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[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]

            DEPARTMENT OF EDUCATION FISCAL YEAR 2011 BUDGET

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, FEBRUARY 25, 2010

                               __________

                           Serial No. 111-23

                               __________

           Printed for the use of the Committee on the Budget

                       Available on the Internet:
       http://www.gpoaccess.gov/congress/house/budget/index.html

                               ______

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                        COMMITTEE ON THE BUDGET

             JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania    PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio                     Ranking Minority Member
XAVIER BECERRA, California           JEB HENSARLING, Texas
LLOYD DOGGETT, Texas                 SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon              MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas               MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida                  PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts     CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts          JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina        JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota            CYNTHIA M. LUMMIS, Wyoming
CHARLIE MELANCON, Louisiana          STEVE AUSTRIA, Ohio
JOHN A. YARMUTH, Kentucky            ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey        DEVIN NUNES, California
ROSA L. DeLAURO, Connecticut,        GREGG HARPER, Mississippi
CHET EDWARDS, Texas                  ROBERT E. LATTA, Ohio
ROBERT C. ``BOBBY'' SCOTT, Virginia
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon

                           Professional Staff

            Thomas S. Kahn, Staff Director and Chief Counsel
                 Austin Smythe, Minority Staff Director

                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, February 25, 2010................     1

Statement of:
    Hon. John M. Spratt, Jr., Chairman, House Committee on the 
      Budget.....................................................     1
    Hon. Jeb Hensarling, a Representative in Congress from the 
      State of Texas.............................................     2
    Hon. Arne Duncan, Secretary, U.S. Department of Education....     5
        Prepared statement of....................................     9
        Responses to questions for the record....................    51

Questions for the record:
    Hon. Allen Boyd, a Representative in Congress from the State 
      of Florida.................................................    51
    Hon. James P. McGovern, a Representative in Congress from the 
      State of Massachusetts.....................................    51
    Hon. James R. Langevin, a Representative in Congress from the 
      State of Rhode Island......................................    52
    Hon. Paul Ryan, Ranking Minority Member, Committee on the 
      Budget.....................................................    54
    Hon. Connie Mack, a Representative in Congress from the State 
      of Florida.................................................    56
    Hon. Robert B. Aderholt, a Representative in Congress from 
      the State of Alabama.......................................    58

