for schools, school districts and schools. School districts 
will use these results to make sure that all schools and all 
students are making adequate progress yearly.
    We could also use assessment results to strengthen Title I 
accountability by requiring rapid identification of schools 
that need improvement, as well as greater assistance from 
States and school districts to help turn around low-performing 
schools, which can only be identified if we have test data. If 
such schools fail to improve, they should be subject to more 
comprehensive measures, such as an intensive professional 
development program or even reconstitution as a public charter 
school. And students should be given the option of attending 
another public school not identified for improvement or 
correction.
    If despite these efforts, however, a school fails to make 
adequate yearly progress for 3 consecutive years, we should 
permit its students to use Federal funds to find better 
education at a higher performing public or private school, or 
to obtain supplemental educational services from a public or 
private sector provider.
    The President also is proposing a system of rewards for 
States and schools that make significant progress in closing 
the achievement gap while States that fail to improve their 
performance would be subject to losing a portion of their Title 
I administrative funds. Taken as a whole, these proposals 
reflect what I believe to be a strong consensus that States, 
school districts and schools must be accountable for assuring 
that all students, including disadvantaged and minority 
students, meet high academic standards.
    At the same time, we recognize it is unfair to demand 
accountability without enabling success. This is why the other 
components of the President's plan, No Child Left Behind, are 
aimed at giving States, school districts, schools, teachers and 
parents the tools and flexibility to help students succeed. For 
example, we would lower the poverty threshold for Title I 
school-wide programs from 50 percent to 40 percent, thereby 
enabling students, enabling thousands of additional schools to 
use Title I funds to upgrade their entire school.
    We would coordinate educational technology programs to 
reduce the paperwork burden of submitting and administering 
multiple grant applications serving nearly identical purposes. 
We would consolidate overlapping and duplicative grant programs 
and let States and districts decide how to use that share of a 
single grant resulting from this combination of Federal funds.
    In each case, the new flexibility provided States, school 
districts and schools is appropriately balanced by performance 
agreements that will ensure that program purposes are achieved, 
particularly for our poor and minority students living in high 
need districts. We also would create a charter option for 
States that would offer freedom from current requirements 
placed on categorical program funds in return for submitting 5-
year performance agreements that include specific and rigorous 
goals for increasing student performance. States would be 
sanctioned for failing to comply with the performance 
agreements, and would lose their charter if student achievement 
did not improve.
    In conclusion, the education reform proposals contained in 
No Child Left Behind, combined with the President's 2002 budget 
for education, support a comprehensive vision for closing the 
achievement gap and improving the quality of education for all 
Americans. I urge you to give these proposals your careful 
consideration, and I stand ready to respond to any question 
that you might have.
    Thank you, Mr. Chairman.
    [The prepared statement of Roderick R. Paige follows:]

     Prepared Statement of Hon. Roderick R. Paige, Secretary, U.S. 
                        Department of Education

    Mr. Chairman and members of the committee, thank you for this 
opportunity to testify on behalf of No Child Left Behind, President 
Bush's plan to strengthen our elementary and secondary schools and 
close the achievement gap, and to discuss the President's 2002 budget 
for education.
    I want to begin by noting how troubled I was by the recent 
shootings at Santana High School in Santee, California. Violence is 
threatening to become endemic in our schools, and we must work much 
harder to recognize the warning signs and prevent future incidents. No 
Child Left Behind includes proposals designed to strengthen the ability 
of schools and teachers to prevent violence in our schools, and would 
provide flexible Federal resources to help make our schools safe and 
drug-free. Ultimately, however, parents, students, and teachers must 
learn to heed the warning signs of violent behavior, to take the threat 
of violence seriously, and to take appropriate action before a student 
shows up at school with a gun.
    Turning now to the subject of this hearing, I am pleased and proud 
that President Bush has made education his top priority. He announced 
No Child Left Behind in his first week as President, and he has given 
the Department the highest percentage increase of any Cabinet agency in 
his first budget. Our commitment to providing a first-class education 
to all our children is clear, and I look forward to working with each 
of you over the coming months as we make the changes needed to help 
reach this goal.
    Before I get into the details of the President's proposals, I want 
to make a few observations. First, No Child Left Behind is, as the 
President has described it, ``a framework from which we can all work 
together--Democrat, Republican, and Independent--to strengthen our 
elementary and secondary schools.'' This means that within the context 
of principles like State-determined high standards for all, 
accountability for results, choice for parents and students, and 
flexibility for schools and teachers, we are open to your ideas on how 
to meet our shared goals.
    Second, No Child Left Behind builds very deliberately on existing 
efforts at the Federal, State, and local levels to use standards, 
assessments, accountability, flexibility, and choice to improve the 
quality of education for all of our children. Indeed, the President's 
proposals are the logical next step following the changes made in the 
1994 reauthorization of the Elementary and Secondary Education Act 
(ESEA). We are not asking States and school districts and schools to 
drop everything they are doing and start over, but to pursue more 
vigorously the kinds of changes they are already making.
    At the same time, we cannot ignore the need for real change in 
America's schools. While the 1994 reauthorization took some tentative 
steps in the right direction, it did not go nearly far enough. If you 
doubt that the present approach is broken and needs fixing, just 
consider that nearly 70 percent of inner-city fourth-graders are unable 
to read at even a basic level on national reading tests. Or that our 
high school seniors trail students in most industrialized nations on 
international math tests. Or that nearly one-third of our college 
freshmen must take remedial courses before they can begin regular 
college-level coursework.
    And across all levels there is an unacceptable achievement gap 
between disadvantaged and minority students and their more advantaged 
peers. For example, on the latest National Assessment of Educational 
Progress in 4th grade reading, 73 percent of white students performed 
at or above the basic level, compared with just 40 percent of Hispanic 
students and only 36 percent of African American students.
    Our system of elementary and secondary education is failing to do 
its job for far too many of our children--a failure that threatens the 
future of our Nation, and a failure that the American people will no 
longer tolerate. It is just as clear that Federal education policy is 
not accomplishing its goals, despite the investment of more than $130 
billion and the creation of hundreds of categorical programs over the 
past three decades. More often than not, in fact, it is precisely this 
bewildering array of Federal programs, regulations, and paperwork that 
gets in the way of promising reforms at the State and local levels. 
These bureaucratic controls promote a culture of compliance, not real 
accountability measured by improved student achievement.
    It is time to stop funding failure and promoting a culture of 
compliance and start building a culture of achievement and 
accountability in our education system. To do this we need to learn 
from States and school districts across the country that have made 
remarkable progress in turning around failing schools, raising student 
achievement, and closing the achievement gap. We need to bring to 
Federal education programs many of the strategies that have worked so 
well at the State and local levels: increased accountability for 
student performance, a focus on research-based practices, reduced 
bureaucracy and greater flexibility, and better information to empower 
parents.
    No Child Left Behind provides a blueprint for accomplishing this 
goal, a blueprint that we believe should guide the upcoming 
reauthorization of the Elementary and Secondary Education Act. To 
provide the resources needed to implement this blueprint, the 
President's budget for fiscal year 2002 includes $44.5 billion for the 
Department of Education, an 11.5 percent increase in budget authority 
and an increase of $2.5 billion or 5.9 percent over the 2001 program 
level. This budget also reflects the President's commitment to a 
balanced fiscal framework that includes more reasonable and sustainable 
growth in discretionary spending, protection of Social Security, 
retiring a significant proportion of the national debt, and tax relief 
for all Americans.

                      CLOSING THE ACHIEVEMENT GAP

    President Bush believes that the Federal Government can, and must, 
help close the achievement gap between disadvantaged students and their 
peers. The primary means toward this goal is to spend the $9 billion 
Federal investment in Title I more effectively and with greater 
accountability.
    Our proposal would build on current law by adding science and 
history to the existing requirement for States to set high standards in 
reading and mathematics for Title I students. State assessments would 
continue to be required only for reading and math, but would be 
conducted annually from grades 3-8, instead of the current law 
requirement for testing only twice during these critical formative 
years. The President's budget will include funding to support the 
development and implementation of these new assessments. Current 
requirements for testing students in grades 10-12 would be preserved.
    I can tell you from my own experience that there is simply no 
substitute for annual information on how well students and schools are 
performing. Children in good schools make remarkable progress during 
these early grades, and we cannot afford to wait three or 4 years to 
find out that some students have fallen behind. Where there are 
problems, they must be discovered and addressed immediately, an 
approach that can only be accomplished with the information provided by 
annual testing.
    Contrary to complaints about ``teaching to the test,'' or too much 
testing, I believe that teaching and testing are two sides of the same 
coin that we call education. A major part of our current failing is 
because we have been using only one side of the coin, based on the 
flawed notion that we do not need to know where students are 
academically in order to teach them. The reality is that there is 
simply no other way to find out whether students are learning and 
teachers are doing their jobs. Many who say that testing is the 
problem, rather than lack of learning, are really suggesting that we 
lower our expectations because some kids can't learn. I reject that 
because I know from my experience in Houston that it just isn't true. 
We need to set clear goals for performance and help our schools get the 
job done. The alternative is to continue to rob millions of poor and 
disadvantaged young Americans of their futures by failing to provide 
them an effective education.
    The important thing about testing, of course, is what we do with 
the results. We would start by helping teachers learn to use data 
effectively. Secondly, we would require schools to report assessment 
results for all students to parents and the public. School districts 
would use these results to make sure that all schools and students are 
making adequate yearly progress toward State content and performance 
standards, and that no groups of students are left behind.
    Our proposal would strengthen the Title I accountability process. 
Current law requires identification of Title I schools for improvement 
after 2 years of failing to make adequate yearly progress. We would 
identify schools for improvement after just 1 year of failing to meet 
State standards. Roughly half of schools currently identified for 
improvement have received no additional assistance from their State or 
district. We would require States and school districts to provide 
technical assistance grounded in scientifically based research. The 
President's budget will provide additional funding for State and local 
efforts to turn around low-performing schools.
    If the school still has not improved after 2 years, it would be 
identified for corrective action and subjected to more comprehensive 
measures, such as implementation of a new curriculum, intensive 
professional development, or reconstitution as a public charter school. 
While such measures are underway, students would be given the option of 
attending another public school not identified for improvement or 
correction.
    Only after all these efforts, and following three full years of 
poor performance--during which time a student may well have fallen 
behind a grade or two--would we use Federal funds to help that student 
find a better education at a private school. We are proposing to permit 
the use of Title I funds to help students transfer to a higher 
performing public or private school, or to obtain supplemental 
educational services from a public- or private-sector provider.
    The President also is proposing a system of rewards for success and 
sanctions for failure at both the State and local levels. Once 
accountability systems are in place, a new fund will reward States and 
schools that make significant progress in closing the achievement gap. 
At the same time, States that fail to put in place the required 
standards, assessments, and accountability systems, or that fail to 
make adequate yearly progress and narrow achievement gaps, would be 
subject to losing a portion of their Title I administrative funds.
    Taken as a whole, these proposals reflect what I believe is a 
strong consensus, both within the Congress and among the American 
people, that States, school districts, and schools must be accountable 
for ensuring that all students, including disadvantaged students, meet 
high academic standards. At the same time, we recognize that it is 
unfair to demand accountability without enabling success. This is why 
the other major components of No Child Left Behind are aimed at giving 
States, school districts, schools, teachers, and parents the tools and 
flexibility to help all students succeed.

                    EMPOWERING PARENTS WITH CHOICES

    President Bush believes that one of the best ways to improve 
accountability in our schools is to give parents the information and 
options needed to make the right choices for their children's 
education. This is why, for example, our accountability proposals 
include school-by-school report cards and give students in failing 
schools the option of transferring to a better school. In addition, the 
President's budget would expand educational choice through $150 million 
in new funds to help charter schools acquire, construct, or renovate 
educational facilities. We also are proposing to expand the limit on 
annual contributions to Education Savings Accounts from $500 to $5,000. 
Parents would be able to withdraw their funds tax-free to pay 
educational expenses from kindergarten through college.

             EXPANDING FLEXIBILITY AND REDUCING BUREAUCRACY

    The Federal Government has recognized in recent years that it is 
possible to achieve better results by reducing regulations, paperwork, 
and bureaucracy and giving States and communities the flexibility to 
create their own solutions to problems in areas like education, health 
care, and protecting the environment. In education, for example, the 
1994 ESEA reauthorization greatly expanded eligibility for Title I 
schoolwide programs, which permit schools enrolling at least 50 percent 
poor students to combine Federal, State, and local funds to improve the 
quality of education for all students. Congress also created and 
expanded the ED-Flex Partnership program, which gives participating 
States the authority to waive Federal statutory and regulatory 
requirements in exchange for greater accountability for improving 
student achievement.
    No Child Left Behind would build on these earlier efforts to expand 
State and local flexibility in the use of Federal education funds. For 
example, we would lower the poverty threshold for schoolwide programs 
from 50 percent to 40 percent, thereby enabling thousands of additional 
schools to use Title I funds to upgrade the entire school. We would 
coordinate education technology programs to reduce the paperwork 
burdens of submitting and administering multiple grant applications 
serving nearly identical purposes. We would consolidate overlapping and 
duplicative grant programs and let States and districts decide how to 
use their share of the single grant resulting from this combination of 
Federal funds.
    We also would create a Charter Option for States that would offer 
freedom from the current requirements placed on categorical program 
funds, in return for submitting a 5-year performance agreement that 
includes specific and rigorous goals for increased student performance. 
This Option is intended for States on the cutting-edge of 
accountability and reform in education, those that have already 
established tough accountability systems and demonstrated real gains in 
student achievement. States would be sanctioned for failing to comply 
with their performance agreement, and would lose their charters if 
student achievement did not improve.
    President Bush's 2002 budget also would expand flexibility by 
giving States the authority to redirect the $1.2 billion provided for 
school renovation in the fiscal year 2001 appropriation. In addition to 
renovation of academic facilities, States would be permitted to 
allocate even more of their 2001 school renovation funds to special 
education and educational technology than is currently allowed. For 
2002, the President is proposing to redirect these resources to other 
priority programs to help States meet their most pressing needs, 
including special education, turning around low-performing schools, and 
accountability reforms. While renovation and construction are needed in 
many areas, the limited grant funds will not make a significant dent in 
a problem that the National Center for Education Statistics has 
estimated would cost at least $127 billion to remedy. Instead, I 
believe State and local governments must take responsibility for 
financing school repair and construction. The President proposes to 
help school districts meet these demands by allowing States to issue 
tax-exempt private activity bonds for school construction and repair.

                  SUPPORTING IMPROVEMENT IN KEY AREAS

    Other proposals contained in No Child Left Behind are aimed at 
supporting State and local efforts in specific areas like reading, 
teacher quality, math and science, safe schools, and technology.
    Our Reading First program would invest $900 million in 
scientifically based reading instruction in the early grades, with the 
goal of creating comprehensive, statewide reading programs to ensure 
every child is reading by the third grade. The President's budget also 
includes $75 million to help prepare young children to read in existing 
pre-school programs.
    Our Title II Grants for Improving Teacher Quality proposal would 
consolidate the Class Size Reduction and Eisenhower Professional 
Development programs into a flexible, performance-based grant program 
for States and school districts. The President is requesting $2.6 
billion in 2002 funding for the new consolidated program. Most of these 
funds would be used to strengthen the skills and knowledge of public 
school teachers, principals, and administrators. The program also would 
support innovative teacher recruitment and retention practices, 
including bonus pay for teachers in high-need subject areas and in 
high-poverty districts and schools. In return for the flexibility 
provided by the program, States and districts must use Federal funds to 
promote effective, research-based classroom practices, ensure that all 
children are taught by effective teachers, and disclose to parents 
information about the quality of their child's teachers.
    The Title V drug and violence prevention and education program 
would turn the Safe and Drug-Free Schools and Communities program and 
the 21st Century Community Learning Centers program into separate State 
formula grants for before- and after-school learning opportunities and 
violence and drug-prevention activities.
    The new, streamlined grants would reduce administrative burdens, 
give school districts greater flexibility in developing programs that 
address school safety--a major concern of parents and students alike, 
and support improved academic achievement. Participating States would 
be required to develop a definition of a ``persistently dangerous 
school,'' to report on school safety on a school-by-school basis, and 
to offer both victims of school-based crimes and students attending 
unsafe schools options for transferring to safer schools. The President 
also would expand the role of faith-based and community organizations 
in after-school programs, and his budget would triple funding for 
character education to $25 million in 2002.
    Our grants for education technology proposal would consolidate 
several existing and duplicative technology programs and reduce 
paperwork and other administrative burdens while directing more funds 
to the classroom. Funds would be targeted to high-need schools, 
including rural schools, and could be used for a wide range of 
activities, including the development or purchase of software, wiring 
and other infrastructure, and training teachers to use technology 
effectively in the classroom.
    All of these proposals adhere to the core principles of No Child 
Left Behind by expanding flexibility, reducing bureaucracy, and 
increasing accountability. In each case, the new flexibility provided 
to States, school districts, and schools is appropriately balanced by 
performance agreements that will ensure that program purposes are 
achieved, particularly for poor and minority students living in high-
need districts.

                        OTHER BUDGET PRIORITIES

    The details of the President's 2002 budget for education will be 
released on April 3. There are two priorities, however, that I would 
like to mention briefly today. The first is special education. We 
remain committed to helping States meet their obligations under the 
Individuals with Disabilities Education Act, and the President's budget 
will provide increased funding for the Part B Grants to States program.
    The second priority is funding for Pell grants, the foundation of 
Federal student financial assistance for postsecondary education. The 
2002 budget includes a $1 billion increase for Pell grants to raise the 
maximum award for all students and provide more need-based grant aid to 
low-income college students.

                               CONCLUSION

    The education reform proposals contained in No Child Left Behind, 
combined with the President's 2002 budget for education, support a 
comprehensive vision for closing the achievement gap and improving the 
quality of education for all Americans. I urge you to give these 
proposals your most careful consideration, and I stand ready to answer 
any questions you may have.