 
                        DEPARTMENT OF EDUCATION
                        FISCAL YEAR 2011 BUDGET

                              ----------                              

                      THURSDAY, FEBRUARY 25, 2010

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:08 a.m., in room 
210, Cannon House Office Building, Hon. John Spratt [chairman 
of the committee] presiding.
    Present: Representatives Spratt, Schwartz, Doggett, Boyd, 
Etheridge, McCollum, Yarmuth, DeLauro, Scott, Larsen, Moore, 
Connolly, Schrader, Hensarling, Garrett, Diaz-Balart, Jordan, 
Lummis, and Latta.
    Chairman Spratt. Let me call the hearing to order and 
welcome Secretary of Education Arne Duncan back to the Budget 
Committee.
    Mr. Secretary, last year you arrived in Washington with the 
new administration, and you hit the ground running. The 
Department of Education received a huge amount of funding 
through the American Recovery and Reinvestment Act used to 
bolster State education efforts and college affordability.
    We were pleased to hear from you last March when you 
testified about the President's budget, and we look forward 
today to hearing more about this year's budget, as well as how 
the Recovery Act funds are working throughout the country and 
making a difference.
    We have seen that President Obama's 2011 budget continues 
to focus on what works in Federal education policy: what works 
to ensure that American children graduate from high school 
ready for a career and ready for college, and what works in 
terms of what they can afford to pay to go to college, if that 
is what they want.
    The administration's budget proposes to increase Federal 
aid to education funding by $3.5 billion, primarily for a 
variety of new elementary and secondary education initiatives 
that focus on innovative strategies to improve teaching and 
learning. The budget proposes several new competitive grants 
and also proposes to consolidate a number of existing programs 
in line with the administration's reauthorization proposal for 
the Elementary and Secondary Education Act, which we understand 
you will send to Congress sometime this year.
    The President's education budget also contains higher 
education reform proposals similar to those in his last budget, 
many of which are reflected in the Student Aid and Fiscal 
Responsibility Act, a bill that the House passed last fall.
    Even though we passed that bill and even though we have 
passed other things that you will be presenting today, I think 
you will be fielding questions from many of us about exactly 
how these particular programs will play out because we still 
have questions and concerns about, for example, the 
consolidation of numerous grant programs into one particular 
block grant. All of those who have the least popular, the least 
compelling interest stakes in the education budget are calling 
us to say, ``If this happens, we will get wiped out.'' And we 
are hearing from those who administer the Perkins program, who 
are saying to us, ``Why fix it if it ain't broke?'' We would 
like to discuss that with you later today after you have 
delivered your testimony.
    As I was saying, we may agree or not agree on every 
proposal or provision, but I believe everyone in this room 
shares the same goals of ensuring that students graduate from 
high school with the skills they need to go on to college or 
enter the workforce and that college, if they choose, is 
accessible and affordable for all.
    I look forward to hearing from you today about the 
administration's proposals to improve teaching and learning. 
And I am pleased that we have the opportunity to ask you 
questions about those broad subject areas.
    But, first, before turning to you and your statement, let 
me turn to Mr. Hensarling, who is substituting for Mr. Ryan 
this morning, the committee's ranking member, for any statement 
Mr. Hensarling may make. And then we will hear from Secretary 
Duncan, who is our only witness today.
    Mr. Hensarling?
    Mr. Hensarling. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. It is good to see you again. And, 
frankly, there are a number of initiatives that I believe under 
your leadership have been started that certainly are 
meritorious. I applaud your attempts to try to consolidate 
certain programs to try to make them more efficient. I am 
interested in learning more about some of your initiatives to 
ensure that we focus on the outcomes of education and not 
simply on the inputs of education.
    Having said all of that, I am somewhat fearful that all 
your efforts may be to no avail unless this President and this 
Congress do something about the spending crisis and immediately 
do something about the lack of jobs.
    Recently I was in my district. I have the honor of 
representing the Fifth Congressional District of Texas. Visited 
one of my community colleges, Trinity Valley Community College 
in Athens, Texas. Spoke to the president. I was interested to 
find out that enrollment is up mainly because a lot of kids 
can't find work.
    It is a reminder that the number-one job ought to be jobs. 
People still can't find jobs. And so, most Americans are still 
concerned and they are still asking the question, ``Where are 
the jobs?''
    And so, here we are, a year later, a year after the 
stimulus program, where unemployment was not supposed to exceed 
8 percent, where theoretically we were told by the President 
3.5 million jobs would be either created or saved, and instead 
we are still mired in almost double-digit unemployment, the 
highest in a generation. With one exception, we have lost jobs 
each and every month.
    And my guess is most people who go to college eventually 
expect to have a job. And we are not seeing the policies out of 
this administration or this Congress that are doing anything 
for this generation, much less the next generation, of students 
to ultimately have jobs.
    And one of the major factors that is inhibiting job 
creation--and Chairman Bernanke yesterday, under testimony in 
the Financial Services Committee, said this--that people are 
concerned about, how is this debt, how is this deficit going to 
be paid for? I don't have his exact quote in front of me, but 
he said not only is it critical for the long-term fiscal health 
and survival of our republic, but that it would have a 
beneficial impact on job creation to have Congress and the 
President lay out a plan to deal with this debt and this 
deficit.
    Do we have the debt slide, please?
    And so this was testimony by the chairman of the Federal 
Reserve. I mean, we can't and we shouldn't keep this secret 
from the American people. This is, indeed, a spending crisis 
that is taking place. We have had our own CBO director testify, 
quote, ``In sum, the outlook for the Federal budget is bleak.'' 
Quote, ``U.S. fiscal policy is on an unsustainable path to an 
extent that cannot be solved by minor tinkering.''
    People in our economy--small businesses, entrepreneurs, 
investors--are not creating jobs because they know that, 
without spending discipline, without a plan from the Congress 
and the President, this is going to have a very unhappy ending, 
with either massive tax increases that absolutely crush job 
creation, monetization of the debt, hyper inflation to where, 
as a society, we will longingly and nostalgically upon the 
Carter era. And because of that, they are not starting jobs, 
they are not creating new jobs.
    There is a famous quote from our former Comptroller General 
Walker, who talks about how the rising cost of government 
entitlements are, quote, ``a fiscal cancer that threatens 
catastrophic consequences for our country and could bankrupt 
America.'' Which then begs the question, then why is the 
President creating four new mandatory education programs in his 
budget and the expansion of two existing ones?
    The President continues to talk about, you know, ``I have 
inherited a mess.'' Well, you know, as far as that goes, he is 
right, he did inherit a mess. We can question who he inherited 
it from, since the previous 2 years a Democratic Congress was 
in control, and he was part of that Congress. But a more 
salient question is, is he making it worse?
    His own OMB director, Dr. Orszag, has admitted that the 
budget that they have proposed is unsustainable, that you 
cannot have a deficit-to-GDP ratio exceeding 3 percent, that 
that is unsustainable. Yet, every year, they present an 
unsustainable budget.
    You know, at some point, you have to ask, how does this 
mountain of debt on future generations not only impact job 
creation, or, more accurately, the lack of it today, but how is 
it going to impact educational opportunities in the future? 
That is the crisis that we have to be speaking about.
    I mean, the President, from fiscal year 2010 levels, is 
proposing to add $9.275 trillion to the debt held by the 
public--$9.27 trillion.
    Now, I am a graduate of Texas A&M University in College 
Station, Texas. Today, the average tuition is $20,531. We have 
45,000 students. I tried to do a back-of-the-envelope 
calculation. And with the debt that the President is proposing, 
we could fund every student at Texas A&M for 9,851 years.
    Clearly, clearly, this mountain of debt is going to come 
out of the educational opportunities of the next generation. If 
we don't deal with that chart right there, with all due 
respect, Mr. Secretary, a lot of this policy is merely 
rearranging the deck chairs on the fiscal Titanic.
    And so I am interested to find out what you are doing 
today, but I am more interested in finding out, as a 
representative of this administration, what is this 
administration going to do to stem this tide of red ink?
    And I must admit, I know the President is sincere when he 
says he wants to do something about it, but he hasn't. There is 
no plan. By his own admission, by the admission of his 
Secretary of Treasury, by the admission of his director of 
Office of Management and Budget, they have not put forth a 
plan, ultimately, that takes care of this.
    What have we been presented? We have been presented with a, 
quote/unquote, ``nondefense discretionary freeze.'' Well, one 
of the reasons they achieve that freeze is because they take 
some educational discretionary programs and turn them into 
mandatory. I mean, that is the kind of sleight of hand that the 
American people have been outraged about.
    And even using the President's own math--can we have that 
chart on the discretionary freeze?
    One, he delays the freeze for a year, he turns on the 
freeze for 3 years, and then he turns it off. And if I recall 
right, in doing the math, ultimately what the President is 
proposing is that spending increase over the next 10 years, 
49.01 percent as opposed to 49.27. With all due respect to the 
administration, that achieves next to nothing.
    And I know that the President has articulated a commitment 
to PAYGO. But then why do we have these new mandatory programs? 
What is offsetting the new mandatory programs if the President 
is committed to PAYGO? I don't understand it.
    So, again, Mr. Secretary, I am interested in the work that 
you are doing, some of which I have come to admire. But, at the 
end of the day, unless the administration is ready to deal with 
that sea of red ink, you are condemning future generations to a 
future without educational opportunities.
    I yield back the balance of my time.
    Chairman Spratt. The gentleman yields back.
    Before proceeding, let me ask unanimous consent that any 
Members who care to submit an opening statement may do so at 
this point in the record.
    In addition, let me say to the witness, Secretary Duncan, 
that we have received your full statement and will make it part 
of the record so that you can summarize it as you see fit. But 
you are the only witness today, and so we also would also 
invite you to be thorough and complete in your presentation.
    We are glad to have you. We look forward to your testimony, 
and we appreciate you coming.