    Chairman Nussle. Mr. Secretary, thank you so much for your 
testimony.
    First of all, let me hit head-on this whole issue about 
percentages and increases. I've heard some criticism in the 
media, and I want to allow you the opportunity to take it head-
on. This is the way that I see the math.
    Under the President's proposal, the Department receives 
$44.5 billion in budget authority in this coming fiscal year 
that we're about to budget for, up $4.6 billion from the $39.9 
billion in fiscal year 2001. So $44.5 above the $39.9. I don't 
care what appropriation bill you're talking about, that at 
least from what I can see looks to me like the kind of increase 
that was suggested at 11.5 percent.
    Now, I understand there's this little game that gets played 
called advance appropriations, and there are some who play the 
game a little bit better than others. But I think that it's 
widely believed that advance appropriations is somewhat of an 
irresponsible way to budget. We can have that debate at another 
time. But the bottom line is that that may skew somebody's 
belief about what the percentages are.
    This increase, and this is really my question, isn't it 
true that this increase, however defined, comes not only as an 
increase for 2002 but it comes on top of a Department budget 
that has averaged about 13 percent over the last 5 years? I 
mean, I understand that every time we talk about these 
percentages, we look kind of in a vacuum and we say, well, it's 
only this or it's only that.
    But I really believe we've got to start looking at these 
budgets in a little longer term perspective. Over the last 5 
years, we have increased, rightfully so, I'm not arguing that 
the percentages for our kids in education have not been 
appropriate, but it's been 13 percent. So when we build an 
additional now 11.5 percent on top of it, I mean, that's real 
money.
    I think what you're suggesting to us is don't just look at 
the percentages, let's talk about accountability, what are you 
doing with the money.
    Secretary Paige. Absolutely.
    Chairman Nussle. And so how would you respond to this whole 
percentage debate that is out there right now?
    Secretary Paige. I would agree with you completely. There's 
an 11.5 percent increase in budget authority. However, on a 
program level, that translates to a 5.9 percent increase. You 
can make a case for both figures. The difference depends on how 
you count the dollars. The Government counts dollars, as all of 
us know, in several different ways.
    But our view is not so much how much we increase or how 
much additional resources, but what those resources return to 
us. We think there are many things that need to be done with 
this program that don't require dollars as we would have.
    We know that more is necessary. And we think that more is 
being provided. But there are many things that we need to focus 
on, including what returns are we getting for the dollars that 
we are spending. Because if those dollars are not coming back 
to us in terms of returns, student achievement increase, of 
what value are the dollars?
    So our focus is on effectiveness of the program, and that's 
what we're trying to provide for now.
    Chairman Nussle. Mr. Secretary, IDEA is one of the 
bipartisan issues that this committee and this Congress has 
worked on over the last 5 years in particular. I can personally 
identify members on both sides of this committee table up here 
that have very serious personal interests in this program.
    Over the last 5 years, we've been able to increase the IDEA 
special education funding by about 23 percent annually over 
these past 5 years that we're talking about. The President's 
budget indicates that IDEA will receive an increase, but there 
is no amount in the blueprint that has been specified. It says 
that full funding, while it is still an objective, certainly 
will not be met by any budget that I've seen right now.
    It does allow for what is called redirection of $1.2 
billion in fiscal year 2001 money appropriated for school 
renovation, making these funds available to the States for 
school renovation, technology incentives, or special education. 
Would you explain that portion of that part of the blueprint? 
And in particular, you've also testified, as I understand it, 
that you're concerned about the definitions. You're concerned 
about the way that children are often labeled or identified, 
which I share your concern. I'm interested in your perspective 
on both those issues.
    First, how does the President and how do you intend to fund 
special education in this budget, number one, and number two, 
what reforms would you suggest to this committee that maybe we 
could assist you with in the budget we're about to write?
    Secretary Paige. Thank you, Mr. Chairman. The President and 
I look forward to working with Congress to increase funding for 
IDEA. We're proud of the progress Congress has made since 1996 
in increasing the Federal share from 7 percent to 15 percent to 
about 16 percent now in fiscal year 2001.
    Substantial increases, but not nearly enough, I can promise 
you, based on my experience of 7 years leading the seventh 
largest school district in America. We can say with great 
conviction that this is a very serious problem, and serving 
students eligible under IDEA sucks off dollars from other 
program functions in the district.
    So we agree completely that increased funding for IDEA is 
appropriate. But we also know that programmatically it needs 
some adjustment. For example, of approximately 6 million 
students served, ages 6 through 21, who are being served now 
across the United States, estimates as high as 51 percent of 
those students are there because of their designation of 
learning disabled. We believe, and we have substantial evidence 
to support this, that as much as 80 percent of those students 
who are identified as learning disabled are actually there 
because they've never learned to read properly. They've never 
been taught to read.
    So we believe we can make a case that although the funding 
is at the level it is now, that many of the dollars that are 
there are being used ineffectively. Because these dollars are 
serving students who shouldn't be identified in special 
education in the first place.
    So then we believe we can also make a case that those 
dollars in this budget supporting No Child Left Behind which 
are targeting early reading and Reading First Programs, may 
even be able to be counted as dollars supporting, reducing the 
number of students who are going to be eligible for service 
under this law.
    We believe that we need additional funding. But we also 
believe that we're not going go fund our way out of this 
crisis. What we need to do is take a careful look, thoughtful 
people jointly, all parties involved and all stakeholders, in 
how we can improve the functioning of the law. Now, 
reauthorization comes up next year, or is it the year after 
next--in 2003. And we're preparing now to develop a framework 
under which we can join with other thoughtful people who are 
interested in this issue to see if we can improve it. Because 
it's not a matter of how many dollars, it's a matter of the 
quality of service that we're providing students and how many 
students we are providing services for. We can improve this.
    But I don't want to narrow our concern to how many dollars 
we put into the program.
    Chairman Nussle. Well, in conclusion, I can't argue with 
your suggestion that some reforms may be necessary. I will say, 
however, just for the record, and this is just one member 
speaking, but I am much more interested in making sure that the 
obligations that we have already agreed to are taken care of 
before we start thinking about or inventing new ideas and new 
programs.
    I would hope that while 2003 is the current reauthorization 
time frame that if you have any thoughts on reformation of the 
program, reformation of the principles or the definitions, that 
they be forwarded as soon as we can. Because in the meantime, 
funding is driving this issue, as you know. I'm acting like I 
know more about this than you do. You've lived under this as an 
administrator. I know you do know that.
    But this Congress, and I'm just reporting to you, Mr. 
Secretary, that this Congress, in a bipartisan way, has spoken 
many times on special education. I believe the signal that we 
have sent to the administration is, we want to take care of 
that issue almost as much or before we start tackling some new 
ideas. So our budget that we're putting together is going to 
take that into consideration.
    I would just hope that anything we can do to expedite the 
reforms under IDEA, if there are those that are suggesting 
that, count me in as a partner. I'd love, and I know there are 
many here on the committee that would enjoy working with you on 
that. Count us in as partners. We're ready to work and do the 
heavy lifting that it takes to put something like that through.
    But time is of the essence, as far as I'm concerned.
    Secretary Paige. May I just add that there will be 
increased funding in this year's budget for IDEA. The level of 
increase, however, is yet to be determined. I suppose we'll 
know that about April 3. So I don't want to give you the 
impression that there won't be increased funding. There 
definitely will be increased funding.
    However, our information suggests that it takes somewhere 
in the neighborhood of $11 billion to $11.5 billion on top of 
what we have now to reach the 40 percent level, depending on 
how we define 40 percent. So clearly we are not going to leap 
tall buildings in a single bound, we're going to get there 
incrementally. So there will be some additional discussion 
about that.
    We're simply saying that in the final analysis, where I 
know we must keep our promise and must move toward that, but 
also, we need to serve students better. We think those students 
who are truly disabled, we're having dollars serving students 
who just need to be taught to read, so in some ways, we're not 
serving those students well. That's the reason for the 
suggestion about the overhaul.
    Chairman Nussle. Thank you very much.
    Mr. Spratt.
    Mr. Spratt. Thank you very much.
    When we look through this budget, given the attention that 
was given to education in the last election, we were sort of 
reminded of the old Biblical adage that where your treasure is, 
there also is your heart. I'm not talking about you, I'm 
talking about the administration. I don't have any doubt where 
your heart is when it comes to education, Dr. Paige.
    But that's why we're looking for how much additional money 
is actually being provided here, and the first page of the two 
pages we get in this blueprint of the budget simply states that 
we're providing $2.5 billion or 5.9 increase after correcting 
for the distortion of advance appropriations. That's how much 
new money there is for next year, $2.5 billion. The other money 
is already appropriated. And while as I said, 5.7, 5.9 percent 
is a welcome increase, it's a long way from what we've been 
accustomed to, and it's a long way from what the actual needs 
of American students are.
    The second frustration we have in looking through this is 
we get two pages of detail. And we're wondering, where does 
that $2.5 billion, $2.4 billion get allocated? What's going to 
happen to Title I? What's going to happen to IDEA and special 
education? What's going to happen to a couple of programs that 
we've found very successful in our school districts, like the 
After-School Program, the 21st Century Learning Center Program, 
and the class size initiative? Is there enough here to 
accommodate all those programs, or if not, what's going to take 
a hit? What can we expect when we see the budget detail come 
that accompanies this scant outline that's been sent up here?
    Secretary Paige. Thank you. I wish I was able to provide 
more detail for you. The final numbers won't even be available 
to us until the third of next month, at which time those 
numbers will be made public.
    But our approach to this has been a little bit different, 
and maybe there could be some second thoughts about that. But 
our idea was to provide a framework around which we could have 
discussions about the details. So we think those details are 
going to be fleshed out and discussed, and even the budget 
amounts. What is going to result is going to be a number that 
we all agree on, or at least the majority agrees on.
    Mr. Spratt. Well, when do you think we'll have the detail? 
Because we're going to mark the budget next week.
    Secretary Paige. April 3.
    Mr. Spratt. Well, that will be after we've marked our 
budget up here. So we're sort of marking in the blind, given 
the schedule we're on right now. Because we don't know whether 
this amount of money will accommodate what, or what you have in 
mind squeezing in order to divert funds into something else. 
Could you give us some idea of what likely funding levels are 
going to be, for example, for IDEA and ESEA, Title I?
    Secretary Paige. Without the details of that, sir, I can 
simply say that the numbers will be increased. I don't know the 
levels of that increase. I don't have that information now. I 
won't have that until the third.
    Mr. Spratt. Well, you were saying just a minute ago, you're 
obviously not going to leap whole buildings in a single bound. 
I liked that phrase. But we don't expect you to be Superman, 
but for example, the class size initiative. One of the reasons 
we've seen substantial percentage increases in recent years is 
that each year, the President has been able to extract an 
increment to this budget specifically for that class size 
initiative. Can we expect to see that funded, so that we will 
indeed approach the goal of having 100,000 new teachers, so we 
can reduce class size in grades 1 to 3 to no more than 18 
students?
    Secretary Paige. Sir, as superintendent, I enjoyed the 
benefits of the categorical funding for our class size 
reduction in a school district with approximately 300 schools. 
I would like to make an example. We know that all things given, 
smaller is better. We would all like to have smaller class 
sizes.
    But we think that it is a mistake to believe that smaller 
class sizes in and of itself translates into improved student 
achievement. It does not. There are so many other factors 
impacting on that that have equal weight as class size 
reduction. Keep in mind, I would like to have it, smaller is 
better if everything else is even, which it is not.
    For example, if you have a very effective teacher with a 
class size of 40, and you make the classes smaller by half, by 
dividing with another teacher, so each one has 20 students, 
unless you can replicate that very effective teacher for the 
second class, what you've done is disadvantaged some of the 
students who left and went. And the only ones who are 
advantaged are the 20 who stayed.
    So then I would have preferred actually to have the 
advantage of using some of those dollars that I was prohibited 
from using to get improved teacher effectiveness, for example, 
to be able to send teachers to professional development 
programs. So there will be additional funding there----
    Mr. Spratt. The program allows that if you've attained your 
class size ratios, does it not?
    Secretary Paige. I'm sorry?
    Mr. Spratt. The program allows the use of this money for 
professional development if you've attained the 18-to-1 ratio?
    Secretary Paige. If you were able to do that, but in most 
cases, you were not. So the flexibility would be appreciated to 
use those dollars in a way to gain efficiencies that you and I 
both seek. In this budget, that would be $2.6 billion that 
would be for teacher quality. Now, the professional on the 
scene can decide to use those dollars to reduce the class size 
if they think that's the best thing to do. I would be able to 
use those dollars to provide professional development for the 
teachers, if they decide that's the best thing to do.
    The sum and substance is that it is there to improve the 
quality of instruction, which we believe is what you seek in 
narrowing the number of students for an individual teacher.
    Mr. Spratt. So does this mean there will be less money, or 
the money will be spread over more purposes, it will be less 
categorical?
    Secretary Paige. There will be more money, but there will 
be more latitude provided for the use of those dollars.
    Mr. Spratt. One other question at the other end of the 
spectrum. The President in his campaign came out for increasing 
the Pell grants, which went up to $3,750 last year, on to 
$5,100. Are we within reach of that? Will your budget be able 
to move us significantly in that direction?
    Secretary Paige. The Pell grant program I think will be 
increased by $1 billion.
    Mr. Spratt. And what will that likely take the individual 
ceiling to, per student?
    Secretary Paige. The original idea was to have front 
loading by raising the level to $5,100 for the freshman year. 
After some consultation with the higher education community, it 
was decided better to look across the board with this funding, 
which reduced the amount from $5,100 to a smaller amount, and 
I'm not sure what that amount will be. April 3.
    Mr. Spratt. Are you saying you would reduce the per capita 
amount but change the eligibility requirements so that more 
students are eligible?
    Secretary Paige. The original idea was to increase the 
funding level from $3,750 the freshman year to $5,100.
    Mr. Spratt. Yes, sir.
    Secretary Paige. But it would revert to the $3,700 for the 
junior-sophomore, junior-senior year. Considering the advice of 
the higher education community and those who know, that 
philosophy shifted somewhat, and now, the same amount of money, 
instead of being spent all on the freshman year is now spread 
across 4 years.
    Mr. Spratt. I understand what you're talking about. Yes, 
sir. Good.
    Thank you very much. Let me let others ask questions. We 
appreciate your responses.
    Chairman Nussle. Mr. Sununu.
    Mr. Sununu. Thank you, Mr. Chairman.
    Welcome, Secretary Paige. I very much appreciate your 
testimony and do want to emphasize the importance of IDEA and 
special education funding and the degree to which we appreciate 
President Bush's focus on the program and, of course, an 
emphasis on strengthening funding and strengthening 
flexibility, but also your recognition that the program itself 
needs to work better for those parents that have children with 
special needs, and that we need a program that doesn't divert 
funds into legal costs or administrative costs, but that 
actually brings dollars into the classroom and meets what is in 
fact the largest unfunded mandate we have in the Federal 
Government.
    So I wish you good luck and express my willingness to work 
with you as we try to strengthen funding for special education, 
make the program work better for parents and students that 
really do have strong and pressing needs.
    Second, I want to express my thanks for your simple 
recognition that we do need to set priorities and recognize 
that a good idea isn't always the best idea or the top 
priority, and in particular, on class size, that you may well 
put students at disadvantage if you simply reduce class size 
without dealing with the need for a quality teacher, for other 
enhancements, infrastructure, training, technology, all of 
these things could be at least as essential, if not more 
important, to a student's education than just reducing class 
size.
    I was struck by the precise words used in the previous 
questioning, that emphasized that funding could be used for 
improving the quality of teachers, but only after a certain 
ratio had been hit. That would suggest that the good teachers 
would only be available to students once you have cut up your 
classrooms, divided all the students without dealing first with 
the issue of human resources or teacher pay or testing, 
whatever might work most effectively at the local level.
    I think it would be a terrible mistake to push and push and 
push for some arbitrary goal without dealing with education 
priorities in their proper context and without recognizing that 
local input. That's something that you obviously have done in 
your experience as superintendent. It appears clear that 
President Bush is willing to do that and to recognize that we 
can't just set an arbitrary goal without understanding how the 
different elements of education reform work with one another.
    Finally, I'd like to touch upon and ask you about 
flexibility, this idea of local flexibility in ensuring that 
it's parents, teachers, students at the local level that are 
setting the priorities and deciding what's most important for 
improving education for them, again, whether it's teacher 
quality or training, technology, or class size reduction. There 
are over 200 programs in the Department of Education, and I 
think that number carries with it enormous costs on a couple of 
levels.
    First, there is your administration and the cost of 
employees and staff and time, overhead necessary to understand 
and manage those 200 or more different programs. But there's 
also the bureaucratic cost at the local level, to have a grant 
writer full time or half time in a smaller school district, or 
multiple grant writers in a larger district that are marshaling 
all of these different applications. That's expensive, very 
expensive to maintain.
    President Bush appears to have recognized opportunities for 
consolidation, for reducing the number of funding streams to 
support education reform and priorities on the local level. I 
think in particular in areas of training and technology we've 
seen a proliferation of programs in the last few years. Could 
you address for the committee what you see as the greatest 
opportunities to bring this explosion in program numbers under 
control, consolidate funding streams and get the program to the 
local level where it can do the most good?
    Secretary Paige. Yes, sir, and thank you.
    We believe that Congress wants very badly these dollars 
spent as they intend for these dollars to be spent. As going 
about that by writing regulations that would guide that and 
would require that specific type of use. Whereas we think 
that's laudable, from the practical end of it, we can see that 
in many cases your very intent has been thwarted by the 
accumulation of just piles and piles and piles of regulations.
    What it does is prompt a culture of compliance as opposed 
to a culture of performance. So success begins to be measured 
by whether or not you followed the regulations and guidelines. 
In many cases, you've lost, to some extent, the focus of what 
you're trying to accomplish in the first place. We believe that 
Congress' intent can be carried out by establishing a system of 
accountability, by very clearly defining what the result should 
be and asking for that result to be measured and evaluated.
    There are many opportunities for consolidation inside the 
more than 200 different programs that we have just in this 
Department, which we could expand by looking at programs both 
in Health and Human Services and sometimes in Justice and other 
places. Competing with each other, conflicting with each other, 
bumping into each other, causing havoc.
    The system's response to increased regulations is 
bureaucracy. So as you promulgate policies and rules, the 
system responds by building up bureaucracy to protect itself 
from it. So what we would like to do is change that whole 
culture to a culture of performance which says, here are the 
resources, here is what we want to result from those resources, 
here's how we're going to measure those resources. And if our 
goals are not accomplished here, or the consequences or 
rewards.
    It's somewhat of a culture shift, but I believe that 
somewhere in the middle here, this situation of increasing 
categorically approaching this issue can be changed to a 
broader, more consolidated initiative.
    Mr. Sununu. Thank you, Mr. Secretary.
    Chairman Nussle. Mr. Bentsen.
    Mr. Bentsen. Thank you, Mr. Chairman.
    I'm pleased, Mr. Secretary, to welcome you here as well. 
The Secretary is a constituent of mine, and the school 
district, of which he was a very successful superintendent, 
overlaps both my district and Mr. Culberson's district. We were 
sorry to see him go, but we expect better things from him now 
at the national level. We think the President made a very wise 
choice in bringing him up here.
    Mr. Secretary, I have a couple of questions for you. I want 
to follow up just briefly on Mr. Sununu's question. I think 
you're right with respect to the concerns of compliance, but 
you also hit on a point that is often overlooked. I appreciate 
the fact that you did that. We in Congress have a fiduciary 
responsibility to the taxpayers to ensure that their funds are 
spent as they should be spent. And I think that the 
administration is generally on the right track with that, 
perhaps trying to move from a compliance-oriented goal to a 
performance-oriented goal.
    I do have one concern, and you don't necessarily need to 
answer this, but I would like you to think about it. In using a 
performance oriented goal and then if the school or the 
district does not meet the performance, even if there may be 
malfeasance, and I know we don't like to talk about things such 
as that happening, but we have to be responsible for that, to 
then say somehow you're going to drain resources out of it 
because they didn't meet the performance goal, that they may 
well not have complied at all, may not be achieving the goals 
you want to achieve or Congress wants to achieve. So I would 
hope you would take a look at that.
    I want to go back to the question of IDEA funding. I have 
to say, I hope I'm not revealing any confidences here, I can 
remember on a couple of occasions, one in particular, sitting 
between you and your predecessor at a lunch in Houston where 
you were quite specific and quite adamant that you viewed 
special education funding as perhaps the worst unfunded mandate 
Congress ever imposed. I think we had a very long conversation, 
actually I was just in between the conversation, between you 
and Secretary Riley, on that issue.
    I, as well as a number of others, have followed our 
colleague Mr. Bass' lead in a bill that he's probably going to 
bring up with you, H.R. 737, which he has introduced, which 
would establish both a per student formula for funding IDEA as 
well as a plan to achieve the 40 percent Federal funding of it. 
I would be eager to hear your comments on that particular bill. 
I know that when you testified before the Senate the other week 
regarding the Hagel bill, you raised some concerns on behalf of 
the administration on having an absolute figure. The funding in 
this bill would be on a per student basis, so I think it might 
meet your goals in particular with the goal of the early 
reading initiative on the part of the administration, which 
might lessen the number of students who are in the learning 
disability category.
    Although I would also reference testimony the other week, 
by Dr. Reid Lyon of the National Institute of Child Health and 
Human Development of the NIH, in which he said in commending 
the administration on that program, that if successful, the 
learning disability levels could be reduced by about two-
thirds, and even using your figures, that would still leave 4-
million-plus kids in the special education.
    Secretary Paige. Right.
    Mr. Bentsen. And still, if we're only funding at 18 percent 
as opposed to the 40 percent, we are still far below where we 
should be. So I would be eager to hear your position and the 
administration's position on trying to achieve a goal of per 
student funding basis to eventually get us to 40 percent, 
whether it's in the form of Mr. Bass' bill that I'm one of the 
original cosponsors of, and many members of this committee are, 
or some other basis.
    Secretary Paige. Yes, sir. May I begin by thanking you for 
your leadership and your assistance with the program structure 
at the Houston Independent School District. You were a great 
friend of our district, and we deeply appreciate that.