 STATEMENT OF THE HON. ARNE DUNCAN, SECRETARY, U.S. DEPARTMENT 
OF EDUCATION; ACCOMPANIED BY THOMAS P. SKELLY, DIRECTOR OF THE 
          BUDGET SERVICE, U.S. DEPARTMENT OF EDUCATION

    Secretary Duncan. Thank you so much, Mr. Chairman, for the 
opportunity to speak with you today, and thanks for your 
leadership. Thanks for your extraordinary commitment to 
education.
    Over the past year, the Obama administration has worked 
closely with Congress and stakeholders across America to shape 
an education agenda built on a few core concepts.
    First of all, we want high State standards that truly 
prepare our children for college and careers in a competitive 
global economy. As you know, 48 States, 48 Governors, and 48 
State school chief officers are all working together now 
towards that goal, not because of a Federal mandate, but 
because of their shared belief that high expectations lead to 
high student achievement.
    Second, we want to reward excellence, to encourage State 
and local educators to challenge themselves and hold themselves 
accountable. To compete in the global economy, we must be 
willing to compete with our own ideas and initiatives, funding 
what works, challenging conventional wisdom, and moving outside 
of our comfort zones. As the Race to the Top program shows, 
States are already rising to the challenge.
    Finally, we want to narrowly define the Federal role, to 
give local educators maximum flexibility where it makes the 
most sense and give parents and taxpayers maximum 
accountability where that is most needed. We need to strike the 
right balance between flexibility and accountability, offering 
support but not prescriptions.
    These three concepts--high standards; rewarding excellence; 
and a smarter, targeted Federal role in driving education 
reform--define our agenda.
    However, all of our work has been framed by the unique 
challenges school systems face due to our economic 
circumstances. A year ago, a report was released by the 
University of Washington indicating that 600,000 education jobs 
around the country were at risk due to State and local budget 
shortfalls resulting from the recession. Thanks to the 
leadership, courage, and foresight of Congress and the 
President, the Recovery Act rescued the American educational 
system from a near catastrophe.
    Your commitment of nearly $100 billion helped protect 
approximately 400,000 jobs at the State and local level, three 
quarters of which were in education. Today, because of you, 
hundreds of thousands of teachers are teaching, millions of 
children are learning, and tens of thousands of school 
personnel are working in schools and classrooms in every State 
in America.
    I am deeply concerned, however, that the crisis we avoided 
last year will arrive this year. I spoke with many Governors 
over this past weekend from both parties, and they are very 
concerned about pending education cuts. I hope we can help to 
alleviate those concerns.
    I would now like to talk about our proposed 2011 education 
budget.
    As you know, while most Federal spending is frozen, 
President Obama is proposing a historic increase in education 
funding. He understands that education is the key to our 
economic security, and, even in these challenging times, he 
remains deeply committed to this issue. The President is 
requesting a 7.5 percent increase in discretionary spending, 
from $46.2 billion to $49.7 billion.
    A share of our budget depends upon passage of the Student 
Aid and Fiscal Responsibility Act, SAFRA, which shifts billions 
in bank subsidies to early learning and to higher education. It 
has passed the House and awaits consideration by the Senate.
    It supports our cradle-to-career agenda, which includes a 
$9.3 billion commitment to early learning over the next decade 
to boost the quality of pre-K programs. We will also continue 
supporting the IDEA Preschool and Infants and Families Grants. 
The administration has also made early learning a priority in 
several competitive grant programs. And we are working closely 
with the Department of Health and Human Services to coordinate 
with Head Start and other programs serving preschool children.
    Moving to elementary and high school, our budget and our 
reauthorization proposal will be focused on six core areas of 
reform. We begin with students. ``College- and Career-Ready 
Students'' is our new proposed name for the Title I formula 
grant program, which we will continue to strongly support. The 
Title I program will also receive substantial Recovery Act 
dollars next year.
    We also propose increasing funding for school turnarounds 
from $546 million to $900 million so we can continue to help 
the students who are the furthest behind and increase our 
Nation's focus on the bottom 5 percent of America's schools.
    Second, because students need a well-rounded education--
this is something I heard in State after State as I traveled 
the country this past year--we have proposed a $100 million 