    I also want to thank you for your personal friendship in 
granting me access to Secretary Riley in the many meetings we 
had about that. My idea about it as an unfunded mandate has not 
changed. It is. And I was unable to comment further about the 
bill because I don't know the details of it. I have not had a 
chance to see the details of it and I don't want to make an 
error before I have a chance to see it.
    And it is not my argument that we should not have increased 
funding for IDEA. We most certainly should. It is one of the 
most painful things that is happening to superintendents and 
teachers and principals down at the action end of this.
    But there are other issues. Just creating that goal of 
funding at 40 percent and going away is not going to make it 
safe for democracy. There are a lot of problems. For example, 
there are about 814 different regulations under this act. And 
people are pulling their hair out, not me, obviously, because I 
succeeded in doing that earlier----
    [Laughter.]
    Secretary Paige [continuing]. In trying to stay in 
compliance with those rules. So we're simply saying that it is 
a broader issue, we do need to increase funding. We also need 
to keep our promises. But we also need to be aware of the fact 
that there are other difficulties associated with this.
    Mr. Bentsen. Thank you, Mr. Chairman.
    Chairman Nussle. Mr. Bass.
    Mr. Bass. Thank you, Mr. Chairman.
    Excuse my weak voice today. I think I got John Nagle's 
wife's--Debbie Dingle's problem. Anyway, you're going to get 
hit twice here, because I'm glad my friend from Texas was able 
to bring up the legislative proposal he's been so kind to 
cosponsor along with me involving the issue of IDEA. I'd also 
like to associate myself with the remarks of the chairman of 
the committee and also your remarks, Mr. Secretary, in which 
you say we can't solve this problem overnight.
    But I've got to tell you that all over this country right 
now, school boards are meeting, school districts are meeting 
and budgets are being put together. The special education issue 
is tearing the heart out of public education in this country.
    Now, you mentioned that there are indeed priorities for 
programmatic reform within the system. And I agree totally with 
you. But I've been here for 7 years now. And we've been through 
one reauthorization that, when you get right down to it, did 
very little to correct the programmatic problem in special 
education.
    So I've come to the conclusion that the only way we are 
going to address both the funding issue and the programmatic 
issue is through the budget process, initially through this 
committee. That is to phase in the funding of special education 
on a per pupil basis, as Mr. Bentsen alluded to. What this does 
is, not only does it relieve the horrible funding situation 
that exists in every community in this country, but it also 
forces this committee and the Education and Work Force 
Committee to reconcile the cost of the program to a budget 
which does not happen today. Not only does that help with the 
cost on a Federal level, but it also saves every single 
property taxpayer in this country money that may be needlessly 
spent.
    If we fail to do this, we will have the debate every year 
about 16 percent and 17 percent. And I laud the Congress for 
increasing it so significantly. But I would hope, Mr. 
Secretary, that you would take a very careful look at this 
concept, because from a budgetary standpoint, of course, it 
does reduce the discretionary spending level for education in 
general. But it adds it, of course, on the mandatory side.
    But what it will do is put pressure on this institution to 
make this program work. It's been a good program, but there 
have been some problems with it.
    And you say that it isn't just a matter of dollars. Well, 
there are programmatic problems, but it is a matter of dollars. 
And there are small communities in this country where 20, 30, 
40, 50 percent of their entire education budget goes to one or 
two students. And we make the rules here in Washington, we make 
the rules. We are responsible for that. And I've made it a 
priority in the last 5 or 6 years to get the funding level up. 
And $200 million to $300 million, as they say, just ain't going 
to do it.
    I hope, Mr. Secretary, that you will look at this. I know 
you understand the problem as well as anybody in this country 
and that we can make this a priority in this administration's 
budget.
    Mr. Chairman, I'll yield back.
    Chairman Nussle. OK. Ms. McCarthy.
    Ms. McCarthy. Thank you, Mr. Chairman.
    Welcome again, Secretary Paige. I've had the pleasure of 
being able to talk to you, I guess this is about my third or 
fourth time now, between Education here, and just meeting with 
us privately.
    I want to go back to class size reduction, and I also want 
to talk about after-school programs. I came here to Congress to 
try to reduce gun violence in this country. I happen to think 
that when we start talking about reducing class sizes, that's 
one area to go. I do believe that we have to have qualified 
teachers in every single one of those classrooms. But they have 
to go hand-in-hand.
    We know from talking to teachers across this Nation that 
when they only have, I happen to think that we should reduce 
class sizes, in the early grades especially, to 15. That's when 
we see the most dramatic results, and all the research shows 
that. But it also gives the teachers the opportunity to reach 
out to those students that, not that they learn differently, 
but maybe need some special attention. We've seen statistics 
that show that that kind of works together.
    The after-school programs, obviously working with kids that 
don't have any place to go after school, would have a place not 
only to learn, but to be fostered with people around them that 
have knowledge. These are areas that we can work on. I hope 
that when the budget comes out on April 3 that you will have 
some input, that these are areas that are extremely important 
to the children around this Nation. It used to be only inner 
cities that we worried about gun violence. Well, that's not the 
case any more. And as a nurse, I've always said, if you don't 
take care of the cancer, it's going to spread. Well, it has 
spread.
    We have the opportunity to do something about this. 
Education is going to be the forefront of working with an awful 
lot of these students, because we have these kids, they're in 
our buildings every day. So we have to make sure that they're 
getting the special needs that they need.
    Talking about kids with learning disabilities, I certainly 
grew up with learning disabilities, my son has learning 
disabilities. One of the things I've found out since being in 
Congress, it's not so much that I have learning disabilities, I 
actually learn differently. And I'm hoping that when we finish 
up with funding for IDEA and everything else, we'll actually 
say, these kinds learn differently. We don't have a disability, 
we just learn differently. There are tremendous programs out 
there that we can work on.
    I brought Secretary Riley over to a school over here in 
Washington, the Lab School. I hope that I can bring you over 
there to show how they have individual programs for each and 
every child. We can't afford it, unfortunately. But I have to 
tell you, 98 percent of those kids, when they graduate, go to 
college. I think that's a great testimony, so we can learn from 
a lot of things.
    So I hope when you go back and they start figuring out the 
budget, think of the money that we will be saving on the long 
end if we have the after-school programs, if we have the class 
reduction, if we have the teachers in the smaller class. In the 
long run, the more we invest in our children at the early age, 
the amount of money on health care, on the programs for IDEA, 
teaching these children to read, to give them self-confidence, 
you can't even put a dollar price on that. You can't.
    And those are things I'll be fighting for on this 
committee, and on the Education Committee, and I would love to 
work with you on those areas.
    Secretary Paige. Thank you.
    Ms. McCarthy. And I yield back.
    Chairman Nussle. Mr. LaHood.
    Mr. LaHood. Mr. Secretary, thank you for being here, and 
thank you for your leadership in education. I'm very proud to 
say, I'm one of three members of the House that voted against 
IDEA, because I knew it was going to be a big, huge mess. And 
it has been a big mess. And as a former superintendent, I know 
that you know it's a big mess. It's a big, bureaucratic mess 
that's ill-served the people that it was meant to serve. So I 
make no apologies for voting against it.
    One of the real important aspects of No Child Left Behind 
that has been the most controversial is the notion of vouchers 
that have, after a period of time, 2 or 3 years, school 
districts don't achieve or live up to the standards that 
parents should have an opportunity to maybe look elsewhere. I'm 
curious, I know you did a lot of innovative things in Houston. 
Did you have a voucher program in Houston?
    Secretary Paige. We had a program of parental choice. We 
didn't call it a voucher program, but we had private school 
contracting. We contracted with private schools to deliver 
educational services. And we made these schools available to 
parents of students who were enrolled in low-performing schools 
and whose students themselves were low-performing, could opt 
out of that low performing school and attend another public 
school, or they could attend a private school, as long as that 
school was approved by the Texas Education Agency and the 
Houston Independent School District.
    Mr. LaHood. Were they given money to do that, then?
    Secretary Paige. They were given money to do that, yes.
    Mr. LaHood. How much money?
    Secretary Paige. In our case, about $3,750, I think, per 
year.
    Mr. LaHood. Thirty-seven hundred and fifty dollars?
    Secretary Paige. Yes.
    Mr. LaHood. Per year?
    Secretary Paige. Yes.
    Mr. LaHood. What is the cost of educating a child in the 
Houston system? I mean, how does that----
    Secretary Paige. Houston school district, a little better 
than $4,000, $4,500, something.
    Mr. LaHood. So it was pretty close to the amount of money 
that it costs to educate a child.
    Secretary Paige. Absolutely. And the reason the entire 
amount didn't go is we still kept responsibility for that 
child, our supervisors still attended to see if the child was 
progressing, and that child's scores counted on our 
accountability.
    Mr. LaHood. What percent of the parents opted to do this?
    Secretary Paige. A very small percent of them opted to do 
it, because we were concurrently working on our system, so our 
schools were better. We believed that we could out-perform 
private schools. We said we could provide them that choice, 
because when they made the choice, they'd choose us because we 
were better. In the last year of that program, of course, this 
year, they're expanding it, they expanded it this year, there 
were 173 kids who were eligible under that program. We wrote to 
their parents to advise them that they were eligible. We wrote 
letters to the private schools to advise them that these kids 
were eligible, just to make sure that they would make a choice 
on their own.
    Mr. LaHood. The $3,700, did that come out of your budget? 
State budget?
    Secretary Paige. In Texas, we're funded on an average pupil 
attendance. That was that amount of money.
    Mr. LaHood. So you, rather than going to your district, it 
went to the parents so they could then----
    Secretary Paige. It went to us and we sent it to them.
    Mr. LaHood. Did you send it in the form of a check or what? 
How did they get it?
    Secretary Paige. Sent it in the form of a check to the 
school that we had a contract with.
    Mr. LaHood. I see. Would you be willing to forego the term 
voucher in lieu of a term that you used in Houston under a 
system that seemed to work where very few parents opted to use 
that system? The question is, the controversy is around the 
term voucher. But it seems to have worked under a different 
nomenclature in your district, where you came from. And it's 
worked in other States under a different nomenclature, and 
you've proven that it works.
    Secretary Paige. Yes, we think so.
    Mr. LaHood. Well, my question is, would you be willing to 
forego, as the Secretary of Education, and try and persuade the 
President that if the word voucher is the controversial part of 
it, but the idea has standing because it's proven to have 
worked in the Houston school system. I'm trying to help the 
administration figure out a way to replicate what's worked in 
Houston in a small way that didn't distract or take away from 
the amount of money that you were able to do, because you were 
doing a good job. You had charter schools and maybe you had 
Edison schools. I don't know, you did a lot of different, 
innovative things.
    And if we challenged schools in America to be innovative 
and do different, creative things, the vast majority of parents 
will stay with those schools, as was the case in Houston.
    I'm just wondering what you think about the whole idea of 
the term voucher that seems to be so controversial.
    Secretary Paige. Well, since that term was put in the 
public lexicon, it's acquired a negative connotation. So we 
don't have that term anywhere in No Child Left Behind. It 
doesn't occur there.
    Mr. LaHood. So you don't use it?
    Secretary Paige. No.
    Mr. LaHood. Under the President's plan, they talk about 
this notion of giving school districts, or you do, talk about 2 
or 3 years to meet certain standards. Where did you come up 
with that notion? Is that about the amount of time that----
    Secretary Paige. That was the current thinking of the group 
that was deliberating at the time. Very frankly, I think a 
period of 3 years, almost every case, the school will improve 
to the point where they won't trigger that type of portability 
issue.
    Mr. LaHood. How long will it take them?
    Secretary Paige. And even if it did, I think that the 
number of students who would choose to move out of that would 
be very small.
    Mr. LaHood. Well, I didn't ask any budget questions, but I 
guess I wanted, this whole issue of education is so 
controversial, and I just wanted to get those issues out on the 
table. Obviously you were picked for this job because of the 
district you come from, where you've had some success with some 
of these issues. I assume you really believe that they can be 
replicated around the country, particularly in some districts 
that have not been successful.
    Secretary Paige. I think many of those ideas would be the 
best thing that could happen to especially disadvantaged 
students in terms of closing the achievement gap.
    Mr. LaHood. Thank you, Mr. Chairman.
    Chairman Nussle. Actually, Mr. LaHood, those are good 
budget questions, and we welcome you to the committee. You and 
Ms. Granger from Texas and Mr. Doolittle from California are 
members that have recently been appointed from the 
Appropriations Committee. We welcome and we look forward to 
your service.
    Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman.
    Again, welcome, Secretary. It's good to have a professional 
educator at the helm. It must feel good to be in the driver's 
seat rather than the passenger seat.
    Secretary Paige. Sometimes it doesn't.
    [Laughter.]
    Mr. Honda. Well, you know, being a professional educator, I 
think that the expectation becomes even higher, because people 
will say, well, you should know better. So I think that in our 
discussions in this committee, I know that there's a 
disadvantage in the sense that the detailed budgets are not 
fully prepared, and I'm disappointed, but that's the way it is. 
And we have an outline which is not specific enough for us to 
be able to have a good, hard conversation, but we can talk 
conceptually, I suppose.
    I've heard a lot about the terminology IDEA and special 
education. Let me just digress for a second, if I may. We're 
talking about heightened standards, which is an issue that's 
sort of taken center stage in our ongoing national debate on 
how to improve our Nation's public schools. As a former high 
school teacher, as a principal, and as a board member, I agree 
with the President and yourself, Mr. Secretary, that we must 
hold our students and our teachers to high national standards.
    However, it is essential that we understand that these 
standards must be a two-way street, that if we expect our 
students and teachers to meet their standards, then there is a 
community standard that you are probably well aware of, as I am 
well aware of, it's the principle of two ways that we have to 
keep within our debate.
    In the classroom, many of my students exceeded their 
parents' expectation and their own expectation once they 
learned that they had the confidence and respect of their 
teachers and their peers. Therefore, we should consider some 
important issues. Besides what we expect from our teachers and 
students, we have to rightfully expect certain kinds of 
standards from our community.
    If we expect our teachers to provide the best instruction, 
then we must empower them with the best teacher training. I 
believe that you believe that.
    Secretary Paige. Right.
    Mr. Honda. If we expect our schools to perform at the 21st 
century levels, then we must afford them the 21st century 
technology. I believe you believe that. And I appreciate the 
comment you made recently about separating e-rate from the 
education budget, because it will allow it to have its mission 
very clear and be very well directed. I appreciated that.
    And if we're going to require students to meet and exceed 
our own expectations, we demonstrate our respect for them and 
confidence in them by providing them with safe, permanent 
classrooms, that are not crumbling around their ears. I believe 
that we had some open discussions around modernization and 
construction monies.
    Secretary Paige. Yes.
    Mr. Honda. But that seems to, in the outline, in the 
blueprint, seems to have been consolidated and redirected in 
other educational funding. So I'm hoping that you'll be able to 
see your way clear of providing some direction for 
modernization and construction funding for local schools, 
because local schools are in dire straits in that area.
    It's been said that to whom much is given, much is 
expected. So we as Federal officials have been given the great 
responsibility of supporting our students and teachers to 
educate our Nation. If our students and teachers are to meet 
these expectations, we must demonstrate our commitment to them 
by giving them the tools that they need to meet those 
challenges. In some of the discussions we had around funding of 
IDEA, of special education, I also support that idea, and I 
think that separating special education out as a distinct 
funding source or funding mechanism is going to be important, 
in the sense that if we're talking about accountability rather 
than compliance, then accountability will be clearer if we have 
the separate funding, so that we know what the bang for the 
dollar that we're getting.
    We also will be clear on the number of dollars that we 
freed up at the local level of general fund monies that have 
been folded into meeting the needs of the children. And you as 
a superintendent had made that comment about the mandates 
without funding. So I think that that report back and the 
accountability will show us here the amount of general fund 
monies that could be freed up if we move toward full funding of 
special education.
    Then you mentioned also that 51 percent of our youngsters 
have been identified as special education, and 80 percent of 
them--did I get that wrong, sir?
    Secretary Paige. Fifty-one percent are estimated learning 
disabled. There are a lot of categories for special education, 
one of which is learning disabled. We believe that better than 
half of the students being served now are there because of that 
designation.
    Mr. Honda. Right. Then you also said that, you mentioned 80 
percent were identified as not having reading instruction?
    Secretary Paige. That they would not have been there if 
their reading instruction had been adequate earlier on.
    Mr. Honda. OK. One of the things that has happened at the 
local level, when I was a principal, is that a lot of times the 
process of identification at the local level becomes very 
extensive because of the limited funds that are available to 
the local districts.
    Secretary Paige. Right.
    Mr. Honda. So the process, they put off the full 
identification, full testing of youngsters at early grade, 
hoping that they will catch up at a later grade. Talking about 
delayed development, things like that. If youngsters were truly 
identified at an early age, perhaps we would catch those kids, 
because we also know that 10 percent of our population has some 
form of dyslexia, which affects performance in reading.
    So it can be a very mild form or very severe form, but yet 
we know these youngsters are very bright, because they're 
bright and articulate, we say to ourselves, there must be 
something else. Now, if we identify them earlier and expend the 
money earlier, we could probably identify these youngsters and 
help them earlier. So the percentages would have to be looked 
at.
    I don't want to condemn the teachers for not teaching these 
youngsters. I think systemically we're not allowing them to 
have that flexibility of identifying youngsters earlier. In 
some districts, they have set aside a whole school where one-
third of the population will, are children that have been 
identified with dyslexia of some sort, then they mainstream 
them out. So I think that we could better spend our money if we 
afford them the money earlier.
    Then the last comment I'd like to make, Mr. Secretary, is 
compliance and accountability. We've had this discussion before 
about the ESEA funds and those programs, all these title 
programs have accountability, they have compliance issues. When 
we show that youngsters are going 6 months with 3 months of 
instruction, with all the things they come with, the challenges 
they come with, all those programs have that accountability 
component. We call it compliance reports. And we have periodic 
program quality performance tests, too.
    I don't know why we're not taking that information as part 
of the accountability, because that's what it is. We don't do a 
good job if at the local level we don't show the district 
office that there is growth through the infusion of Title I 
monies. So I'm hoping that that information will be folded into 
accountability so we'll avoid that paperwork that you talked 
about. We can use the same information and put ourselves on the 
line.
    I don't mind doing that as a principal. I didn't mind doing 
this. We could show with a lot of confidence there is growth. 
But I don't know how much of that information goes on to the 
Federal level in terms of accountability.
    So thank you very much, Mr. Secretary, for being here, and 
hopefully we can continue to work together and solve this great 
national problem.
    Secretary Paige. Thank you.
    Chairman Nussle. Mr. Schrock. Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman.
    Mr. Secretary, I have had the privilege of working with you 
as a member of the Texas House for the past many years that I 
have represented West Houston in the Texas legislature. You and 
I both come here to Washington as newcomers, and I can testify 
for the listening audience, for the members of the committee, 
that you are not only a man of absolute integrity, a man of 
your word, you're not a theoretician when you're here 
presenting this testimony to the committee, the concepts, the 
core concepts. The President's education plan, which you 
described here quite well, is to stop funding failure, to stop 
promoting a culture of compliance, and start building a culture 
of achievment and accountability. You've done that in the 
Houston Independent School District.
    I wanted in my questions, sir, to give you an opportunity 
to describe for the committee, and for the listening audience, 
a little bit about your work in the Houston Independent School 
District, how big is the district, your experience there in 
accomplishing these goals in Houston, and how educators across 
the country who may be listening to your testimony can expect 
to see real results from the President's education plan and 
from the work of this Budget Committee, if we adopt what you 
are suggesting here today.
    Secretary Paige. Yes, well, first of all, Congressman, let 
me thank you for your leadership in the Texas House, and your 
assistance with creating an environment within which a district 
like the Houston Independent School District could prosper.
    The Houston Independent School District is the seventh 
largest school district in the United States, with about 
110,000 to 115,000 students, approximately 300 schools, and 
approximately 13,500 teachers or so.
    It is a district of essentially poor people, 73 percent of 
which are eligible for free and reduced lunch. It is a district 
that has transformed itself from a district with minorities to 
a district of minorities, in that about 85 percent of the 
student populations are from minority communities.
    It was a district also focused on compliance. It was a 
district that did not take responsibility for student growth. 
It was a district that essentially was not performing very 
well, and enjoyed very low public confidence in it.
    I would like to credit the Board of Education as the 
instrument of the change in the district, because they 
permitted us to do many things that most districts would not 
have done, by assigning principals private sector contracts, 
and doing away with tenure.
    In Texas, we call it the Term Contract Non-Renewal Act, 
which essentially says that at the end of your term contract, 
it is the school system that has got to prove why we do not 
want to renew it; abandoning that and putting all the 
principals on private sector-style contracts that liken their 
tenure to performance; outlining very clearly what the 
expectation for each school is, and for each classroom, and for 
each teacher and for each student, and measure that result 
frequently, and using it in the evaluation.
    It focuses on training, or finding out where teachers have 
deficits in providing the quality, course-specific professional 
development, so that they can improve; and reaching out to the 
community, the business community, the non-profit community, 
the faith community, and converting the district from a 
district of ``them and us'' to ``our'' district; and probably 
most of all, shedding ourselves of the non-instructional things 
like food service, a lot of the building maintenance, custodial 
work, to private vendors who do that work much better than we 
were able to do it, at a smaller cost.
    Now there were a lot of things, Congressman. But in 
general, what we did was set high standards for students; 
measure frequently the accountability at all levels; expand the 
choice for parents and those kinds of principles; not specific 
programs, but just broad principles that go across the whole 
system.
    Mr. Culberson. Mr. Secretary, you proved in the Houston 
Independent School District the core concepts of the 
President's program to stop funding failure, stop promoting 
culture compliance, and to focus on achievement and 
accountability, that those things work at the local level. You 
did that with the support of the Board of the Houston 
Independent School District, and with the help of the State 
legislature. I was happy to be a part of that.
    Could you please describe for the listening audience, the 
teachers, educators, parents listening to your testimony today, 
if the Congress adopts the President's program, what specific 
changes will they expect to see in Federal programs, that they 
are experiencing a lot of frustration with today?
    Secretary Paige. We think there will be a cultural shift, 
because the amount of data that will be generated on children 