increase for learning programs beyond the tested subjects like 
reading, writing, math, and science--such as technology, the 
arts, languages, history, physical education, and other 
subjects. All told, we will invest $1 billion next year to 
promote a well-rounded education.
    Third, student supports are needed to ensure the proper 
learning environment. Our budget proposes a $245 million 
increase over 2010, for a total of $1.8 billion, to improve 
school climate, student health, and school safety. This 
includes continued support for the 21st Century Community 
Learning Centers Program. We also want to work with Congress to 
refine this program so it lifts student outcomes and 
incorporates enrichment activities through community 
partnerships.
    We are also proposing a major investment in a new program 
modeled on the Harlem Children's Zone. It is called Promise 
Neighborhoods, and it seeks to transform whole communities, 
with schools as neighborhood anchors. It provides wraparound 
social services from birth through college to students and 
families at risk.
    The fourth area of reform we are calling ``diverse 
learners.'' This includes students with disabilities, who will 
benefit from a requested $250 million boost to the IDEA formula 
grant program. Like Title I, IDEA will also continue to receive 
substantial Recovery Act dollars this upcoming school year.
    Other diverse learning populations include English language 
learners, which will get a $50 million boost under our 
proposal. And we are maintaining dedicated funding for migrant 
students, homeless students, and Native American students.
    The fifth area of reform is called ``teachers and 
leaders.'' No one--no one--is more essential to educational 
success than the person in front of the class and the person 
who is running the school building. This proposed budget 
provides $3.9 billion, a $350 million increase, to elevate the 
teaching profession and get effective teachers and leaders into 
the schools that need them the most.
    We are also requesting a large investment in teacher and 
principal leadership programs so States and districts can 
recruit and train the very best people possible that they can 
find. One of the things I think we have historically 
dramatically underinvested in is principal leadership. 
Leadership matters tremendously in education, as it does in 
every other field, and we are asking for a five-fold increase 
in funding for principals.
    We will also further support nontraditional pathways into 
teaching so people from all walks of life can bring their 
experience and knowledge into the classroom. And our budget 
invests in programs to reward educators for raising achievement 
and working in hard-to-staff schools and subjects. We encourage 
performance pay that rewards entire schools for progress--not 
just teachers, but all adults, from cafeteria workers to school 
clerks. However, under our regulations, States, districts, and 
schools will have the flexibility to design compensation 
programs that work best for them.
    And we are interested not so much in absolute test scores 
but in growth and gain: How much are students improving each 
year? And what are we doing to dramatically reduce dropout 
rates that continue to plague us around the country?
    The final area of reform falls under the category of 
innovation. We are proposing almost $2.5 billion to increase 
high quality charter and magnet schools and to continue the 
Race to the Top and the Investing in Innovation programs.
    With so many children at risk of failure, America cannot 
accept the status quo. More than one in four students drops out 
of high school. Many of those who do actually graduate and go 
on to college need remedial education; they are actually not 
prepared for college-level work. And too many of them drop out 
because of that lack of preparation.
    We must constantly embrace new approaches to learning and 
expand proven models of success. We must hold everyone 
accountable for results, and we must aim higher.
    I know there have been some concerns about the 
administration's embrace of competitive funding, so let me 
address this issue head-on. Major formula programs like Title I 
and IDEA are absolutely untouched. They will remain formula-
driven as long as we are here. Programs serving special 
populations such as English language learners, migrants, 
homeless, and rural students are also untouched.
    But our theory of action is clear: States and school 
districts must prepare young people for an increasingly 
competitive world. We can't afford to keep doing things the 
same way. We must get better, faster; and competition will help 
make that happen. That is why, if ESEA is reauthorized, we are 
prepared to ask for up to $1 billion more to reward high-
performing high-poverty schools and to fund other key 
strategies like more after-school programming.
    Now, I also understand there are concerns that small rural 
districts cannot compete with large urban districts for grants, 
so this is what we will do: first of all, we will continue 
funding the Rural Education Achievement Program, also known as 
REAP. It has not been consolidated with any other programs or 
funding streams. Secondly, we will look at competitive 
priorities for rural districts where it makes sense and is 
needed, and we welcome that discussion with you. Finally, we 
are also identifying foundations and nonprofit organizations to 
partner with rural districts and increase their investment 
there.
    I have traveled to many rural areas in the past year and 
seen firsthand both the challenges they face as well as their 
tremendous capacity and willingness to address them. I am 
confident that our department can support rural school 
districts as they work to improve and compete.
    Now let me move to higher education. As you know, much of 
our higher-education agenda depends on passage of SAFRA, which 
shifts billions of dollars away from bank subsidies and into 
direct loans and other investments, including community 
colleges, which, Congressman, you mentioned earlier. The 
community colleges system is a lifeline to bring a bright 
future for so many low-income and working-class individuals. 
Dollar for dollar, it is one of the best bargains in education, 
and we want to make it available to every single student who 
qualifies.
    All told, our proposed budget will invest $156 billion in 
loans and grants to help young people and adults pay for 
college. That money will directly help some 15 million college 
students, which is three out of every five college students in 
the country.
    Pell Grants will increase by $160 next year and will rise 
annually by the rate of inflation plus a point to keep up with 
rising tuition. Our budget also includes more money for 
colleges serving large minority populations, including the 
HBCUs.
    I want to assure you that the Department of Education is 
fully prepared to switch to direct lending. In fact, many banks 
have dropped out of this business due to the recession, so we 
have already assumed much of the lending workload. And more 
than 2,300 colleges and universities have also shifted, with 
little or no disruption.
    I also want to emphasize that the private sector will 
retain a major role in the student lending business, because we 
will use only private loan-servicing companies. So this 
legislation is a win-win for everyone: for taxpayers, for 
students, and the private-sector jobs associated with servicing 
those loans.
    I thank the House for its leadership on SAFRA, and I 
promise to work very closely with the Senate to get the bill 
passed.
    One more important part of our agenda involves educating 
those adults with basic or below-basic literacy skills. They 
are increasingly out of step with the new economy. This is an 
enormous economic and social challenge, and we want to work 
with you and with the Department of Labor to expand investments 
in adult education and to reauthorize the Workforce Investment 
Act to lift all of America's workers into the new economy.
    Finally, I want to speak to the issue of efficiency. 
American taxpayers rightfully expect us to stretch every single 
dollar that we have been given. To that end, we conducted a 
line-by-line review of our budget and eliminated six programs 
that duplicated others or have not demonstrated their 
effectiveness. That alone saved us about $123 million.
    We saved another $217 million by eliminating 571 earmarks. 
We also took 38 separate programs and consolidated them into 11 
funding streams to cut red tape for States and for school 
districts.
    So we present to you a budget that is smarter and more 
focused and reflects a rigorous review of every single program. 
It puts America on a path toward educational excellence. It 
also seeks to strike the balance between more flexibility for 
States and local school districts and more accountability to 
meet our obligation to parents and taxpayers.
    The budget clearly signals our intent to move forward with 
reauthorization of ESEA. We are working closely with a 
bipartisan group of Members of Congress to build upon the 
strengths of this important law while fixing some of its flaws.
    As the President has said so many times, countries that 
out-educate us today will out-compete us tomorrow. By one 
estimate, closing the achievement gap with better performing 
nations would increase gross domestic product by $2.3 trillion 
annually.
    But it is not just about economics. It is about our 
national commitment to equality of opportunity. Education is 
the civil-rights issue of our generation. No other work is more 
challenging or more urgent, and also no other work is more 
promising.
    So I thank you so much for your commitment, your 
leadership, and your hard work on behalf of our children. I 
look forward to answering your questions now. Thank you.
    [The prepared statement of Arne Duncan follows:]