will be visible to the public. Once the public sees this data, 
the public has a way of insisting on improvement. So what it 
does, it adds visibility to the system.
    You see, in the first place, for most people, nobody wants 
to be substandard. So just defining the standard, in itself, 
drives movement toward improvement. So arranging it so that the 
public can become a player in the improvement situation is a 
powerful, powerful stimulant for change.
    Mr. Culberson. Thank you, Mr. Secretary, and thank you, Mr. 
Chairman.
    Chairman Nussle. Thank you.
    Mr. Clement.
    Mr. Clement. Thank you, Mr. Chairman.
    Mr. Secretary, congratulations on your new position.
    Secretary Paige. Thank you.
    Mr. Clement. I am a former college president and I am co-
Chair of the House Education Caucus. I am a strong believer in 
public schools.
    I believe very strongly that we need adequate facilities, 
books, and teachers, both qualified and dedicated. Research 
shows what parents already know: students learn best when they 
are safe, in modern schools with smaller classes, with 21st 
century technology.
    I am very concerned about the administration's framework 
when it comes to what some might characterize as gutting school 
renovation and construction funding.
    I walk in public schools, and it horrifies me to see the 
deterioration of public schools around the country. It disturbs 
me greatly that we are not going to do anything about it. I 
want to know from you, is that a priority, under your 
leadership, or what do you think we can do, to solve that 
problem?
    Secretary Paige. Yes, thank you; under our system, 
schooling is essentially a State and local responsibility. The 
Federal Government does have a role, however. That role is 
providing resources, technical assistance, and help in 
leadership initiatives.
    Construction is an area that I think we will have to have 
some more discussion about, to determine what part of this 
matches with the Federal role. There is $1.2 billion set aside 
for construction. We cannot be happy about that at all.
    In 1998, according to a professional audit, $1.2 billion 
was required to fix the Houston Independent School District; 
just renovation, not new facilities. So it would not have been 
a drop in the bucket, so to speak, in terms of the need for 
construction in U.S. schools.
    But there are some schools that the Federal Government has 
a direct responsibility for. Those schools are schools that are 
impacted by military installations that are nearby, and they 
have to serve these military children. Indian schools are also 
our direct responsibility.
    These schools, I promise you, are in as bad a condition, or 
maybe even worse condition, than the other schools that we are 
talking about. So we believe we should first go there.
    Mr. Clement. Thank you, Mr. Secretary. I am not totally 
pleased with your response, but I do want to work with you 
closely concerning that.
    Secretary Paige. Thank you.
    Mr. Clement. I am very concerned about our school 
construction and renovation. I really think that should be a 
higher priority of the Federal Government.
    I also want to mention that Congressman Roy Blunt and I are 
co-Chairs of the House Education Caucus. We are getting ready 
to have a briefing and a conference on music education.
    We feel very strongly that music education improves a 
child's early cognitive development, basic math and reading 
abilities, self-esteem, SAT scores, self-discipline, and 
ability to work in teams, et cetera, and school attendance. I 
would urge you to prioritize music and art funding in your 
upcoming budget proposal.
    I also want to mention to you, as well, about character 
education. I was very pleased with President Bush's comments on 
character education, recently. Americans are concerned about 
the steady decline of our Nation's core ethical values, 
especially among our children. I really feel like it will bring 
down the violence that we have in the school system today.
    Congressman Lamar Smith of Texas and myself have introduced 
H.R. 613, the Character Learning and Student Success, or what 
we call the ``CLASS Act.'' Character education has become a 
national priority in the education reform debate.
    I believe that the CLASS Act will bring national attention 
to the importance and effectiveness of character education, and 
will help schools create positive learning environments.
    I would encourage you to include our legislation, the CLASS 
Act, in any character education initiative that this 
administration proposes. I think you will like it very, very 
much.
    I finally want to comment about financial aid. As I 
mentioned to you, being a former college president, that is 
very, very close to my heart.
    We need supplemental education opportunity grants, Pell 
grants, Federal work study, Perkins loans, and graduate 
education programs. They all need to be funded at higher 
levels. These are all worthy programs that make a real 
different in students' lives.
    What does the administration plan to do in the area of 
financial aid for higher education?
    Secretary Paige. There is going to be an increase in the 
Pell grant program. I know that the number that I have right 
now is $1 billion. We will know the details of that on the 
third, but there will be an increase.
    Mr. Clement. Mr. Secretary, I know you commented a little 
while ago to Mr. Spratt, and I was a little concerned about 
your response about how we would not have any numbers until 
April 3, and I do not have the numbers, yet. I am not sure I 
understand what you mean, ``I do not have the numbers, yet.''
    I mean, are you going to get them from the staff, the OMB, 
the Oval Office? I mean, how are we going to come up with those 
numbers? It is real important for you, as Secretary of 
Education, fighting for those education dollars, because those 
kids need it.
    Secretary Paige. You can count on me, on fighting for the 
education program, as a whole, Congressman, and I will do that. 
When I say that we do not have the numbers right now, I mean 
the discussion is ongoing, and it is yet to be determined what 
the specifics are. But we know now, at least $1 billion 
increase in the Pell grant program can be counted on.
    Mr. Clement. Thank you, Mr. Secretary.
    Chairman Nussle. Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman.
    Congratulations, Mr. Secretary, it sounded to me that you 
left a job that was moving along very well to inherit a job 
that needs a lot of work.
    But at any rate, on a couple of comments that you had made, 
I have to tell, I agree with. You had made the statement 
earlier that public education is primarily the responsibility 
of the State and local governments. I totally agree with that.
    You also said that there is a role for the Federal 
Government, from the standpoint of providing resources, 
technical help, and so on. In my district in central 
Washington, we are largely a rural district. Nearly 40 percent 
of my schools, for example, are under 600 students.
    Yet, the education funding is largely driven by a formula, 
and the grants are largely competitive in nature. Both of those 
work to the disadvantage of smaller districts, obviously, 
because the formula would not justify more funding. The grants, 
of course, based on a competitive model, make it pretty 
difficult for smaller districts to compete.
    What I would like to ask you is, the President's plan, if 
it is implemented like you envision it, how would that help the 
rural school districts, like those in my district?
    Secretary Paige. It would help by taking many of the 
categorical programs and consolidating them, especially those 
that are overlapping and duplicative, and forming broader grant 
programs for Federal funds, going directly to schools, school 
districts, and to States.
    In many small school districts, there is not adequate 
funding to fund, say, a grant writer, a person who is there 
just to develop grants, such as would be in the case of the 
larger school system. That is going to be taken into account, 
so that the access to these dollars from small and rural school 
districts will be equal to the access for the other school 
districts.
    When the President says, ``No child left behind,'' he 
includes small and rural school children, as well. So these 
young people will be provided with the same types of access 
that other urban school systems have.
    Mr. Hastings. I have one other question, not related to 
this. About 20 years ago, another legislator and I, when I was 
in the State legislature, at the fear of creating more 
paperwork, sent out a survey to a number of districts, large 
and small, in Washington State, asking them to give us a cost 
of compliance with paperwork. A lot of that was largely driven 
by the Federal Government.
    I forget the results of that, because it was nonscientific. 
But the message that came back loud and clear was that there is 
a huge, huge cost involved in that paperwork.
    We have been attempting, in the last 6 years, at least as 
far as the Federal involvement in education, to give power back 
to the States and the local communities. With that idea in 
mind, and if we are successful in doing so, and I hope we are, 
would there be an effect on the number of employees within the 
Federal Department of Education, here in Washington, D.C., if 
we are devolving power, through them, back to the States?
    Secretary Paige. Yes, there would be a definite impact on 
that. Much of the categorical program costs result from 
personnel. It has been estimated at that some State level 
organizations, where States have the responsibility for the 
compliance function in monitoring the progress of the schools 
under those categorical grants, as much as 50 percent of the 
personnel may be there exclusively to do that function.
    Mr. Hastings. Good, well, that in itself, to me, is very, 
very good news. Mr. Secretary, thank you very much for your 
testimony.
    Secretary Paige. Thank you.
    Chairman Nussle. Thank you, Mr. Hastings.
    Before we go to Mr. Davis, let me just take the Chair's 
prerogative, and welcome a number of distinguished veterans, 
who are visiting me from my district in Iowa and all across 
Iowa. I would take that prerogative, and just welcome you.
    We are talking about education, today. We are not quite 
talking about the subject you came to talk about, but we will 
get around to that. I appreciate you coming to Washington to 
visit me today.
    Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary.
    Secretary Paige. Thank you, sir.
    Mr. Davis. You come to Washington heavily encumbered with 
knowledge of the issues. That makes you a valuable addition to 
the debate.
    Secretary Paige. Thank you.
    Mr. Davis. I would like to first talk to you about the 
testing issue. Testing, as you know, is a very powerful tool. 
Like every tool, it can be successfully used and abused.
    I will express to you my personal opinion that in Florida, 
my home, we are having some serious problems with the 
administration of the test.
    It goes to two of the points that you have made. First, you 
mentioned as a purpose of the test was to diagnose the student. 
In Florida, that is really not the case, to the extent that it 
needs to be.
    I would further suggest to you that there is a tremendous 
temptation for the politicians to use the test as a public 
relations measure, in an irresponsible fashion.
    So I really just want to urge you, as this debate goes 
forward, to err on the side of caution, in terms of sending the 
appropriate message to the States.
    One, this test should be used for diagnostic purposes, as 
testing was originally intended. Number two, we need to be very 
careful about using the testing information in a responsible 
fashion, as we communicate these results with the public.
    Secretary Paige. Yes, I agree.
    Mr. Davis. The second thing I want to bring up is school 
construction. You have acknowledged the need to have a Federal 
debate with respect to what our role should be.
    I want to strongly urge you to consider the merits of the 
Johnson-Rangel bill, an increasingly bipartisan bill in the 
House, which you may already be familiar with, having served as 
a school superintendent.
    This bill jealously guards the prerogative of local control 
to the school districts, while providing some very important 
Federal assistance in the form of tax credits to districts like 
the one you represented, and the district that I am from, 
Tampa, that are just bursting at the seams.
    Secretary Paige. Yes.
    Mr. Davis. In my State, we are forced to rely upon raising 
property taxes to fund school construction. Mr. Secretary, that 
just is not going to happen. Property taxes are high enough 
already, and you can only raise them through a referendum.
    Secretary Paige. Right.
    Mr. Davis. As we debate tax cuts, this is one important way 
for us to help deal with one of the obstacles with class size 
reduction, that I think you were probably alluding to earlier, 
and that is the shortage of appropriate classroom space.
    Secretary Paige. Yes.
    Mr. Davis. In your testimony on page 10, you refer to a 
proposal by the President to rely upon private activity bonds 
for school construction.
    Secretary Paige. Yes.
    Mr. Davis. You have not talked about that, yet. I would 
just like to mention to you that I think that may be a problem. 
I do not think that either you or I would say that building 
schools and keeping them is a private activity. It is certainly 
a fundamental public responsibility.
    I know in the school district that I represent in Tampa, 
there is a concern that if we were to rely upon private 
activity bonds, we would, in effect, be building special 
schools, that private developers felt met their needs, but did 
not necessarily meet the needs of our school children.
    So I am very concerned that we may ultimately use private 
activity bonds to deal with the construction problem, and I 
would welcome any comments that you have on that, or the 
Johnson-Rangel bill.
    Secretary Paige. It is such a difficult and complex 
problem, construction. Under a Department of Education study, a 
couple of years ago, it was determined that there could be as 
much as about $130 billion worth of needs out there.
    This does not include, I think, new construction. Well, OK, 
it is for growth; $1.2 billion was dedicated last year. We can 
see how much of that problem is going to be solved by that.
    So the administration suggested private activity bonds 
primarily because we see other public facilities being 
constructed that way: hospitals, airports, other construction 
to serve public purposes are constructed using this strategy.
    We wanted to investigate the potential for savings, in 
terms of tax credits for school construction. So that is an 
idea to be discussed. If there are some better ideas, we would 
like to hear about those ideas.
    But if there are $130 billion worth of need and $1.2 
billion worth of resources, then we have got to make decisions 
on where do we go and go get that part. There is going to be a 
lot of need remaining, after we spend the $1.2 billion.
    So that brings us to the question, is that the most 
effective use of that $1.2 billion? That is the question that 
we have to ask ourselves.
    Mr. Davis. Mr. Secretary, I have been handed a document 
that suggests that the $1.2 billion for aid for construction 
that you have alluded to, under the President's proposed 
budget, is being taken out of that funding source and being 
used for special education or technology, instead.
    Secretary Paige. No.
    Mr. Davis. Is that correct?
    Secretary Paige. No, that is not correct.
    Mr. Davis. Good.
    Secretary Paige. For the $1.2 billion that remains, the 
flexibility is added to allow local decisions about whether or 
not that portion of $1.2 billion will be used for construction, 
or used for special education. They can make a decision on what 
is the most effective use of the dollars.
    Mr. Davis. Mr. Secretary, in the little time we have 
remaining, to what extent do you intend to preserve the 
prerogative of the States, as they develop the tests that I 
alluded to earlier, to make sure that they put appropriate 
emphasis on diagnosing where children are and how to help them 
get to where they need to be, and otherwise administer a 
quality program on their own terms?
    Secretary Paige. Yes, we will insist on state-adopted 
tests. We will monitor the development of these tests, in terms 
of test quality. In terms of the implementation of the tests, 
we will provide guidance, but not authority.
    Mr. Davis. Mr. Secretary, I had a meeting in my community 
last week, and had over 300 teachers and parents, who were 
deeply concerned about how testing is occurring in Florida.
    I hope that as you travel throughout the country, you will 
take the opportunity to listen to those programs that are 
working, and those that need some changes, so that we do not 
contribute to the problem here in Washington, and we allow the 
States to fix their own problems and move forward in a positive 
way.
    Secretary Paige. Thank you.
    Mr. Davis. Thank you, Mr. Chairman.
    Chairman Nussle. Thank you.
    Mr. Hoekstra.
    Mr. Hoekstra. Thank you.
    Mr. Secretary, welcome.
    Secretary Paige. Thank you.
    Mr. Hoekstra. It is good to see you, again. You are making 
your rounds on Capitol Hill, and we appreciate your openness 
and your willingness to be here and talk about the President's 
agenda for education.
    When you were at the Education Work Force Committee, we 
talked a little bit about the disappointing results that came 
in from the independent auditors, again, that indicated that, 
and I think it is for the third year in a row, the Department 
of Education would have a failed audit.
    The President's budget blueprint recognizes that fact, and 
says, ``These failed audits indicate a potential for improper 
use of Government resources.''
    Over the last couple of years, there have been a number of 
us that have been very concerned about the financial controls 
within the Department of Education. We have criticized the 
Department of Education as being particularly susceptible to 
waste, fraud, and abuse.
    I think you are probably aware, or are becoming aware, of 
the thefts of agency funds that have occurred. There have been 
other instances of waste, including the misprinting of several 
million forms, erroneous awarding of Federal fellowships, and a 
whole range of items that clearly indicate a lack of financial 
system and, really, the integrity of the financial system, 
within the Department of Education.
    The President's budget calls for a significant increase in 
the Department of Education. It has highlighted the waste, the 
fraud, and the abuse, within the Department.
    Have you had the opportunity to see reports, which may 
indicate to you the amount of waste and fraud and abuse within 
the department, that has occurred during the last 3 years of 
failed audits; that if we get the proper financial controls in 
place, those resources could actually be targeted to children 
and to education? Do you have any kind of an estimate as to 
what the loss may have been, over the last few years?
    Mr. Davis. Mr. Congressman, I would hesitate to put a 
number on that. But let me assure you that even before coming 
to Washington, I had some concerns about that. Subsequent to 
arriving here, those concerns have been heightened.
    I have had a chance to read the audit, from Ernst & Young. 
I do have some concerns that are deep concerns, and I do have 
some ideas about how to approach that. I would welcome the 
opportunity to have a chance to sit down and talk to you about 
the specifics of it, because very shortly, I will take some 
actions that will be aimed at addressing this very important 
issue.
    Mr. Hoekstra. Good, I mean, that is encouraging. Because I 
do believe, and I think some of the other reports have 
indicated, the numbers are in the hundreds of millions of 
dollars that have been lost at the Department of Education, 
over the last few years. I think the first thing we want to do 
is make sure that we get those resources focused on our kids, 
focused on getting them effectively into the classroom.
    As we indicated when you were at the Education Work Force 
Committee, I think the Education Work Force Committee and this 
Budget Committee are ready, willing and able to provide you 
with the resources that you feel that you need, to move this 
department off the dime to a point where maybe when we come 
back on September 30 of this year, and get an audit report in 
2002, that we will have a clean audit.
    I think you recognize, as well as we do, that if it takes 
us too long to get to the point where we have the appropriate 
financial systems in place, it then becomes your problem.
    Secretary Paige. I am accurately aware of that.
    Mr. Hoekstra. All right, thank you very much. I am looking 
forward to working with you on passing the parts of the 
education plan through the Education Work Force Committee. 
Thank you.
    Secretary Paige. Thank you.
    Chairman Nussle. Mr. Holt.
    Mr. Holt. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary.
    In our previous discussions, we talked about some of the 
Federal role in education. You had spoken earlier about some of 
those resources and technical help.
    One area that it seems pretty clear that local school 
districts need help with is in teacher recruitment, finding and 
training excellent teachers.
    No local school district can deal with, or no combination 
of local school districts, can deal with the need for 2.2 
million new teachers in the next 10 years; many of whom will 
have to be trained in science and math and areas that I think 
are very important to our children's development.
    You mentioned a few minutes ago that you had $2.6 billion 
for teacher quality. I wanted to understand that a little bit 
better. Since we have to make some decisions and go to work 
before April 3, I would like to know how much of that money is 
new.
    Considering that there is only about $2.1 billion new 
dollars above the current appropriated amount that is in the 
proposal, how much of the $2.6 billion for teacher quality is 
new?
    Secretary Paige. Most of it is a better use of the current 
dollars that are there.
    Mr. Holt. Do you have in mind, for this year or next year, 
programs to assist in the recruitment of new teachers?
    Secretary Paige. I do have some very firm ideas about that, 
resulting from my 7-year experience as superintendent of 
several of the largest school districts in the United States. 
But a portion of this is going to be providing funding and 
advice, depending on these decisions to be made at the school 
or State level.
    Personally, we believe that the teacher shortage is 
related, in large measure, to the choke point that we use to 
funnel teachers through to become part of the certification 
process. We believe that broadening the pool of applicants, and 
widening the choke points, so more people can come through, 
will go a long way in dealing with this shortage.
    Alternative certifications systems, this is not just 
guesswork. Boston and the State of Massachusetts had a program 
that provided a $20,000 incentive for people who come into the 
teaching workforce to become teachers.
    Upon some study by, I think, Susan Johnson at Harvard, it 
was discovered that many of the people who came through that 
system, did not come through because of the $20,000. They came 
through because of the way around the certification process; 
the shorter trip to the certification situation.
    So some of this is just not a matter of dollars. It is a 
matter of us looking at the system that we have imposed on it. 
We are imposing these kinds of restraints that create our own 
problem.
    Mr. Holt. Well, I look forward to working with you on that.
    Now once the teachers are recruited, there is the training 
challenge. I was pleased to hear you say recently in our 
Education Committee that you would be willing to consider the 
provision that was in last year's Teacher Empowerment Act, that 
would allow some funds to be specifically directed toward 
science and math, since your plans would be to do away with the 
Eisenhower Program, per se. I was pleased to hear about that.
    Let us turn to another area, I think, where there is a 
Federal role. This is following the lead of our Chair here and 
others, dealing with special education.
    I really want to understand where you think we are going 
and should be going on this. As you know, for a couple of 
decades now, there has been existing law that the Federal 
Government would pay up to 40 percent of the cost of providing 
this special education.
    Now you are saying that there may be as much as $1.2 
billion, I guess, additional for special education. As I see 
that, that is money that could be devoted to school 
modernization or special education.
    Secretary Paige. Yes, that is right.
    Mr. Holt. If all of that were devoted to special education, 
in other words, we added the $1.2 billion to the $7.4 billion 
that the Federal Government currently contributes to special 
education, would the Federal Government have met its 
obligation? Would we be doing all that we should be doing to 
help the local school districts?
    Secretary Paige. If we consider our obligation to be 40 
percent of the funding that we promised, we would not be 
anywhere near it.
    Mr. Holt. OK, well, I guess I would argue then that we had 
better step back and take a look at our budget here, then. If 
we have a $10 billion obligation or, let us say, something like 
$100 billion over the next 10 years, of Federal obligation in 
special education, and it has been the law for 20 years, then 
we are falling way short.
    You know, I do not want to get into class warfare type talk 
here. But if, in the President's tax cut, there is $555 billion 
over 10 years for the top 1 percent, and only $40 billion over 
10 years for all of education strengthening and reform, and 
maybe $10 billion or $15 billion for special education, the 
ratio is 13 times as much given to the top 1 percent of the 
wage earners, as we are giving to new activities in education, 
including meeting our obligation in special education.
    When the President says he is here to ask us for a refund 
for money that is left over, I think we have to look at what 
our obligations are, before we determine what is left over.
    It looks to me like we have an obligation that you just 
said, that is on the order of $100 billion, just for special 
education, and not even counting after-school programs; not 
even counting teacher recruitment or teacher training or a 
number of other needs that I can assure you the school board 
members, the parents, and the teachers in my district will tell 
you, they need help with.
    Thank you, Mr. Secretary. Thank you, Mr. Chairman.
    Chairman Nussle. Thank you, Mr. Holt.
    Mr. Kirk.
    Mr. Kirk. Thank you, Mr. Chairman.
    I share in Congressman Holt's commitment to special 
education. Under my predecessor in this office, Congressman 
Porter, we had that 40 percent commitment to special education. 
It was in the authorizing law, but we ignored it. We ignored it 
for 25 years.
    Under Mr. Porter's appropriations leadership, we increased 
the percentage from 6 percent to 13 percent. We need to 
continue on that road.
    But I would say, with regard to providing tax relief to 
Americans, the best education program is parents with a job. In 
my district, we have got the announcement today of Motorola 
firing 17,000 more employees. So the condition of this economy 
is something of great concern.
    I represent the best educated zip code in the nation, in 
the 10th Congressional District of Illinois. We are so very 
happy that you are our Secretary of Education, and are taking 
over the helm.
    Secretary Paige. Thank you.
    Mr. Kirk. I was a teacher, in both nursery school and 
middle school. For me, I did leave the teaching profession. But 
if we had addressed some of the teacher development issues, 
which I want to raise with you, I might have stayed, and it is 
a concern.
    But I want to raise another issue with you. We are so 
worried about the condition of our country's military and 
military pay, that it is taking top priority with us, and in 
the President's budget.
    But there is another aspect of this budget, which is 
critical to the military family. I am very excited to see that 
the President put education at the top of his budget funding. 
There is a key program within the Department of Education 
called ``Impact Aid.''
    Ninety-three cents of every dollar supporting our schools 
comes from raising local monies, from property taxes or State 
taxes.
    What happens if you cannot tax the housing where those kids 
come from? In my district, the Great Lakes Naval Training 
Center is home to 50,000 recruits, and we cannot tax that 
housing, because it is Federal.
    Secretary Paige. Right.
    Mr. Kirk. So the Federal Government steps in and makes some 
payments.
    In the Glenview, Highland Park, and Waukegan school systems 
in my district, we get some aid; but in places like the North 
Chicago school system, 33 percent of the kids, in some cases, 
are coming off of that Federal housing. So we really need to 
look at Impact Aid.
    Where did the Impact Aid numbers go in your budget; and can 
you tell me your view on Impact Aid, and how it relates to the 
military life and quality of the military family?
    Secretary Paige. Well, first of all, we see that as a 
direct Federal responsibility.
    Mr. Kirk. Thank you.
    Secretary Paige. We are responsible for that.
    And if you survived middle school, I am very impressed.
    [Laughter.]
    Mr. Kirk. That is right. They were 10-year-olds, so they 
were rambunctious.
    Secretary Paige. The Military Impact on Schools Association 
surveyed 20 of its members on their capital facilities finance 
needs, and estimated a cost of about $310 million, to take care 
of that. We estimate that it will cost approximately $50 
million for the Indian lands and the condition of those.
    So those are some very important direct responsibilities 
for the Federal Government. We are trying to address those in 
``No Child Left Behind.''
    Mr. Kirk. For us, previously in the administration, the 
Impact Aid Program could sometimes be described as the red-
headed stepchild of the budget. I want to make sure that as we 
are concerned about the military family and military pay 
increase, that we are also concerned about their kids, and 
increasing the Impact Aid payments, and removing some of the 
bureaucracy.
    Dr. Pickles, at the North Chicago school system, reports to 
me that she has got five or six full-time people, just working 
on the Federal paperwork, to keep the money flowing. I want to 
work with you to improve that situation, because these kids, 
who are the hopes of their military families, are so important 
to us, and their condition.
    Turning to teacher development--or the lack thereof--that 
is one of the main reasons why I left the teaching profession. 
We have to look at the form, duration, participation and 
content of that teacher development. There is some exciting 
work happening in England on this, under Prime Minister Blair.
    Can you give me your overall view on teacher development, 
and where we ought to go?
    Secretary Paige. Yes, we, as a matter of fact, had a 
conversation by telephone with Mr. Blair's education person, 
just yesterday. We talked about some corroboration in learning 
more about each other's systems.
    We think our greatest deficit in teacher preparation has to 
do with the content-specific capability on the part of 
teachers; a teacher training that empowers teachers and 
develops skills in their specific content, especially math, 
science, history, and courses like that.
    We are appealing to the universities and other alternative 
delivery system, to provide some corroboration and guidance in 
the development of teachers. We are showing some successful 
models and encouraging them to adopt them.
    Mr. Kirk. That is good. One of the school systems that I 
taught in was the Inner London Education Authority. Some of the 
new work happening over there, I think, is quite exciting and I 
am glad you are in touch with the Prime Minister's staff on 
that.
    For us in the 10th District, education is our ``secret 
weapon.'' We have the First in the World School Consortium. For 
many of our kids, we outrank any other country in performance 
on standardized tests, but we want to keep it that way.
    Secretary Paige. Yes.
    Mr. Kirk. Then in some of the other schools, which depend 
on Impact Aid, we have got to bring them up to that standard.
    I do want to share Congressman Clement's commitment to the 
character education, which is so important in the Glenview and 
Arlington Heights school systems. I hope you keep that in mind.
    Thank you very much, Mr. Chairman.
    Chairman Nussle. Thank you.
    Mr. Moore.
    Mr. Moore. Thank you, Mr. Chairman, and Mr. Secretary, 
welcome to our committee today. I appreciate your being here 
and your testimony.
    I am from Kansas, and I want to add my voice to the chorus 
of voices you have heard today in support of full funding for 
IDEA special education.
    To that end, I wrote a letter to then President-elect Bush 
on January 5, asking that he put into his administration's 
budget full funding at the 40 percent level of special 
education.
    I think there is a growing consensus in Congress, and I 
think it is about time that we have this growing consensus in 
Congress, to finally live up to the promise that Congress made 
25 years ago, and in which Congress has failed every year since 
then, for 25 years. This should not be a partisan issue at all.
    When we talk about ``No Child Left Behind,'' we should be 
ashamed of ourselves if we leave behind some of the most 
vulnerable in our society, and those are children with special 
needs. That absolutely should not happen, when we are talking 
about an era of surplus or projected surplus, and when we are 
talking about huge cuts.
    I supported tax cuts last year. I will vote for tax cuts 
again this year; but that should not be the choice between huge 
tax cuts and full funding for special education. I hope you 
will take back to the President what has been said by the 
members of this committee, Republicans and Democrats today, who 
support full funding for education, Mr. Secretary.
    My staff, I believe, forwarded to you a letter received 
from the Olathe United School District 233 of Kansas. Dr. 
George, who is the assistant superintendent of schools, raises 
several concerns in there.
    I just wanted to really talk to you, I guess, about a 
couple of them. We certainly do not have time to review each of 
these concerns, but special education is one. I wanted to ask 
you just about a couple of others, I guess, very quickly here.
    He says in his letter, ``We have questions concerning 
annually testing every child in grades three through eight. Our 
State has a comprehensive system of testing. We do not believe 
that this extra testing will translate into learning. We are 
already testing, and the scores are published in the newspapers 
and in each school's report card. We would suggest that States 
be given some flexibility about which grades to test and how 
many grades to test. We believe the excessive reliance on State 
tests and Federal tests is a bit of overkill.''
    Mr. Secretary, I guess my question about this is, how would 
the President's education plan take into account and treat 
States like Kansas, that already have a quality testing program 
in place? Can you give us some insight there, sir?
    Secretary Paige. Yes, first of all, we are not asking the 
States to abandon what they have done, and start all over 
again. We are, however, asking States to develop very crisp, 
clear curriculum standards and very clear performance standards 
for students. The measurement should be against those 
standards, to determine the extent of achievement or 
nonachievement against those standards.
    We would be in firm disagreement with the superintendent's 
idea here. It appears that he is viewing testing, the way we 
are presenting it, as an appendage to the education system.
    That is not the way we view it. We think testing is the 
other side of the coin of teaching. Teaching, absent testing, 
is teaching in the dark. We do not believe that students can go 
several years before we know that.
    For example, standards research from Tennessee indicates 
that teacher effectiveness is the primary detriment of whether 
or not students learn. Teachers' effect on student achievement 
has been found to be both additive and cumulative, with little 
evidence that subsequent effective teachers can make up for 
ineffectiveness, earlier.
    So we find that we cannot afford to go 2 years to find out 
whether or not the instruction has been ineffective. It may be, 
as evidence suggests, that this deficit that has been created 
there is beyond remediation.
    Our idea about testing is measuring the extent to which the 
standards that the States themselves have set are being 
achieved. If they are not being achieved, we need to know 
immediately, so we can help the school develop some type of 
effectiveness, or help the teacher, or whoever.
    Mr. Moore. Thank you for answering that question. I will 
relay that information to Dr. George.
    I wanted to make a comment to you. I noticed in the 
President's State of the Union Address, or at least his address 
to the Joint Session of Congress, that he mentioned a loan 
forgiveness program for new teachers.
    Secretary Paige. Right.
    Mr. Moore. Last year, I introduced H.R. 687, called the 
Teacher Recruitment and Retention Act, which I have 
reintroduced at this time.
    I guess I would ask you, and I do not frankly care whether 
it is my bill and I get credit for it, but I think, result-
wise, we need to do something like that. Essentially, what my 
bill does is encourage this, and I got this idea, and I did not 
come with the idea myself.
    I asked a group of students over in Lawrence, Kansas, last 
year, how many of these 25 students had considered going into 
teaching, and six raised their hands. I said, ``How many of the 
six of you who raised your hands actually intend to do it?'' 
Two raised their hands.
    I said, ``For the other of you, why would you not?'' One 
said, ``Because of the way teachers are treated in the 
classroom.'' One other student said, ``Because I can make a lot 
more money doing something else besides teaching.''
    What this bill would do is provide loan forgiveness up to 
$10,000, which I think woefully inadequate, but at least it is 
a start, for somebody who gets in and actually teaches for 5 
years. It would be over a graduated basis, over the 5 years.
    I hope that you will look at that bill, or some similar 
bill, and ask the President to provide his support for that. I 
think this would at least provide some incentive to these 
people who get in.
    I have seen the best of teachers in our district. Frankly, 
they are not teaching for the money; but they certainly need 
some assistance and some financial help. I think that goes a 
long way to helping them pay off their education loans. I would 
hope that you and/or the President would support a concept like 
this.
    Secretary Paige. We will be happy to take a look at it.
    Mr. Moore. Thank you, sir, very much.
    Chairman Nussle. Thank you.
    Ms. Clayton.
    Ms. Clayton. Thank you, Mr. Chairman, and welcome, Mr. 
Secretary. I am glad you are there. I want to pledge to be as 
cooperative and as encouraging for you to achieve your 
commitment to education. Also, your pledge to the President's 
commitment that ``no child should be left behind.''
    To that goal, there seems to be some contradiction in terms 
of allocating resources to meet the goal that no child should 
be left behind.
    I have three questions. First, I want to follow up on the 
question of the Impact Aid. I used to have two facilities that 
were military in my district. I now have one. Always, there is 
not enough money. Can you answer specifically how much money is 
proposed in the budget for Impact Aid?
    Secretary Paige. I must apologize, but I am unable to 
answer specifically, because that information will not be 
available until April 3.
    Ms. Clayton. But in your framework, there is an allocation. 
Is it something like $700 million?
    Secretary Paige. There is $62 million there for 
construction, but that is limited to that aspect of it.
    Ms. Clayton. Oh, OK, that is only construction?
    Secretary Paige. That is right.
    Ms. Clayton. Well, the figure I was given was inadequate, 
and that figure is even more inadequate. So the Impact Aid 
includes more than construction?
    Secretary Paige. Yes.
    Ms. Clayton. It has curriculum and other things?
    Secretary Paige. That is right.
    Ms. Clayton. If you could get that exact number to us 
before April 3, that would be helpful. I think it is floating 
around there somewhere.
    Secretary Paige. We will get the information that we have 
to you. We will do it as early as tomorrow. We will not get the 
April 3 information until April 3, but the information that we 
have now, we will get to as early as we can.
    Ms. Clayton. OK, well, just get what you have now. That 
would be good.
    I want to talk about teacher development. I know that a lot 
has been said. I was really impressed with our young colleague, 
who had been a young male teacher, both in elementary and 
middle school. I, like you, am always elated to see young 
people go into education.
    Recently, I attended a conference about teachers and the 
quality of teachers. The teacher development is in two parts. 
Many of the educational institutions themselves began to 
question the accountability as shown only in testing, 
particularly the kind of testing that we have.
    They are not suggesting that you should not have testing. 
What they are suggesting is that the emphasis should be made in 
teaching a core curriculum that has basic standards in science 
and math and analysis that allow young people to compete for 
the 21st century.
    Testing is a more relevant exercise of whether the schools 
are being accountable in preparing our students; rather than a 
test for the test's sake. Many of the tests are now tests for 
the test's sake. There is a whole industry around ``getting 
prepared for that test'' as you well know.
    But in rural areas, where I come from, the recruitment has 
to be placed. Otherwise, I am unable, in the rural communities 
that we have, to find incentives. Therefore, we will always be 
behind. Now in construction, we do not have the tax base. We 
certainly do not have the tax base to give supplements.
    So we need, as my colleague was saying, not only the 
forgiveness of loans, but incentives for relocation, incentives 
for housing, and incentives for a number of things that 
compensate for not getting the big salaries that you can pay in 
your district rather than in my district, and I know you want 
more.
    So is there any sensitivity to the rural communities and 
the gap being even wider there? Since I mentioned the gap, it 
is also wider in terms of access to the Internet in reference 
to teaching through the utilization of the information 
technology. All of that enhances our students' ability to be 
competitive in the 21st century. I wish you would speak on 
that.
    Secretary Paige. Yes, I would be very pleased to. We are 
very sensitive about rural and small systems, because they have 
children, too. When we say, ``No Child Left Behind,'' we mean 
those, as well. So the language will be such that it provides 
access to these dollars for these smaller systems.
    You brought up what I think to be the wave of tomorrow in 
assisting with situations like this, and that is the 
technology.
    Even in urban systems like our own in Houston, we found 
that to be a wonderful way to get resources to students who 
otherwise would not have it.
    For example, students who were interested in taking courses 
for which we could not find teachers, instead of transporting 
them all across the city by bus to a place or a school where 
they did have that course, we could bring the course to them, 
through the Internet. That is going to provide, I think, wide 
access to small and rural systems in the future.
    Ms. Clayton. But the schools have to be wired in order to 
get that.
    Secretary Paige. That is right. We are also making 
provisions in our technology initiatives to be able to assist 
with that.
    Ms. Clayton. Have you increased your technology and your 
centers of excellence, or are you decreasing them?
    Secretary Paige. We have combined it, so that it will give 
more flexibility to the people on the scene, to be able to make 
their customized decisions about how to use those dollars.
    Ms. Clayton. I know about the flexibility, but how about 
increasing the dollars? Did you actually increase dollars for 
the community centers of excellence?
    Secretary Paige. I will try to get a specific answer. We 
are not talking about the e-rate. We are just talking about the 
ones in our department. Let me get that information for you. I 
do not have it, at this moment.
    Ms. Clayton. OK, and you were about to offer something 
else, which is equally important. As a superintendent, you know 
the e-rate indeed was a part of that. So what is happening to 
our e-rate to compliment that?
    Secretary Paige. We are in the process, at the moment, of 
combining the e-rate with this consolidation issue.
    Ms. Clayton. Bringing that in?
    Secretary Paige. It is just changing it, as it is presently 
operating. There was some thought about consolidating it with 
many of the programs that are in the Department of Education. 
That discussion is discontinued.
    Ms. Clayton. Would it mean that my schools will have access 
to the money or not?
    Secretary Paige. The eligibility has not been changed. So 
the eligibility would be the same. If your schools were 
eligible in the first place, they will still be.
    Ms. Clayton. Yes, they were.
    Thank you, Mr. Secretary, and thank you, Mr. Chairman.
    Chairman Nussle. Thank you
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Secretary, let me add my word of welcome. I would like 
to raise some questions with you, if I might, about teacher 
recruitment and training, and revisit briefly also the Pell 
grant and Title I issues in this limited time that we have 
here.
    I do want to lead with teacher recruitment and training, 
though. Like other members, I see a huge need out there in our 
country in the next decade. We are going to have to recruit 2.5 
million teachers; 80,000 in North Carolina, alone. I must say, 
I do not know where those are coming from, and I do not believe 
anybody else does, either.
    You mentioned in your response to Mr. Holt the need to make 
this certification process less cumbersome. We would be 
interested in your ideas on that.
    It does strike me that there is a much more fundamental 
issue here. That is that the teaching career is not appealing 
to young people as they undertake their education.
    I had an experience very similar to Mr. Moore's in my 
district with a couple hundred honor students in a 
predominantly African American liberal arts college. I asked 
them how many had even considered teaching a career, and four 
hands went up out of 200.
    There are some programs in the States that have attempted 
to deal with this. In North Carolina, we have the Teaching 
Fellows Program. I am pleased to see that our new Governor, 
even in a time of great budget difficulty, is proposing 
expanding the Teaching Fellows Program.
    This program identifies high school seniors, and offers 
them not just scholarship assistance, but also an 
extracurricular program that, throughout their undergraduate 
career, firms up that professional identity as a teacher. That 
program has produced thousands of good teachers, and has had 
great success.
    I have introduced legislation called the Teaching Fellows 
Act, which would aim to encourage and expand such programs, or 
replicate them in other States and to reach into the community 
colleges, where I think often people who are training as 
teaching assistants or day care workers or others might be 
encouraged to go for the full 4 years.
    Secretary Paige. Right.
    Mr. Price. We have got to find teachers in some new places. 
We have got to, not just give them financial support, but other 
kinds of support to meet this crying national need.
    I wonder what your thoughts are about the way the Federal 
Government might participate here. I notice in your budget, you 
have $2.6 billion for teacher training and recruitment.
    You have said here today, that is mainly to continue 
existing kinds of activities, with the class size reduction and 
the Eisenhower professional development programs. On another 
day, we can have a debate about the desirability of telescoping 
those two programs, or giving the States more flexibility on 
that.
    What concerns me more about that budget figure is the sin 
of omission. I do not see much in the way of a new thrust here 
in teacher recruitment and training. I wonder what your 
thoughts are about that. In particular, might the Federal 
Government encourage programs like these teaching fellow 
programs in the States?
    Secretary Paige. Well, I think the quality of these 
different programs should be judged by the people on the scene. 
If the programs are judged to be effective, they should have 
the flexibility from the Federal Government to fund those 
programs and to put them in place.
    I think that the teacher shortage situation is related to 
the regulations that govern it. In our own district in Houston, 
the alternative certification system produced a large number of 
teachers; people who had gone into the work place, but decided 
later to change professions and go into teaching.
    As a Dean of a college of education for 10 years, that 
supplied 25 percent of the teachers that worked in this system, 
I arrived at a point where more than 50 percent of our teacher 
candidates were people coming from other professions, and 
returning to become certified to go into teaching.
    We may have to reshape our thinking about this somewhat; 
and maybe our great pool of teacher candidates will not be 
found in the 18 to 24-year-old population that we now see as 
going to college and deciding early on to go into teaching.
    It may be that those going into the workplace, deciding 
that they are not fulfilled by the kind of jobs that they have, 
and they decide to make a change and to come into teaching.
    Wendy Colp, with Teach for America, also is another place 
to look. She seems to be successful in going out to recruit 
young people, just coming out of college, and even those who 
had given no thought at all to coming into teaching.
    Of the 200 or so Teach for America students that we use 
each year in the Houston Independent School District, if you 
had asked those 200 people, when they were going into that 
freshman year, which of those wanted to be teachers, none of 
them would have raised their hands. But after they came into 
the teaching workforce, about 50 percent of them stayed.
    Mr. Price. I appreciate that observation, Mr. Secretary. I 
do think that you are right. We are going to have to look for 
teachers in new places.
    I also think, though, that there are some promising State-
level programs that do aim at those undergraduates, and 
encourage them to consider a teaching career. I would hope that 
we could give some encouragement to that effort, as well.
    Secretary Paige. Absolutely, we will.
    Mr. Price. Let me move on and ask you to revisit the Pell 
grant issue. I understand you are looking at a $1 billion 
increase in Pell grants, overall.
    How much would that allow us to increase the maximum grant? 
I understand the CBO has estimated that it would permit maybe a 
$150 increase in the maximum grant. Is that correct?
    That would compare, of course, to the current increase of 
$450, in the current year. I just wonder if that is adequate. 
What are your goals for Pell grants, after all? Is $1 billion, 
permitting a $150 increase, this administration's last word on 
this subject for the coming fiscal year?
    Secretary Paige. I cannot say that it is the last word. I 
know that it is the information that we have now. The last word 
would be made available to us on April 3.
    Mr. Price. Is it correct to say the $1 billion that is 
currently proposed in your budget would permit approximately a 
$150 increase in the maximum grant?
    Secretary Paige. I am not certain of that. I will get that 
information and get it to you tomorrow, but I do not know that 
to be true, right now. I have asked both of these scholars, and 
neither of them could tell me.
    Mr. Price. All right, my understanding is that CBO has made 
that estimate. I would appreciate your clarifying that.
    Secretary Paige. We will clarify that. Mr. Price. I will 
have a couple of other questions for the record, which I would 
appreciate your attending to.
    Thank you, Mr. Secretary.
    Secretary Paige. Thank you.
    Chairman Nussle. Mr. Secretary, this has been, I think, a 
great presentation. We really appreciate your testimony here 
today.
    Let me just tell you that both you and President Bush have 
set a pretty tough goal. I mean, you did not say, ``as many 
kids as possible not left behind.'' You did not say, ``the 
highest percentage we have ever had not left behind.''
    You did not say, ``You know, we are going to work very 
hard, and except for maybe the real tough cases not left 
behind.'' You and the President said, and we agree, that in 
this country, no child should be left behind. I have got to 
tell you, that is a tough goal.
    We appreciate not having all of the typical qualifications 
put on a goal. It is a difficult one. We stand ready to be a 
partner with you and the administration to try to achieve that 
goal, because it is an important one for our future.
    Just based on your testimony here today and the chance to 
visit with you, I want to wish you all the best. I am proud to 
have you at the helm to lead us to achieve this goal, and I 
appreciate your testimony.
    Secretary Paige. Mr. Chairman, thank you for the 
opportunity. We also are continuing to invite your thoughts 
about it and members of the committee. So call our office, and 
we can have dialogue on any issue that they feel so fit.
    Chairman Nussle. Well, you saw today there, we are not shy. 
We gave you a number of ideas, particular in IDEA, and we 
appreciate your consideration of them as we move forward. We 
look forward to working with you.
    Secretary Paige. Thank you.
    Chairman Nussle. Thank you very much.
    Chairman Nussle. This is the continuation of the hearing on 
the President's budget for education.
    We have three distinguished witnesses before us from the 
second panel. Chester Finn is the John M. Olin fellow at the 
Manhattan Institute and President of the Thomas Fordham 
Foundation, of which he is also a trustee; he is a 
distinguished visiting fellow at Stanford's Hoover Institution 
and he is on leave from the faculty at Vanderbilt University 
where he has been a professor of Education and Public Policy 
since 1981. We welcome you and appreciate your being with us 
today.
    Lisa Keegan is also with us today. She is serving her 
second term as Arizona's superintendent of public instruction, 
right on the front line of what we have been talking about here 
today. In this capacity, she maintains general oversight of 
Arizona's annual $4.5 billion public education efforts for 
students in K-12. In addition, she serves on the State's Boards 
for Universities, Colleges and Charter Schools.
    We also will have with us momentarily the ranking member of 
the Education and Work Force Committee, the Honorable George 
Miller of California, who is well known in the United States 
Congress and the public as a leading advocate on behalf of 
education issues. We look forward to his testimony as well.
    Why don't we begin with Mr. Finn. We will put your entire 
statement in the record and during your time, we would ask you 
to summarize and give us your best advice here today. We 
appreciate your attendance. You may proceed.