           Prepared Statement of Hon. Arne Duncan, Secretary,
                      U.S. Department of Education

    Chairman Spratt, Ranking Member Ryan and Members of the Committee: 
Thank you for this opportunity to come before this Committee and talk 
about improving education in America. I want to begin by thanking all 
of you for your commitment to our children's education.
    It was just over a year ago that Congress and President Obama 
worked together to complete the American Recovery and Reinvestment Act 
of 2009 (Recovery Act). This legislation will deliver nearly $100 
billion to Recovery Act recipients, including States and school 
districts, to help address budget shortfalls in the midst of the most 
severe financial crisis and economic recession since the Great 
Depression. To date, the Department has awarded more than $69 billion. 
For the quarter ending December 31, 2009, recipients reported that 
assistance from the Department of Education funded approximately 
400,000 jobs overall, including more than 300,000 education jobs, such 
as principals, teachers, librarians and counselors. These numbers are 
consistent with the data submitted in October, during the first round 
of reporting, and this consistency reflects the steady and significant 
impact of the Recovery Act. Although State and local education budgets 
remain strained, schools systems throughout the country would be facing 
much more severe situations were it not for the Recovery Act. The 
Recovery Act has also helped families and students pay for college by 
increasing federal student aid.
    I believe, however, that the Recovery Act did much more than just 
provide short-term financial assistance to States and school districts. 
Indeed, I think the Recovery Act will be seen as a watershed for 
American education because it also laid the groundwork for needed 
reforms that will help improve our education system and ensure 
America's prosperity for decades to come. Thanks to the Recovery Act, 
all States now are working to strengthen their standards and 
assessments; improve teacher and leader effectiveness; improve data 
systems and increase the use of data to improve instruction; and turn 
around low-performing schools.
    In addition, the Recovery Act helped to jumpstart a new era of 
innovation and reform, including through the $4 billion Race to the Top 
program and the $650 million Investing in Innovation Fund. States 
already have demonstrated their interest in the reforms called for by 
the Recovery Act and Race to the Top. Just in preparation to apply for 
Race to the Top grants, States have made essential changes, such as 
allowing data systems to link the achievement of individual students to 
their teachers and enabling the growth or expansion of high-quality 
charter schools. States also are demonstrating the progress they have 
made toward implementing the reforms called for in the State Fiscal 
Stabilization Fund in their applications for Phase II of that funding. 
We must continue to invest in innovation and scale up what works to 
make dramatic improvements in education. The President's fiscal year 
2011 budget (``budget request'') requests $1.35 billion for Race to the 
Top awards, both for States and for a new school district-level 
competition. The 2011 budget request also includes $500 million for the 
Investing in Innovation (i3) program.
    The House also has passed the Student Aid and Fiscal Responsibility 
Act (SAFRA), which would make much-needed reforms to Federal 
postsecondary student aid programs that would enable us to make key 
investments in education by redirecting the tens of billions of dollars 
that otherwise would be spent on unnecessary subsidies to lenders over 
the next decade. These investments include expanding student aid though 
a more generous Pell Grant program and low-cost student loans, 
preparing students and workers for 21st Century jobs to increase our 
social well-being and economic prosperity, including through President 
Obama's American Graduation Initiative, and helping more low-income 
children enter school with the skills they need to succeed through the 
President's Early Learning Challenge Fund. SAFRA also includes 
important investments in Historically Black Colleges and Universities 
and minority-serving institutions. Our 2011 budget request strongly 
supports SAFRA, and we are working to win Senate approval for it as 
soon as possible.
                 president obama's 2011 budget request
    As you know, earlier this month President Obama released his fiscal 
year 2011 budget request. The centerpiece of the 2011 budget request 
for the Department of Education is the pending reauthorization of the 
Elementary and Secondary Education Act (ESEA). The President is asking 
for a discretionary increase of $3.5 billion for fiscal year 2011, of 
which $3 billion is dedicated to ESEA, the largest-ever requested 
increase for ESEA. Moreover, if together, we complete an ESEA 
reauthorization that is consistent with the President's plan, the 
Administration will submit a budget amendment for up to an additional 
$1 billion for ESEA programs. But, our budget and reauthorization are 
not simply about more resources--they also are about using resources 
more effectively. We would greatly appreciate your support for this 
historic budget.
    As part of developing the 2011 budget request and performance plan, 
the Department of Education has identified a limited number of high-
priority performance goals that will be a particular focus over the 
next two years. These goals, which will help measure the success of the 
Department's cradle-to-career education strategy, reflect the 
importance of teaching and learning at all levels in the education 
system. The Department's goals include supporting reform of struggling 
schools, improvements in the quality of teaching and learning, 
implementation of comprehensive statewide data systems, and simplifying 
student aid. These goals and key initiatives and other performance 
information are included in the President's Fiscal Year 2011 Budget 
materials and are on www.ed.gov.
        fiscal year 2011 budget request and esea reauthorization