   STATEMENT OF CHESTER FINN, JOHN M. OLIN FELLOW, MANHATTAN 
       INSTITUTE AND PRESIDENT, THOMAS FORDHAM FOUNDATION

    Mr. Finn. Thank you.
    It is an honor to be on deck today with Ron Paige, Lisa 
Keegan and George Miller, three great education reformers. I 
notice that Secretary Paige was praised earlier for not being a 
theoretician. I guess I am guilty, at least in large parts of 
my life, of being a theoretician. I apologize and beg the 
committee's indulgence.
    I think it is important to remind ourselves as we commence 
scrutiny of the fiscal 2002 education budget that the Federal 
Government is very much the junior partner in American 
education. This is exasperating to some who would like Uncle 
Sam to be in the driver's seat but that is not where he is. As 
a result, I think a little humility is in order with respect to 
what Washington can accomplish in this field.
    In elementary and secondary education, there are really 
just a few areas where Uncle Sam tends to call the shots, 
notably in special education, much discussed today, civil 
rights enforcement, and in the areas of research, assessment 
and statistics. Everywhere else, the Federal role is 
supplemental, even peripheral.
    The hard reality is that many of these supplemental 
programs, to everybody's great regret, accomplish very little 
besides the expenditure of tax dollars for worthy-sounding 
purposes. They are ineffective. In some cases, such as the big 
Title I Program, they have been ineffective for decades, 
despite the billions spent on them. The same is true of the so-
called Safe and Drug-Free Schools Program, the Bilingual 
Education Program, the Regional Educational Laboratories, and I 
could continue.
    By ineffective, what I mean is that these programs are not 
accomplishing their stated purposes. They are spending money, 
to be sure, giving people jobs, sometimes doing perfectly nice 
things for kids, like furnishing after-school programs, but 
they are not bringing about the primary results their creators 
had in mind or that their rhetoric implies they are 
accomplishing.
    There is not a shred of evidence that America's schools are 
safer or freer from drugs as a result of the Federal program 
dedicated to this worthy cause. Kids are not learning English 
better or faster because of the bilingual education dollars. 
Particularly lamentable, in my view, is the 36-year failure of 
the Title I Program to narrow the achievement gap between 
disadvantaged youngsters and their better-off classmates.
    Narrowing or eliminating that gap and thus helping to boost 
poor children out of poverty was the goal of President Johnson 
and the Congress in 1965 when they enacted the Elementary and 
Secondary Education Act with Title I as its centerpiece. 
Thirty-six years later, the Title I Program, now much larger, 
has accomplished next to nothing by way of gap narrowing and 
achievement boosting.
    With the benefit of hindsight, I think we can begin to 
understand why. I think we can look at the assumptions that 
were in the minds of the Congress and the President in 1965, 
assumptions that might have made sense then, but seem plainly 
wrong today and I think go far toward explaining why Title I 
and so many other programs have actually accomplished so little 
and why they need radical overhaul.
    Three assumptions are worth unpacking. First, it was 
assumed in 1965 that pumping additional dollars into schools 
and school systems would cause better academic results. 
Unfortunately, we know today that you can't take for granted 
that that kind of connection will occur.
    Secondly, it was assumed that States and districts were 
both incompetent and untrustworthy when it came to the 
education of poor and minority children. Instead of being given 
additional money to spend as they saw fit, they were given it 
in the form of categorical programs that spelled out exactly 
where and how it must be spent. This is what led to the culture 
of compliance that Secretary Paige spoke about.
    Third, it was assumed that the proper way to distribute 
Federal dollars was to hand them to public school systems on 
the basis of demographic and geographic formulas. Nobody 
thought to distribute the money directly to the eligible 
children or to specify that it go to the schools in which they 
were studying rather than the districts where they live.
    Congress changed this assumption in 1972 for higher 
education when it adopted the principle of aiding the student 
rather than the institution. It has never been changed at the 
K-12 level, however, even though today millions of children go 
to schools other than the public schools in their 
neighborhoods.
    Those three assumptions were written into law in 1965 and 
remain true central features of Federal K-12 policy today. Yet, 
it seems to me the world has changed since 1965 and since 1975 
when the Special Education Program was enacted.
    Children now attend many different sorts of schools in many 
different places. States are leading America's education 
reform. Academic achievement is everyone's focus. We know all 
too well that pouring more resources into one end of this pipe 
does not necessarily boost the learning that emerges from the 
other end.
    Our Federal education policies represent a museum of 
antiquated assumptions and archaic practices. Is it any wonder 
that so few of our programs are effective, that so many are 
ineffective? To his credit, President Bush has proposed to 
change much of this. The sweeping reforms enumerated in his No 
child Left Behind package would go a long way toward bringing 
Federal education policy into the 21st century, modernizing the 
assumptions underlying those programs and changing their 
practices.
    I especially salute its focus on academic results rather 
than inputs and the ways that he would empower districts and 
schools to concentrate on what they are accomplishing rather 
than on compliance with innumerable rules.
    The President's budget appears to put more money into the 
areas he thinks need it most but he does so with the 
expectation that the necessary program reforms will be made 
before these additional monies are spent. It seems to me this 
is the centerpiece of attention today.
    If the program reforms he has suggested and perhaps some 
other reforms get made in time, then the additional money will 
be worth spending in fiscal 2002. If they do not get made, 
frankly much of that money will not be worth spending, except 
perhaps as fiscal relief for States and districts, which is not 
a bad thing to do but doesn't cause children to learn more.
    If the programs remain substantially unchanged, I think we 
should be honest, they did not produce the desired results 
yesterday, they are not producing the desired results today, 
and simply adding more money tomorrow will not alter that sad 
fact. We need to understand the main reason they are not 
accomplishing what we would like: they rest on these outdated 
and incorrect assumptions about how the world works.
    Let us change the assumptions and the ground rules before 
expecting money spent on these programs to be a good investment 
in the improvement of children's learning.
    Thank you again for the opportunity to appear today. I look 
forward to your questions.
    [The prepared statement of Chester E. Finn, Jr. follows:]

   Prepared Statement of Chester E. Finn, Jr., John M. Olin Fellow, 
      Manhattan Institute and President, Thomas Fordham Foundation

    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify today.
    As you know, the Administration has not yet made detailed program-
by-program budget recommendations for fiscal 2002. It has, however, 
indicated the order of magnitude of the spending that it proposes for 
education in general and the U.S. Department of Education in 
particular; it has spelled out its top priorities in this area; and it 
has given specifics for certain programs. It is time, therefore, for a 
preliminary appraisal.
    Let's remind ourselves that the Federal Government's involvement 
with and spending on education go a lot farther than the Education 
Department's budget. Hundreds of education programs are scattered far 
and wide across the executive branch. Obvious examples include the Head 
Start program in H.H.S., the billions that flow into biomedical 
research in U.S. universities via the National Institutes of Health, 
and the many science and math education programs at the N.S.F. Less 
obvious examples include the Defense Department's overseas schools, the 
Agriculture Department's graduate school, and various of the Labor 
Department's job training programs.
    It's important also to remind ourselves that, despite this far-
flung array of programs and activities and the sizable sums spent on 
them, the Federal Government remains very much the junior partner in 
U.S. education. This is frustrating to people--including more than a 
few Members of Congress and the Executive Branch--who would like for 
Uncle Sam to be in the education driver's seat. But that's not where he 
is or ever has been and, barring major rewritings of both the Federal 
constitution and fifty state constitutions, that's not where he is 
going to be tomorrow. A little humility is therefore in order with 
respect to what Washington can accomplish in education. With trivial 
exceptions, the Federal Government runs no schools, hires no teachers, 
publishes no textbooks, grades no kids, sets no graduation 
requirements, and awards no diplomas. Those are state, local and 
school-specific decisions about which Uncle Sam has surprisingly little 
to say.
    Washington has involved itself on the periphery of education, 
however, since the Civil War, when Uncle Sam began to gather education 
statistics and subsidize the creation of land-grant universities. Over 
almost a century and a half since then, myriad programs have 
proliferated. Most of them seek to use Federal dollars to induce 
schools, school systems, states or universities to do something 
different than they otherwise would do, whether that's create drug-
abuse prevention programs, supply extra help to low income children, 
investigate the causes of cancer, underwrite the development of new 
middle-school math and science curricula, or assist with the start-up 
costs of charter schools.
    In K-12 education, there are just a few areas where Uncle Sam has 
become the senior partner, notably in special education, civil rights 
enforcement, and research, assessment and statistics. In higher 
education, of course, Washington plays a central role in aiding low-
income students and paying for scientific research. Essentially 
everywhere else, however, the Federal role is supplemental and, for the 
most part, peripheral.
    The hard reality is that many of these programs accomplish very 
little besides the expenditure of tax dollars for worthy-sounding 
purposes. They are, in a word, ineffective. In some cases, such as 
Title I, they've been ineffective for decades. They've been ineffective 
despite the billions of dollars expended on them. The same is true of 
the so-called Safe and Drug Free Schools Program. The same is true of 
the Bilingual Education program. And it's true of such small but 
persistent programs as the Regional Educational Laboratories. In fact, 
I could suggest a very long list.
    By ``ineffective,'' I mean above all that these programs are not 
accomplishing their stated purposes. They are spending money, giving 
people jobs, sometimes doing perfectly nice things for children and 
schools, but they're not bringing about the results that their creators 
sought or that their rhetoric implies they are accomplishing. There is 
not a shred of evidence, for example, that America's schools are safer 
or freer from drugs as a result of the Federal program dedicated to 
this worthy cause. Kids are not learning English better or faster as a 
result of Federal bilingual dollars. (Indeed, a case can be made that 
those dollars slow down their English acquisition.) Particularly 
lamentable is the 36-year failure of the Title I program to narrow the 
achievement gap between disadvantaged youngsters and their better-off 
classmates.
    Inadequate academic achievement is, after all, the premier problem 
in American primary/secondary education, and the gap between rich and 
poor children is an especially vexing manifestation of it.
    Narrowing or eliminating that gap, and thus helping to boost poor 
children out of poverty, was the goal of President Johnson and the 
Congress in 1965 when they enacted the Elementary and Secondary 
Education Act (ESEA), including its hallmark Title I program. (It was 
also the primary rationale for Head Start, originally part of the War 
on Poverty.)
    Thirty-six years later, Title I, though much larger, has 
accomplished next to nothing by way of achievement-boosting and gap-
narrowing. The main thing it's proven really good at is augmenting the 
budgets of nearly every school system in the land. Another thing it 
does well is tying state and local officials in knots of red tape. But 
it's not good at closing the rich-poor learning gap.
    With the benefit of hindsight, we can see three big assumptions 
that President Johnson and the Congress made about Title I in 1965, 
assumptions that might have made sense then but that seem to me plainly 
wrong today and that go far toward explaining why the program has 
accomplished so little and suggesting how it should be changed before 
more billions are poured into it.
    First, it was assumed in 1965 that pumping additional dollars into 
schools and school systems would cause better results to come out of 
them. Instead of focusing on the results, Congress focused on the 
inputs, taking for granted that improved achievement (or other desired 
changes) would follow. Regrettably, we now know that this simply isn't 
true.
    Second, it was assumed in 1965 that states and districts were both 
incompetent and untrustworthy, especially when it came to the education 
of poor and minority children. So instead of being given additional 
money to spend as they judged best, they were given it in the form of 
``categorical'' programs that spelled out exactly where and how it must 
be spent. Today, I submit, the real energy for education reform in this 
country is coming from states and localities, yet their Federal dollars 
remain tied up in categorical programs that often get in the way of 
their own priorities and programs.
    Third, it was assumed in 1965 that the proper way to distribute 
Federal dollars was to hand them to public school systems on the basis 
of demographic formulas focused on how many children of one kind or 
another lived within the geographic boundaries of those systems. Nobody 
thought to distribute the money to the needy (or otherwise eligible) 
children themselves or to specify that it should go to the schools that 
they actually attend rather than the districts where they live. 
Congress fundamentally changed this assumption for higher education in 
1972, when it resolved to aid students rather than institutions. But it 
has never been changed at the K-12 level, even though today millions of 
children go to schools other than the public schools in their 
neighborhoods. Today, however, their Federal aid doesn't accompany them 
to their charter school, their magnet school, their open-enrollment 
public school in another neighborhood or district, their cyber school, 
their home school or their private school. Because, it turns out, the 
aid isn't really theirs. It's still the school system's. Thus millions 
of low-income children receive no Title I aid at all.
    Those three big assumptions--to focus on inputs rather than 
results, to mistrust the states and keep the Federal aid dollars 
tightly wrapped in categories, and to fund institutions rather than 
children--remain central features of Federal K-12 policy today.
    Yet the world has changed since 1965 when E.S.E.A. was enacted and 
since 1975 when the predecessor of I.D.E.A. was enacted. Children now 
attend many different sorts of schools in many different places. States 
are now leaders of education reform. Academic achievement (or ``value 
added '') is where everyone's focus is. And we know all too well that 
pouring more resources into one end of this pipe does not necessarily 
increase or improve the learning that emerges from the other end.
    Our Federal education policies, in short, represent a museum of 
antiquated assumptions and archaic practices. Is it any wonder that 
most Federal education programs are not very effective?
    To his great credit, President Bush has proposed to change much of 
this. The sweeping reforms enumerated in his ``No Child Left Behind'' 
package would go a long way toward bringing Federal education policy 
into the 21st century, modernizing the assumptions underlying the 
programs and changing their practices as well. No, it doesn't deal with 
everything--such as the sorely needed overhaul of I.D.E.A.--and it 
doesn't go as far as I would wish in some areas, such as funding 
children rather than institutions. But it makes huge strides, 
particularly in its focus on academic results rather than inputs, and 
in the ways it would empower states, districts and schools to 
concentrate on what they're accomplishing rather than compliance with 
myriad rules.
    The President is a consistent man. His education policy package 
closely traces his campaign statements and proposals. He's doing 
exactly what he said he would if elected. As I read it, his 2002 budget 
also tracks those policies and priorities, as it should. It puts more 
money into the areas that he thinks need it most and does so with the 
expectation that the necessary program reforms will be made in time to 
govern the actual expenditure of these dollars when the next fiscal 
year rolls around. As has been widely noted, the President's 2002 
budget also contemplates larger increases in education than in any 
other area. This, too, reflects his priorities, notably his belief that 
fixing our K-12 education system is America's most urgent domestic 
priority.
    If the program reforms that he has suggested--and perhaps some 
others--get made in time by Congress, the additional money will be 
worth spending. If they don't, frankly, much of that money won't be 
worth spending except as simple fiscal relief for states and districts. 
There are, of course, some areas where we can be reasonably sure the 
money will produce the intended result. I'm thinking of small programs 
operated directly by the Federal Government, such as the National 
Assessment of Educational Progress; of programs designed simply to 
transfer resources to people in the form of enhanced education 
purchasing power, such as Pell grants; and of programs where the mere 
expenditure of Federal dollars helps something promising to happen that 
otherwise would be harder, such as the creation of more charter 
schools. Even here, though, we should take care not to become 
softheaded or take too much for granted. What we should most want to 
know about Pell grant recipients, for example, is not how many of them 
attend college but how much they learn there, how much value their 
college experience adds to them. And excited as I am by charter 
schools, at the end of the day we want to know not just how many of 
them there are but how much and how well their students are learning.
    What concerns me most, however, are the big elementary-secondary 
programs such as Title I, where we cannot count on anything much 
happening as a result of the Federal dollars being spent, and the 
I.D.E.A. program, whose noble purpose often blinds us to the problems 
that beset it. These are examples of programs in urgent need of basic 
rethinking and reworking so that we can have a greater confidence that 
the dollars spent on them will yield the desired results.
    This is why I say that, if major reforms such as the President has 
proposed actually get enacted, then the additional investments he has 
called for--perhaps even more--will be worth making. If the programs 
remain substantially unchanged, however, we need to be honest with 
ourselves. They did not produce the desired result yesterday. They are 
not producing it today. And simply adding more money tomorrow won't 
alter that glum fact. We need to understand that the main reason they 
aren't accomplishing what we would like is that they rest on out-dated 
and erroneous assumptions. Let's change their assumptions and their 
ground rules before expecting money spent on them to be a good 
investment in the improvement of children's learning. Let's also remain 
humble. With the few exceptions noted above, even new assumptions and 
changed ground rules won't place Uncle Sam in the education driver's 
seat. But how much better off we would be if he were at least a 
cooperative passenger rather than one standing outside the vehicle 
watching it go by while shouting at the driver?
    Thanks once again for the opportunity to talk with you today. I 
look forward to your questions.

    Chairman Nussle. Thank you.
    Ms. Keegan, welcome. Your entire testimony may be made a 
part of the record. You may summarize as you would like.

 STATEMENT OF LISA KEEGAN, SUPERINTENDENT, PUBLIC INSTRUCTION, 
                        STATE OF ARIZONA

    Ms. Keegan. Thank you for the opportunity to be here with 
Mr. Finn and Secretary Paige. I have also admired Congressman 
Miller's stance on accountability.
    I want to talk a bit about the plan and speak on behalf of 
what has happened in the State of Arizona and also on behalf of 
the Education Leaders Council, of which I am a member, a group 
of very reform-minded, results-minded school chiefs. We are 
much in support of the President's plan. I will talk about a 
few key features.
    As Mr. Finn said, Federal involvement is not going to be 
the sole determinant in the improvement of our children's 
lives. As a matter of fact, I think it needs to be approached 
with great caution. I do think there are a couple of areas 
where when focus is properly placed, it can be very helpful.
    The intention behind Title I is exceptional, to close the 
gap for disadvantaged kids. Unfortunately it hasn't worked. It 
can work, I believe, if we focus on the President's focus, an 
unapologetic attention to academic success, whatever it takes, 
students first.
    Also, give the States, such as Arizona and others, the 
flexibility it requires to innovate in search of this goal. We 
cannot continue to simply do what we were doing yesterday and 
expect the same results. I think Einstein called that the 
definition of insanity. We have to change. We have had to do it 
in Arizona. We cannot do that when the Federal Government 
imposes on us a maintenance of effort strategy where I have to 
count heads for every program and make sure they are only 
working on those things they were doing yesterday.
    My office has been completely realigned where we could 
around academic standards and around the choices we offer in 
Arizona. We have to have flexibility to do that. If we must 
keep people in programs that frankly don't work, are outdated, 
or no longer useful, it is a waste of their time and a waste of 
the taxpayers' money. Flexibility is critically important to 
us.
    I want to talk about accountability and measurement. I 
realize for many this is a difficult issue. I think it speaks 
poorly for where we are in the United States that testing is 
controversial. You never go to a doctor and complain that he or 
she is spending far too much time on blood testing and x-rays 
and why don't we just get to treatment. There is no way to know 
where our children are unless we assess and measure them. 
Frankly, we simply have not done so in American education every 
year, every child in many places.
    We started doing it in 1997 in Arizona and it immediately 
became clear to us that there was a decline in the academic 
achievement of our children starting just after the fourth 
grade. We went to the curriculum and could identify what was 
going on. There was a lot of philosophy being taught in the 
fifth grade and we stopped teaching content.
    That is not just Arizona. That would indicate to us as a 
Nation, if we look at our curriculum, we can identify what is 
going on. I think the reason we don't talk about this as much 
in the public debate as we do about IDEA, because we have 
several family members involved in special education. The 
reason we don't talk about it as much is because in IDEA it is 
easy for us to recognize it is simply underfunded. In the case 
of Title I, it is more than money. It is technique, philosophy, 
content and it is hard to get your hands around. The way you 
get your hands around it is with measurement.
    We are deeply grateful in our State that the President is 
standing behind an effort we have been trying to put forward to 
assess all children every year and look at progress and to 
diagnose.
    I heard Secretary Paige say we could close the achievement 
gap tomorrow if we would quit testing. That is the truth 
because we could ignore it. When you test all children every 
year, it is impossible to ignore.
    I want to beg the members to continue to work on ways to 
allow for and include more choice. In Arizona, academic school 
choice is a fundamental part of our system. Our system is 
basically run around the idea that the money we fund students 
with belongs to the students' betterment. We fund students as 
they go to a school that works for them and deliver the money 
to that school. We then inform parents how that school 
performs, a fairly simply model.
    It includes public charter schools, tax credits for 
scholarship organizations for those children who would choose a 
private school and could not otherwise afford it. It has 
resulted in Arizona in increased academic achievement. As a 
matter of fact, Arizona is one of the fastest improving States. 
We have a ways to go but we are an improving State. We owe a 
great gratitude to our teachers for that.
    The reason they are doing that is because we have made it 
possible, desirable and have injected competition for the work 
on behalf of children into our system. It makes a difference.
    It is very important to note that in Arizona, our public 
charter schools are not only competitive with the traditional 
system, they may very well be outpacing them as far as growth 
is concerned, partially I believe because they are allowed to 
innovate, allowed to go around the system Secretary Paige was 
talking about in terms of who they hire as teachers. They bring 
them in with professional qualifications, not necessarily 
through the traditional certification route. We need to learn 
from that.
    I also think it is important that the NEA last week put out 
a study saying 63 percent of the public was in favor of the 
President's choice idea exactly as it has been stated. For 
children in failing schools, a strong majority is saying 
absolutely these children deserve a choice. It is an urgent 
situation.
    I want to end by saying how much we appreciate the 
President's focus on teachers. This is where it all happens. We 
do need to change our thinking about how we bring teachers into 
the system, get rid of what I think is a wall and create a 
broad funnel that brings teachers in from other areas. We need 
to innovate in the ways that we prepare our teachers, but most 
of all, we need to prepare our teachers in strong content, 
strong intellectual material and also glorify teachers on the 
basis of their ability to progress students and nothing else. 
That is what they are there for, to benefit their students.
    I think we need to strongly question those certification 
processes or endorsement processes that do not have at their 
core the progress of students.
    Thank you very much for inviting me and I look forward to 
your questions.
    [The prepared statement of Lisa Keegan follows:]

  Prepared Statement of Lisa Graham Keegan, Superintendent of Public 
                     Instruction, State of Arizona

    Mr. Chairman, Members of the Committee, it is a pleasure to appear 
before you today to discuss the President's proposed budget for the 
Department of Education. I am particularly honored to be sitting here 
with Secretary Paige, whose work and career I have followed for many 
years. His commitment to education is second to none, his enthusiasm is 
infectious, and students under his leadership excel. He is an excellent 
choice to lead the Department of Education into the 21st century.
    Mr. Chairman, I must admit I was pleasantly surprised to be asked 
to testify before this committee, because in all my years as 
Superintendent of Public Instruction--and, before that, as a member of 
the State Legislature--I have rarely made the pitch that more Federal 
spending is what is needed to address the challenges facing education 
today. In fact, I made rather a buzz a year or so ago with a piece I 
wrote for the Fordham Foundation when I summed up the appropriate role 
of the Federal Government in education with the words, ``back off.'' 
Obviously, I have never been known for subtlety.
    This advice, however, remains consistent with my belief that there 
can still be an appropriate, even successful, role for the Federal 
Government in education, provided that three things happen, and usually 
in this order:
     First, the President proposes budget priorities that 
encourage the academic growth of children, and not the explosive growth 
of educational bureaucracies.
     Second, that the Congress uses its legislative finesse and 
power of the purse to direct resources where they are most needed 
rather than where they are necessarily the most wanted.
     And third, that the U.S. Department of Education takes its 
role seriously in developing regulations and guidance that steer, 
rather than strangle, States, districts and schools.
    In the case of the President's budget proposal, I think the first 
criterion for success has been met. The President has clearly stated 
that in his Administration, there will be no excuses for failure--
socioeconomic status, race, ethnicity, or limited English proficiency 
will no longer be accepted, or blamed, as inhibitors of educational 
success. The President assumes, and then demands, that all children in 
this Nation will succeed.
    And he has done this not by creating an endless number of 
discretionary set-asides, or by creating programs that worry first 
about maintaining existing bureaucracies or systems. Rather, he has 
trained his eye and his efforts on the child, and on working to fund 
priorities that look at the educational needs of children and what is 
required for them to succeed.
    It is appropriate, then, that the President--and the First Lady--
have made reading the first priority of his education plan. Reading is 
at the core of preparing children to learn for life--no one gets ahead 
unless they can read first, and the President has put up a billion 
dollars as a down payment to ensure that the kids get there. Almost a 
quarter of the total increase in educational spending will go into the 
President's reading initiative.
    Reading and reading instruction are issues we as a nation have 
tinkered with around the edges for decades, and the fiasco regarding 
whole language probably cost us a generation worth of progress. The 
President has committed the resources necessary to ensuring that we can 
have every child in this nation reading by the time they reach the 
third grade, and it is a commitment I encourage you to help him meet.
    However, the real showpiece of the President's plan, in my opinion, 
is its strong accountability mechanism. Accountability lies at the 
heart of true educational reform because it not only inherently demands 
success, but also provides the means of identifying the shortcomings in 
the system and where improvement is needed. We have had a strong 
accountability system in place in Arizona for a number of years, and it 
has helped us shift the focus in our state away from looking for 
excuses toward looking for ways to succeed.
    Using our state assessment system--a unique combination of two 
assessments--a criterion-referenced test measuring our rigorous Arizona 
Academic Standards and an annual norm-referenced test that delineates 
academic gain--we know which students in our state are succeeding and 
what it is they're learning. More important, it also tells us which 
students are not succeeding, and what it is they're not learning so we 
can work to fix it. This is a critical component of education in 
Arizona, and I am pleased to finally see it reflected in Federal 
policy.
    One of the basic assumptions of our state's accountability system--
and in the President's plan as well--is that all children can learn. We 
have the same expectations of all children, and--horrors!--we test all 
children. We really need to conquer this fear of testing. Testing is 
not just an intellectual exercise for students, nor is it a punishment. 
And blaming a test for low academic achievement is like blaming a fever 
on the thermometer.
    When done well, testing is a useful and necessary tool in 
determining where we are as teachers, students, policymakers, and a 
nation. You cannot hold states accountable unless you have a valid 
mechanism for measuring success. Without testing, all we have are vapor 
trails of good intentions zooming off into the sky.
    Therefore, I applaud the President's effort to encourage annual 
testing and I also believe in publishing the results of those tests in 
school-by-school report cards. We already issue report cards in 
Arizona, and we make them widely available through the Internet to 
anyone who wants to view them. School report cards have proved to be 
one of our most valuable tools in helping schools look at where they 
need to do better, and parents have indicated to us that they are the 
first thing they look at when trying to determine which school is best 
for their children. When moving into a new neighborhood, a parent can 
simply log onto our web page, type in the name of his or her school 
district, and pull up a report card on every school in their new 
district.
    I am also pleased to note a new accountability provision in the 
President's budget request that not only imposes consequences on states 
and schools that do not make progress, but which also rewards states 
and schools that succeed. I must confess to being somewhat baffled by 
the conditions of the current school improvement law which say that the 
more you fail, the more funding you receive. While I understand and 
support the need to target funds to schools where they are most needed, 
such an approach sends a curious message to the school whose students 
made progress and received only passing notice, while the school down 
the street picked up an additional $200,000 for failing. I recently 
heard from some superintendents in the rural southeastern part of 
Arizona who asked, ``How come you and your staff seem to only visit us 
when we're doing badly?'' and while that is not exactly true, I had to 
respond with, ``Because that's when the law tells us to.'' I am pleased 
that, with this proposal, we can at last acknowledge excellence at the 
same time we are providing additional services to those schools that 
need help.
    I would encourage the Congress to work carefully to ensure that any 
legislative proposals will reflect the President's commitment that, 
``accountability must be accompanied by local control, in both measures 
and means.'' While I am very pleased that the President, in his budget 
blueprint, has indicated that States will be given the freedom to use 
Federal dollars to create comprehensive systems of accountability, I 
would caution you not to be overly prescriptive in describing the 
nature of that system. Let the States decide what type of annual 
assessment works best for their students and schools in determining 
academic gain and excellence in student achievement. Such action would 
honor the work that states are doing now in moving toward high 
standards for all children, as well as the creation of statewide 
assessment and reporting systems. So please, let the States decide how 
they will test.
    I am very encouraged by the provisions in the President's plan to 
empower parents and provide students and their families with more and 
more educational options. Choice is what we stand for in Arizona--it 
lies at the heart of everything we do. We have the largest system of 
public charter schools in the United States to give parents and 
students more options for the kind of school they want. We require all 
public schools in Arizona to have open enrollment policies and written 
protocols for accepting students from outside their home district. We 
issue school report cards to ensure parents have the information they 
need to make informed choices, and we provide tuition tax incentives 
that provide qualifying students with real choices of public and 
private schools.
    I applaud the President and Secretary Paige's decision to continue 
the discussion on educational choice in the budget. The President has 
proposed allowing families in chronically failing schools to use the 
Title I dollars that their own child generates to pay for supplemental 
services or, perhaps, private alternatives. I am sure some of the 
members of this committee had a visceral reaction to the last two words 
of that proposal, but please, keep talking about it.
    In fact, I noted with considerable interest the results of a survey 
conducted for the National Education Association (NEA) which indicated 
that a clear majority of Americans support allowing parents of children 
stuck in failing schools to use tax dollars to send their children to 
any public, private, or charter school. According to the survey, the 
proposal enjoys the support of 65 percent of men, 63 percent of 
minority voters, 55 percent of Democrats, and 65 percent of 
independents. I think you will find the support for reasonable 
approaches to choice--including private education--is there.
    As I mentioned, in Arizona, we have proved that students can be 
given private choices in a way that passes Constitutional muster. State 
law allows individuals to donate up to $500--in exchange for a dollar-
for-dollar tax credit--to non-profit organizations set up to award 
scholarships to at-risk students so they can attend private school. 
These things can be done in a way that is fair and without infringing 
upon First Amendment issues. Keep looking at ways to ensure those 
dollars support a student, not a system.
    It is this point--watching out for the student, and not the 
system--which I want to reiterate as you are talking about both the 
budget and legislative proposals. I said earlier that Congress should 
work to send resources where they are needed, not necessarily where 
they are wanted. The President has proposed to dramatically increase 
funding for education, and I know some Members have discussed offering 
amendments to ``fully fund'' programs like Title I. But I'm telling you 
now, such increases aren't meaningful if the funding never makes it to 
the child who generated the funding in the first place.
    Congress needs to get over this recurring urge to hold everyone 
harmless when it begins allocating Title I funds. While States may 
certainly be held harmless, the children themselves certainly aren't. 
Continuing to fund a state based on where its kids were years ago 
instead of where they are now means overpaying one state while 
underpaying another, and all at the expense of the disadvantaged 
student. It is the student, after all, who is entitled to the funds, 
not the State or a district. A hold harmless clause results in the 
funding of phantoms. Let's allocate these precious funds based to those 
who need them--real kids in the classroom right now--and not to those 
who want them just because they've always had them.
    The President has also encouraged choice by providing incentives 
for the growth of charter schools by providing seed capital for start 
up costs. As reported by the Congressional Research Service, one of the 
major reasons for closing charter schools has not been failure to 
perform academically, but rather insufficient costs for facilities, 
since most charters cannot rely on local taxes for their basic 
expenses. This provision in the budget helps address this significant 
need, although I want to alert the Congress that you will need to look 
at a number of other issues, including the method of allocating funding 
to school districts, to ensure that charter schools can draw down funds 
in a timely manner in order to deliver many of the services described 
in the budget.
    The largest increase in the President's budget goes toward 
teachers--recruitment, training, hiring and retention--and I couldn't 
agree more that this is one area where we need to add some significant 
resources. We need to take a good hard look at the critical issues of 
training and retention, especially in the areas of mathematics, 
science, vocational education and special education. States need to 
take the initiative to return education to the teachers and make 
teaching an attractive profession again. Finally, we need to keep great 
teachers doing what they do best--teaching in the classroom, not 
administering programs or babysitting.
    The $2.6 billion the President is proposing for teacher quality is 
a good start, and I encourage the Congress to take full advantage of 
this investment of resources by crafting a flexible, quality program. 
No more overly prescriptive, formula-driven grants, such as the Class 
Size Reduction grant. Instead, allow States the flexibility to pursue 
initiatives to encourage innovation in the classroom, through programs 
such as Arizona's Teacher Advancement Program (TAP).
    The TAP program is an initiative we undertook last year with the 
cooperation of the Milken Family Foundation to revamp the current 
school structure in order to provide greater opportunities for teachers 
without asking them to leave the classroom. We can offer them multiple 
career paths, better salary compensation, and stronger support for new 
teachers. The TAP program lets teachers not only get back to teaching, 
but also allows them to take stronger roles in training other teachers, 
and sharing expertise with other districts. Importantly, the TAP 
program advances the importance of judging teacher quality on student 
performance. A successful teacher takes the child where she finds him 
and moves the child. Success for students is gauged in academic 
progress, and success for teachers needs to be based on the same 
measure. This is just one example of an initiative Arizona could pursue 
more widely and freely with the flexibility provided in the President's 
proposal.
    I also want to continue to encourage you to follow the President's 
lead in consolidating programs. I am pleased, for example, to see the 
President propose a merging of two programs that serve identical 
purposes--the 21st Century Community Learning Centers and the Safe and 
Drug Free Schools and Communities Act--into a consolidated grant. While 
the President has proposed making this a State formula grant, I would 
recommend either that LEAs apply directly to the U.S. Department of 
Education for this funding, as they do under the present 21st Century 
program, or that the State distribute its formula funds competitively. 
The onus would then be on the states to ensure that programs followed 
best practices in terms of prevention programs, and that grants would 
be made in a manner that ensured resources were adequate to meet the 
needs of the program, rather than just drizzling out of funds by 
formula, as under the current Title IV program.
    I also want to credit the President and the Secretary for proposing 
that States be allowed to redirect resources provided for FY 2001 under 
the school renovation fund authorized in this year's Omnibus 
Appropriations Bill. Arizona received $17.5 million under this grant, 
and the President has asked that States be allowed to use these funds 
for renovation or, if they so choose, for special education or 
technology. While my agency does not administer these funds--the Act 
required that we pass these funds through to the Arizona School 
Facilities Board--we would like further direction on how we might, for 
example, direct half these funds through to the Facilities Board for 
renovation, and invest the remainder in technology initiatives, such as 
our Regional Training Centers.
    We've been talking a lot today about what we're spending, Mr. 
Chairman, but let me also talk a little bit about what we're saving. 
I've been a legislator, and I know there are lots of things that are 
nice to do with funding, especially at the Federal level where the 
funds are somewhat more impressive. The President has proposed budget 
savings of more than $430 million in his education budget, mainly 
through the discontinuation of one-time and short-term projects.
    I know it is difficult when negotiating a budget--and even more 
difficult when negotiating appropriations--to refrain from creating all 
sorts of little projects to appease all sorts of different 
constituencies. But I hope you can appreciate that what the President 
has done here is what States are asked to do all the time--make the 
most of the funding you have. To this end, the President has focused 
his efforts on long-term, big picture initiatives that will improve 
student achievement, hold States accountable, empower parents, and keep 
our teachers well trained. I urge you to concentrate on these 
initiatives, rather than winnowing money out on smaller projects. We 
don't need lots of small projects with even more reporting requirements 
and audit checks. Let's stay on task.
    Mr. Chairman, I believe the President has given you a good start, 
and I hope the committee will include his recommendations in the FY 
2002 budget resolution. It is now up to you, the Congress, not only to 
implement his budget, but also to develop many of the initiatives he 
discusses in his blueprint. I encourage the authorizing committees in 
the House and Senate to use the President's proposal as a guide when 
developing this year's reauthorization bills.
    There is much that is promising in this budget proposal, and much 
that will require thoughtful deliberation by the Congress. As for those 
of us in the States, if you will provide us with the funding and 
flexibility proposed in this budget, I promise you we will ensure that 
our students have the tools they need to achieve and to succeed. We 
will implement the accountability mechanisms that quality education 
demands. We will make our teachers the best in the world. We will 
provide parents with information and choices they need to make the best 
decisions for their children. And I look forward to us doing it 
together, at the State and Federal level, in what is finally a true 
cooperative effort.
    Mr. Chairman, thank you very much for the opportunity to speak with 
you today. I look forward to responding to any questions you and the 
Committee may have.

    Chairman Nussle. Thank you.
    I enjoyed your comments about what we expect and our 
expectations in 1965, 1975, 1985 and now. It reminds me of the 
phrase ``If you always do what you always did, you will always 
get what you always got.''
    To some extent, I even have this belief that maybe it just 
takes a few more bucks. I do hear the concerns from our 
superintendents, our teachers, our instructors, our school 
boards back home that say, ``We are not making it.'' Mr. 
Clement from our committee mentioned music education. I am not 
suggesting this entire budget will pass or fail because of 
music education, but music and art are important, languages are 
important. Yes, it is reading, writing, arithmetic, certainly, 
but it may seem a few more bucks might help.
    Second, your comment that the local areas are not 
trustworthy and that was kind of the belief in 1965. At that 
point in time, it was in direct regard to the treatment of 
minority students and students who were disadvantaged in other 
ways, maybe students with disabilities. Certainly, that was 
true but we still seem to have a certain level of, I don't know 
if mistrust is the right word, but certainly a belief that we 
know better out here how to manage it.
    I am told by my local administrators that 6 percent of 
their budget comes from us but about 60 percent of the mandates 
and regulations come from us. We certainly have a lot of rules, 
regulations and things we believe they ought to be doing, but 
we are not putting the money behind it.
    I am not arguing with your point that it is not just money; 
I am wondering what advice you would give us with regard to the 
prioritization of the resources that we send out? Should we try 
to give more advice and direction toward those resources based 
on the good testimony and information we get here, or should it 
be as flexible as possible to allow the local school districts 
and States to make those decisions?
    Give me your advice based on what I said on how we should 
proceed with our budget. I will offer that to both of you.
    Mr. Finn. There are some situations where the mere 
expenditure of money brings about a result that you may find 
desirable. If the goal is to have more children participate in 
after-school programs, for example, then adding more funds for 
children to take part in the after-school program may be 
thought to be successful.
    A different question is whether sitting in an after-school 
program is sufficient or whether it is important for the 
children also to be learning something, doing their homework or 
in some other way benefitting from more than day care. That is 
where the questions get sticky in education, situations where 
mere delivery of the service is not sufficient and where an 
actual educational result is sought.
    As far as basic strategy, it is foreshadowed in the part of 
the President's proposal called Charter States. I believe the 
basic strategy the Federal Government should be using for most 
of its education dollars is embodied in the theory of charter 
schools, which is to let them do what they want with the money 
but hold them strictly accountable for whether the desired 
results are produced.
    Most modern corporations and other organizations function 
this way. They are loose with respect to means and tight with 
respect to ends. I think this strategy is the appropriate way 
to steer Federal education policy in almost all program areas. 
We have been doing it the other way around for 35 years, being 
tight about means--hence all those regulations--and loose about 
ends, hence the absence of results. I think we need to turn 
that upside down.
    Ms. Keegan. I would second that. There are certain things, 
as we say in the State Department, that are nonnegotiable. That 
is the outcome. As a part of our role at the State Board of 
Education, here are the standards for all students, not a few, 
this is where everyone is going to be, here is how we will 
measure that, here is what we expect and we have 
responsibilities to provide resources for that end, but after 
that, the maximum amount of flexibility in getting that done at 
the school level is critical.
    We have a national, shameful problem in an achievement gap. 
We know from the educational science of the last 15 years that 
annual testing that allows you to look at gain of pupils and to 
ensure a rich experience each and every year is important 
beyond measure. I do not think it is an unreasonable request 
that all of us get together. On behalf of the Education Leaders 
Council, we endorse that idea fully of a picture every year of 
where these kids are.
    In Arizona, we use the National Assessment of Educational 
Progress as a second snapshot of what is going on in Arizona. 
We like it and I would say as a national database, it is just 
about the best we have right now because there are bad tests 
out there, there is bad curriculum out there. To the extent we 
do not get together and show where kids are progressing, we 
will lose them.
    I don't have any problem with nonnegotiables in return for 
the investment that is made to close this achievement gap, the 
investment you make in Title I, but I think our schools need to 
have flexibility to get there. We will demand the same from 
them.
    Chairman Nussle. We have joining us a distinguished Member 
of Congress who takes a back seat to nobody when it comes to 
the advocacy of education. He is the ranking member of the 
Education Workforce Committee. We welcome you, and your entire 
statement will be in the record, Mr. Miller. We appreciate your 
attendance and look forward to your testimony.

 STATEMENT OF HON. GEORGE MILLER, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Miller. Thank you.
    Let me see if I can pick up where my two colleagues left 
off and that is, I think the President has quite properly set a 
tone for education reform by concentrating on the results that 
we as policymakers, parents and hopefully children should 
expect when they attend a public education system in this 
country. That is that we would have high standards and measure 
whether or not children are making progress toward those 
standards.
    I happen to agree with the idea that we would measure that 
annually so that we could on a real time basis direct resources 
to those children and to those schools who need it the most so 
that we don't end up with children at fourth or eighth grade 
who are 2, 3 or 4 years behind their peers, and in many 
instances with little hope of rescuing and recovering those 
children to a level that will allow them to benefit from the 
rest of their educational experience or to participate in 
American society.
    The President has made it very clear that there are 
components to this system, that we need quality teachers, we 
need an environment that is conducive to education and we need 
to measure those schools with respect to that outcome and be 
prepared to take actions for those schools that fail the 
children in that quest for quality education.
    We must also understand that if we want these real reforms, 
in many States, it is hard to think we are still talking this 
way now, but these are dramatic reforms from the way they are 
conducting business today; that if we want those reforms and 
want the results the President has said he wants, his budget 
simply does not provide the means by which we can achieve those 
results.
    I have been very hard on schools and the use of money, hard 
on accountability, hard on the issues of performance and 
results for a number of years in this Congress. I would still 
have to tell you that unless we are prepared to dramatically 
increase the Title I contribution so that States can provide 
the resources to those schools most in need or as the President 
would say, the poorest children and the poorest schools, that 
simply will not happen and we will be back here after our 
reauthorization of ESEA this year 5 years from now looking at 
the same bowl of mush with respect to the performance of our 
children.
    I do not think that is what President Bush wants, I do not 
think that is what this Congress wants, my colleagues are not 
for that. We have spent too much time and the fact of the 
matter is that today we have an alignment on behalf of 
education that we have never had before. Education continues to 
top out the polls no matter what you match it up with. The 
American public wants a first- class education for its children 
and its grandchildren, and it wants these schools fixed. I 
believe we have the political will to do that, and we also now 
have the surpluses available to do this.
    When we were arguing about a ``Nation at Risk,'' we were 
$208 billion in the red. When President Clinton signed in Goals 
2000, I think we were $130 or $140 billion in the red. We were 
talking about deficits as far as the eye can see. That has all 
now changed. Now, not only do we have both the will but we now 
also have the wallet.
    Believe me, I know it is very popular in this town to say 
you cannot solve this problem by throwing money at it, but you 
cannot fix this problem without money. If you look at the 
poorest performing schools in this Nation, we need to recruit, 
retain and teach teachers in those schools. You are not going 
to do it without a new commitment of resources.
    If you look at the condition of those schools, you have to 
understand, these kids are going to school in many instances in 
absolutely unacceptable environments. We have to change that 
and help school districts. Districts are trying to do it but we 
have to take the Title I portion of this program and make it 
realistic in today's rules for the results that my two 
colleagues here have talked about. If we are going to demand 
those results, those resources have to be there.
    As I look at the outline of the President's submission of 
what we will see submitted in the future--I guess we do not 
have a formal budget but we have an outline--you are talking 
about doing this all for a new $1.6 billion. It is simply not 
going to happen. I think we ought to keep the faith with the 
public.
    I have introduced legislation that would spend $110 billion 
of new money over a period of 5 years. In exchange for those 
resources, we ought to be very hard nosed about the results we 
expect, about the accountability we expect and the actions we 
are prepared to take for those States that are not capable of 
doing that or those districts that won't or haven't done it.
    We should make no qualms about that. We should be very 
forceful in that manner. Otherwise, we are not going to get 
educational reform. George Bush, Sr. started America 2000, and 
Bill Clinton converted it into Goals 2000. We put out a couple 
of billion dollars to get the States to come up with world-
class standards, assessments and aligning them and to date, I 
think seven or eight States have started to comply with that. 
The rest have not done it.
    I do not think we should go easy on these people any 
longer. It is too easy for Members of Congress to suggest we 
are only 7 percent of the money. In those Title I schools, we 
are a heck of a lot more than 7 percent of the money. We are 
the key to whether or not those schools get turned around. We 
have to understand we have a right to ask for these kinds of 
results in return for that Federal investment to try to help 
the poorest children and the poorest performing schools.
    I would hope as you consider your budget resolution, you 
would immediately see the inadequacies on its face of the 
President's submission for the results that he is telling the 
Nation he wants and that we all share and that this Budget 
Committee would provide room in the budget so we can have real 
resources for real reform for real results for America's 
children.
    That is outlined in my prepared testimony, and I thank you 
for the opportunity, and I thank my colleagues here for letting 
me make that statement. I would be happy to answer any 
questions the members might have.
    [The prepared statement of Mr. Miller follows:]

Prepared Statement of Hon. George Miller, a Representative in Congress 
                      From the State of California

    Thank you, Mr. Chairman and members of the Committee. I appreciate 
the opportunity to share my views on strengthening our nation's 
schools.

                     ONCE-IN-A-LIFETIME OPPORTUNITV

    We now enjoy a once-in-a-lifetime opportunity to fundamentally 
improve public education in our nation.
    As someone who has served on the Education and the Workforce 
Committee for more than 26 years, I can tell you that the stars of 
public opinion, political will, and budget surpluses are aligned behind 
education in a way that they never have been before.
    We owe it to our children to seize this moment.

                ENCOURAGED BY BUSH EMPHASIS ON EDUCATION

    I have met with President Bush several times over the last few 
months. And I am deeply impressed his passion for ensuring that every 
child receives a high-quality education.
    I am particularly heartened by his commitment to close the 
achievement gap--between minority and poor children and their peers.
    The President says that we should have high standards for all 
students; that we should annually measure every students' progress 
toward meeting those standards; and that we should hold schools 
accountable when they fail to provide an adequate education.
    I could not agree more.

          IF WE EXPECT RESULTS, WE MUST PROVIDE THE RESOURCES

    But to achieve the results we all want, we must provide the 
necessary resources--quality teachers and training opportunities; small 
class sizes; modern classrooms; after-school and summer tutoring 
programs for extra help; and support services for troubled students.
    And we must target those resources to where they are most needed.
    Education reform without adequate resources is an empty promise.
    That's why Dale Kildee, other Members of Congress, and I have 
introduced legislation--The Excellence and Accountability in Education 
Act (HR 340)--to double Title I funding for low-income children, invest 
in teacher training and smaller classes, provide salary bonuses and 
loan forgiveness to address teacher shortages, and invest in real 
reform at failing schools.

              THE BUSH BUDGET FALLS FAR SHORT ON EDUCATION

    Unfortunately, the budget proposed by President Bush shortchanges 
education.
    It includes only $44.5 billion for the U.S. Department of Education 
for academies year 2001-02, a 6-percent increase--less than half of the 
13-percent average annual increases over the past 5 years.
    In his joint address to Congress, President Bush characterized 
education as his top priority and his tax cut as money ``left over.''
    But, in fact, the budget outline he has submitted puts tax cuts 
first. Instead of sitting at the table, our nation's schools are forced 
to wait around and fight for scraps.
    As President Bush and the congressional majority rush ahead with 
large tax cuts, the Administration has not proposed how it would spend 
two-thirds of Education's $44 billion budget.
    The President has not identified the $433 million in cuts he 
promised.
    And Congress has not agreed on an overall budget.
    Over the next decade, President Bush would spend 13 times more on 
tax cuts for the top 1 percent of taxpayers than on his education 
reform initiative.
    I am troubled and disappointed by these priorities.
    President Bush's budget includes only a $1.6 billion increase for 
elementary and secondary education, $7.2 billion less than my proposal 
authorizes.
    The additional $7.2 billion in the Miller-Kildee bill could mean 
1,600 more modernized schools; 16,000 more school counselors, 11,000 
more qualified teachers, and 150,000 more children in after-school 
academic enrichment programs.

              FEDERAL FUNDS SHOULD SUPPORT PUBLIC SCHOOLS

    Second, I am concerned that President Bush's plan for education 
turns to private school vouchers as the solution to our troubled public 
schools.
    Vouchers will help only a select few children; drain resources from 
the public schools that serve the large majority of children; and 
undermine accountability because private school students are not 
tested.
    The Bush budget also includes Education Savings Accounts, which are 
``backdoor vouchers'' that would effectively make private school 
tuition tax-deductible. ESAs would also overwhelmingly benefit upper-
income families. These resources would be better spent on strengthening 
our public schools.
    Third, I am concerned that President Bush would repeal our block-
grant proven education initiatives, including class-size reduction, 
school renovation, after-school, and safe and drug-free schools.
    Class Size and Teacher Quality. President Bush is proposing to 
consolidate the Class-Size Reduction and Eisenhower Professional 
Development program. This action in effect would create the largest 
categorical grant next to Title I. It may not be a bad idea in and of 
itself, and my sense is that in some form this idea could garner 
bipartisan support in both bodies.
    But the Bush proposal in its current form fails to provide enough 
funding to continue reducing class size and expand professional 
development and training for teachers. Class-size reduction is a proven 
approach to improving achievement and teaching reading, especially for 
low-income children in early grades. But only if it is coupled with 
high standards for teachers and with quality teacher training. I hope 
we can reach an agreement that has all these elements: flexibility, 
accountability, and major new investment.
    School Renovation. I think it would be a huge mistake if we were to 
adopt President Bush's plan to eliminate the School Renovation 
initiative we enacted only last year.
    We face a serious, well-documented crisis in the condition of our 
public schools, which need $127 billion in repairs.
    But President Bush would redirect funds Congress has already 
appropriated for renovation to other needs, delaying resources from 
reaching schools and pitting schools' needs against each other.
    After-School Programs. President Bush would consolidate the 21st 
Century Community Learning Centers and Safe and Drug-Free Schools 
programs. 21st Century centers provide a safe, healthy place for 
academic and artistic enrichment during the sometimes-dangerous after-
school hours. Congress has recognized the success of this initiative by 
increasing its funding by over 2,000 percent over the past 4 years to 
$846 million. Consolidating it would put the future of this young, 
promising initiative at risk.
    Straight A's/Charter States. Finally, the Bush proposal includes 
the ``Straight-As'' block grant that abandons the national commitment 
to help our country's most disadvantaged public schools. The proposal 
would allow states to slash funding for poor schools in favor of 
affluent ones. It would allow states to take funds appropriated 
specifically for students with specific needs and instead use them for 
the general student population. It would allow states to convert part 
or all of Federal aid into private school vouchers, decimating public 
schools. And it would repeat the mistakes of the past, when block 
grants failed because they lacked the focus to stimulate real reform, 
accountability for results, or political support.
    Higher Education. Finally, I would like to briefly note my 
remaining reservations with the President's budget. Although college-
qualified, low-income high school graduates are still kept out of 
college by financial barriers, his budget includes an increase for Pell 
grants that will likely fall short of last year's $450 increase. The 
limited resources in the Bush budget will make it difficult to 
substantially increase funding for special education, as President Bush 
promised to do during his campaign. And historically black and 
Hispanic-serving colleges would receive a much smaller increase than 
they have seen for the past 3 years.
    Of course, the President's proposals are only a starting point for 
congressional action. Together, we can build on its strengths and 
remedy its shortcomings. I hope we will invest more in our public 
schools; reject the false promise of vouchers and unaccountable block 
grants; and, continue proven approaches to strengthening our schools.
    I would be pleased to answer any questions you may have.

    Chairman Nussle. Thank you.
    Mr. Spratt.
    Mr. Spratt. Mr. Miller, before you came there was testimony 
from Mr. Finn to the effect that Title I really has not 
succeeded, we haven't closed the performance gap. I suppose 
that may beg the question as to whether or not the performance 
gap might be wider if it were not for Title I, but what is your 
observation, what is your perspective on Title I? Has it played 
an important role, has it achieved success?
    Mr. Miller. We have had some successes. They certainly are 
not what we would like. It certainly has not accomplished what 
it should have. Clearly, it should have accomplished more.
    As Mr. Finn said, when we started we were sort of into 
serious micromanaging. We used to have what we called 
radioactive dollars which followed the child everywhere and you 
had to find out where they went and spend them only on those 
children. Since 1994, we have expanded school-wide programs and 
schools that can participate and trying to let people use their 
creativity recognizing children on the edge of poverty 
sometimes are in the same school, they may not qualify 
specifically for that program but can benefit from that.
    We still have not demanded the results. Secretary Riley 
talked about every child, we should have high expectations for 
every child and we have to have world-class standards. I 
suggest to you that in this business, if you can dodge a 
bullet, they try to dodge the bullet. The districts have not 
been terribly high on accountability for the most part, the 
States have not been terribly high.
    When I got into the fight over Edflex, Governor Bush was 
one of the few governors who was really prepared to hold 
himself accountable on desegregated data so we could really 
tell what the gap was in the States. Most governors did not 
want to go near the notion of being held accountable for every 
poor child or every minority child, the majority child and what 
that gap is.
    I think that you can argue this has certainly been less 
than a great success and the children who were targeted in this 
program have been shortchanged. I think they have been 
shortchanged financially but they have also been shortchanged 
on educational policy and demanding results.
    That is what this reauthorization and this President is 
speaking to. That is what accountability is about and standards 
and testing is about as I think my two colleagues testified.
    Mr. Spratt. Mr. Finn, would you agree that one objective of 
Federal education policy should be to close the gap, to reduce 
the disparity in performance by whatever means but with the 
assistance of Federal funds?
    Mr. Finn. I think this is an honorable and necessary 
national purpose and I think the Federal Government has a 
legitimate role in trying to make it happen. What grips me is 
36 years of noble intentions and mighty little to show for it.
    Mr. Spratt. Ms. Keegan, did I hear you say Title I is 
producing results in Arizona? Are you using the program to good 
effect?
    Ms. Keegan. We use it, yes, and I would say there are 
spotty results in Title I. Arizona overall is demanding now 
annual assessments with children. We demand that all schools 
are improving and coming up to standard, so yes, we are 
improving. I think that model would work well overall for all 
kids who are in Title I.
    Mr. Spratt. Do you think it has worked better since we have 
loosened the availability for having Title I schools as opposed 
to Title I programs within schools?
    Ms. Keegan. Not necessarily. I have a different view about 
that. I think this money ought to accrue to the benefit of a 
student wherever that student is.
    Mr. Spratt. Do you think we diluted the program in making 
it available to too many schools as opposed to those that 
really had dramatic problems?
    Ms. Keegan. Frankly, at times, but people would argue that 
my preferred choice of going right down to the student level is 
huge dilution. That is the amount of money that child carries 
with him or her, so there is a philosophical concern on my 
part. In Arizona, they move quite a bit, and choice is a 
component of our system more so than others. So if these 
students knew of a great program, particularly in the inner 
city this happens quite often where there is a great program 
being offered in a compensatory way by a particular social 
service agency, they could all congregate to that program and 
that program would not be diluted because the money would be 
portable for those kids.
    So it depends on the State, Congressman. I do believe in 
the maximum amount of flexibility for the use of these dollars 
but as Congressman Miller has said, I don't think there is any 
need to apologize for an insistence on results.
    Mr. Spratt. Could I ask you this about IDEA? If we were to 
take the radical step of simply repealing IDEA, what would 
happen in Arizona? Would you maintain the same level of effort 
for special education children, would your constitution in the 
State of Arizona still require you to provide them an equal 
education?
    Ms. Keegan. Absolutely. We are dedicated to these children 
and one of the most important things that has happened has been 
the standards and assessment movement. We would continue to see 
to the best education possible for these students.
    Frankly, I don't think that is ever going to happen. The 
requirements of that program should be focused just on academic 
and other needs of these kids. I would never advocate for the 
elimination of IDEA. I think its full funding is a necessary 
goal. I would love to see it but I also think an elimination or 
a serious study about some of the regulation that comes along 
with IDEA is in order.
    Mr. Spratt. I am not proposing elimination, but frequently 
the argument here is even if we went to that step, the States 
would still be saddled with the obligation by their own 
constitutions in many cases to provide an equal education and 
probably to spend virtually as much as you are spending right 
now.
    Ms. Keegan. I would say these are not children we intend to 
leave behind. They are expensive children, but I do think there 
are some dollars being spent away from children because of 
current regulation.
    Chairman Nussle. Mr. Miller, as I said in my introduction, 
there is not anyone in the Congress who is a stronger advocate 
for education. I certainly respect and appreciate that.
    We have had some successes I think. I guess I am interested 
on your take on over the last 5 years we have had an average of 
13 percent annual increase in education. I am sure if you and I 
sat down and made a list, we would probably think of a few 
things in addition that we could add a few more dollars for or 
priorities that maybe went unmet.
    I guess the thing I am wondering about is if we are 
spending 13 percent for the last 5 years on average and are 
still not getting the results we need to get--we both agree we 
are not getting those results--what should we have been doing 
those last 5 years that could have achieved those results?
    I respect the fact you come to the Budget Committee today 
and say, what the President put forward is not enough. If you 
had heard my questioning of the Secretary, particularly in the 
area of special education, I think you would have heard that 
not only from me, but a number of members of the panel, that 
there was some concern about that program. If 13 percent is not 
enough, what is enough?
    Mr. Miller. I think the difference is you now have an 
opportunity with the reauthorization going on at the same time 
of the Elementary and Secondary Education Act, including Title 
I, that we can for the first time to put in real rules of 
accountability in exchange for this money. That is the real 
difference.
    I do not think it is fair if you are going to test kids, 
that they do not have an opportunity to learn what is going to 
be on the test or what is covered by the standard. If we have 
these world-class standards, then we have to have a curriculum 
that is aligned and we have to have teachers capable of 
delivering it.
    In many instances in the Title I schools, that simply does 
not happen. Title I is given credit for cutting the achievement 
gap in over half of the time it has been in existence. People 
argue about that but you could argue things would be much worse 
in poor, minority schools without what we have done in the 
past. That is not good enough. We still see this gap. We want 
to improve it.
    The question is, in the private sector when you turn around 
a business, very often you have to make an investment. When the 
Edison Schools are talking about going into New York, they are 
talking about putting in an up front investment of $2 million 
per school; in California, half a million per school. We are 
talking about intensive training during the summer to get 
teachers ready for the Edison method of doing this.
    You can agree or disagree with whether Edison makes sense 
or not or whether it is good or bad, but the fact is they are 
recognizing this kind of investment. We do not have a number 
for the Defense Department because they are going through a 
review asking the question, ``What do we need to do the 
mission?'' I think we have to ask the same question on behalf 
of America's children. What do we need to do this mission? If 
we are going to make that commitment of resources, then under 
what conditions should that commitment be made? That is what I 
think is different about now as opposed to the last several 
years because we really did not ask the second half of that 
question about results and accountability. If we were not going 
to get that, I am not for more money.
    Chairman Nussle. The concern I have, we have 39 Federal 
agencies that are administering 760 education programs; we have 
100 K-12 programs in the Department of Education alone; and 
that is not enough?
    Mr. Miller. It is not a question of whether it is enough; 
the question is whether they are high quality. Mr. Nussle, you 
know when you say 700-and-some programs, you're talking about 
the Forestry Service that has education programs for rangers on 
how to do watershed management.
    Chairman Nussle. All right, so 759.
    Mr. Miller. It doesn't have much to do with public 
education in terms of the public school system and what we do, 
and this legislation.
    Chairman Nussle. Let us just take the 100 K-12.
    Mr. Miller. That is why you have actively on both sides of 
the aisle, the administration and the Congress, discussions of 
consolidation of those programs. That is, in all likelihood, 
going to happen on a bipartisan basis in this markup. Those are 
the kinds of changes that people are looking at, looking at the 
results we want in measuring the districts and whether or not 
they are getting that result, and whether we are making 
progress with the children. You are not going to do it without 
the resources to change the structure of this system and get 
people qualified and credentialed.
    Chairman Nussle. Let me ask you, Mr. Finn, we have 5 years 
of about 13 percent increases. Unfortunately, the philosophical 
discussion and the actual technical, practical discussion of 
what goes on in the classroom is fine for another day, we have 
to write the budget. What percentage do we put in? Did we get 
13 percent worth of results, did we see a 13 percent decrease 
in the achievement gap every year that we have put that 13 
percent in? Why haven't we seen the results for the kind of 
huge cash outlays that we have been putting into these 
education programs?
    Mr. Finn. Because in many cases, you have been putting 
additional funds into programs that are ineffective and do not 
produce results. In some cases, you are putting increases into 
programs that simply redistribute resources, such as the Pell 
grant program.
    In other cases, you are putting money into little programs 
that have been around for decades that do nothing good but they 
keep getting more money. I could cite the Regional Educational 
Laboratories, for example. They are eating up $60 to $100 
million a year for nothing in terms of the goals we are talking 
about here today.
    A serious round of program consolidation that doesn't get 
undone by earmarks, set-asides and things like that would make 
a very big difference. I think my difference with Congressman 
Miller, if I have one, is the chicken-and- egg issue. I see a 
strong possibility that additional money will be out there but 
the results still won't be because the programs still won't be 
different from the way they have been these 36 failed years. 
That is my nervousness about the larger budget increases that 
he is recommending.
    Chairman Nussle. Superintendent Keegan, I am very intrigued 
by your IDEA comments, both from your practical and 
professional standpoint as well as your personal standpoint. Do 
you have any general advice for us from a budgetary standpoint 
on IDEA? The Secretary mentioned today that they were going to 
try some flexibility within IDEA, possibly also looking at some 
reformation of the definitions, labels, categories, things like 
that which tend to try and pigeonhole kids and put a label on 
so that we can follow them around and understand or think we 
understand what the label means.
    Do you have any advice for us as we go down this road with 
IDEA?
    Ms. Keegan. Mr. Chairman, we actually spend a lot of time 
on this in Arizona. Our identification rate in Arizona is just 
about 9 or 10 percent, a little bit below the national average. 
I do think the Secretary's comments about intensive reading 
programs for all kids across the board are important in 
speaking about kids who are being identified with a general 
and, what we call, soft learning disability. That oftentimes is 
a reading disability.
    However, the children that are in categories, if you will--
in Arizona, we are carrying about 13 categories, so it isn't 
just you all. This is driven by people with serious concerns 
about their children. Our family carries a genetic mutation for 
fragile X which is the single largest reason for inherited 
mental retardation. Several of my nephews are heavily impacted 
by this and they are in the public school system. They go 
through this every day.
    I will tell you, it is fascinating to be in charge of the 
Special Education Department in Arizona and then see it on the 
ground with your children. What is interesting to me is that 
the assessment of these children has been critical because so 
often we see measurement as punitive, and literally parents are 
counseled out of measuring their children because that will be 
too stressful for them, but then what happens is there are no 
stated goals and there is no achievement acknowledged. Nobody 
knows where these children are, and they have far more capacity 
in most cases than we give them credit for, as you probably 
well know.
    So that is a difficulty for me. We have a lot of 
philosophical opposition to measurement as punitive on children 
that I think we need to get over. The group of parents that we 
brought together in Arizona was very interested in portability 
of special education funding. Parents know where the good 
programs are. They will get themselves into programs that work. 
I think we should acknowledge and congratulate that by making 
more special education dollars portable with kids so parents 
could make the selection.
    It is very heavily regulated, the districts are usually 
always in charge of where the child services will be. I think 
that is unfortunate. Parents do know. Parents of disabled kids 
are highly involved, for the most part, with their children's 
education. They have good support groups. So we look to just 
give them the maximal amount of choices. If you can do that 
with the IDEA funds as well, I think it is of benefit to the 
kids.
    Again, I would do that only with--assessments will be 
different for kids with special needs, but there ought to be a 
stated requirement that whatever assessments are possible need 
to follow these kids as well. These kids are entitled to 
assessment. They should not be kept from high expectation.
    Chairman Nussle. Thank you.
    Mr. Spratt.
    Mr. Spratt. One final question. You said you were sure if 
you and George Miller sat down and developed a list, it would 
be a long list of ideas. I think Mr. Miller already has his 
list drawn. I thought I would give you a chance, George, to 
just lay out what you are proposing, particularly for 
elementary and secondary education.
    Mr. Miller. We really know now there is a set of 
circumstances that are most conducive to a child receiving a 
good education. Obviously, I believe it is teacher centered, 
that you have to have a highly qualified, well qualified 
teacher. I am not talking about certification because sometimes 
you get certification and you don't have the qualifications to 
teach.
    I think we have to be rigorous about having teachers who 
have subject matter comprehension, have a major or minor in 
that field or a rigorous State exam in that field before we 
think that they can teach.
    I think you also have to have a decent setting. There 
continues to be evidence suggesting that small class sizes, 
maybe especially among poor and minority is helpful, but it is 
not terribly helpful without a qualified teacher. The small 
class size in and of itself doesn't give you the kind of 
benefit you would want for the cost to do that.
    If you could reduce that class size and put a well 
qualified teacher in that position, then you have to have 
curriculum that works. One of the things maybe some day we will 
get to is the fact there is a lot of junk curriculum out there. 
There is a lot of pop art, if you will, about what to sell 
schools and school districts, but if you have that, you have a 
chance that child is going to succeed.
    As we follow these children, we see where children are 
continuously exposed to high quality teachers of good 
competence, that these children advance. If they come from the 
inner city or from the suburbs, they tend to learn like each 
other. There is not this great, expected disparity.
    That is not to say that all children will succeed, but far 
more of them will succeed than we are willing to accept today. 
I think those are the key components. So those schools have got 
to have resources to bring about that kind of change. We have 
thousands and thousands of classrooms where we have unqualified 
teachers, we have a shortage of teachers for a whole host of 
reasons, and we have to be able to pay them, train them and put 
them in a decent atmosphere. You are going to need additional 
resources to truly get that done if you are going to do it in 
every school.
    I could do it in selected schools within a school district. 
I am in the process of doing it in one very small elementary 
school in my district today. But if I do it across 15 or 18 
schools that need it, there is not the money to do that. I 
suggest we make that kind of investment. I think we have to 
double the Title I appropriation. I think we have to greatly 
increase the amount of money both for class size reduction and 
for professional development of teachers; those two things go 
hand-in-hand.
    I think we have to fully fund IDEA. If we just stay 
current, it is going to cost you a couple of hundred million 
but to go to full funding is about $17 billion. So we are 
talking about real money, but it is very clear the school 
districts are moving money around, trying to accommodate the 
demands of IDEA.
    Obviously we are all willing to look at changes in IDEA, 
but these are real, new dollars that have to take place for the 
reform. I don't know why when at this moment more and more 
people are putting value on education, when more people 
recognize that the education of their child or grandchild will 
have far more to do with their chance of success in this 
country than race, gender, or ethnicity. It is going to be 
about your education if you are going to participate in 
American society.
    We don't ask what is it we need to get the job done. This 
committee may have a difference of opinion from me, but we have 
to start from there. I think we have to start talking about 
fully funding Title I. There is not a lot of point in taking 
full funding in Head Start and then dumping them into a lot of 
bad schools a couple of years later. You are not going to get a 
return on your investment. There are a lot of studies that show 
that is what happens, you don't get that return.
    We have to talk about fully funding quality teachers. 
Unfortunately, today in too many locations, people make a 
simple, logical economic decision not to teach. That has to 
change. Certainly for Title I schools, we ought to be doing all 
we can to enhance that opportunity.
    Chairman Nussle. I think we will let you have the last word 
on this, George.
    Congressman Miller, Mr. Finn, Ms. Keegan, thank you very 
much for your testimony.
    This hearing is adjourned.
    [Whereupon, at 4:35 p.m., the committee was recessed, to 
reconvene at 1 p.m. the next day, Wednesday, March 14, 2001.]

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