    Our 2011 budget request incorporates an outline of our thoughts 
about ESEA reauthorization. We have thought a great deal about the 
appropriate Federal role in elementary and secondary education, and 
want to move from a simple focus on rules, compliance, and labeling of 
insufficient achievement, toward a focus on flexibility for States and 
local educational agencies (LEAs) that demonstrate how they will use 
program funds to achieve results, and on positive incentives and 
rewards for success. That is why, for example, our 2011 budget request 
includes $1.85 billion in new funding for the Race to the Top and 
Investing in Innovation (i3) programs. In addition, our reauthorization 
proposal for Title I, Part A of ESEA would reward schools or LEAs that 
are making significant progress in improving student outcomes and 
closing achievement gaps. Our budget and reauthorization proposals also 
propose to increase the role of competition in awarding ESEA funds to 
support a greater emphasis on programs that are achieving successful 
results.
    We believe that our goals of providing greater incentives and 
rewards for success, increasing the role of competition in Federal 
education programs, supporting college- and career-readiness, turning 
around low-performing schools, and putting effective teachers in every 
classroom and effective leaders in every school require a restructuring 
of ESEA program authorities. For this reason, our budget and 
reauthorization proposals would consolidate 38 existing authorities 
into 11 new programs that give States, LEAs, and communities more 
choices in carrying out activities that focus on local needs, support 
promising practices, and improve outcomes for students, while 
maintaining critical focus on the most disadvantaged students, 
including dedicated programs for students who face unique challenges, 
such as English language learners and homeless, neglected and 
delinquent and migrant students.
                     college- and career-readiness
    Another key priority in our proposals builds on the Recovery Act's 
emphasis on stronger standards and high quality assessments aligned 
with those standards. We believe that a reauthorized Title I program, 
which our budget request would fund at $14.5 billion, should focus on 
graduating every student college- and career-ready. States would adopt 
standards that build toward college- and career-readiness, and 
implement high-quality assessments that are aligned with and capable of 
measuring individual student growth toward these standards. Our budget 
request would provide $450 million (a 10 percent increase) for a 
reauthorized Assessing Achievement program (currently State 
Assessments) to support implementation of these new assessments.
    States would measure school and LEA performance on the basis of 
progress in getting all students, including groups of students who are 
members of minority groups, low-income, English learners, and students 
with disabilities, on track to college- and career-readiness, as well 
as closing achievement gaps and improving graduation rates for high 
schools. States would use this information to differentiate schools and 
LEAs and provide appropriate rewards and supports, including 
recognition and rewards for those showing progress and required 
interventions in the lowest-performing schools and LEAs. To help turn 
around the nation's lowest-performing schools, our budget would build 
on the $3 billion in school improvement grants provided in the Recovery 
Act by including $900 million for a School Turnaround Grants program 
(currently School Improvement Grants). This and other parts of our 
budget demonstrate the principle that it is not enough to identify 
which schools need help--we must encourage and support state and local 
efforts to provide that help.
                 effective teachers and school leaders
    We also believe that if we want to improve student outcomes, 
especially in high-poverty schools, nothing is more important than 
ensuring that there are effective teachers in every classroom and 
effective leaders in every school. Longstanding achievement gaps 
closely track the inequities in classrooms and schools attended by poor 
and minority students, and fragmented ESEA programs have failed to make 
significant progress to close this gap. Our reauthorization proposal 
will ask States and LEAs to set clear standards for effective teaching 
and to design evaluation systems that fairly and rigorously 
differentiate between teachers on the basis of effectiveness and that 
provide them with targeted supports to enable them to improve. We also 
will propose to restructure the many teacher and teacher-related 
authorities in the current ESEA to more effectively recruit, prepare, 
support, reward, and retain effective teachers and school leaders. Key 
budget proposals in this area include $950 million for a Teacher and 
Leader Innovation Fund, which would support bold incentives and 
compensation plans designed to get our best teachers and leaders into 
our most challenging schools, and $405 million for a Teacher and Leader 
Pathways program that would encourage and help to strengthen a variety 
of pathways, including alternative routes, to teaching and school 
leadership careers.
    We also are asking for $1 billion for an Effective Teaching and 
Learning for a Complete Education authority that would make competitive 
awards focused on high-need districts to improve instruction in the 
areas of literacy, science, technology, engineering, mathematics, the 
arts, foreign languages, civics and government, history, geography, 
economics and financial literacy, and other subjects. We propose these 
programs in addition to a $2.5 billion Effective Teachers and Leaders 
formula grant program to States and LEAs, to promote and enhance the 
teaching profession.
    In addition, throughout our budget, we have included incentives for 
States and LEAs to use technology to improve effectiveness, efficiency, 
access, supports, and engagement across the curriculum. In combination 
with the other reforms supported by the budget, these efforts will pave 
the way to the future of teaching and learning.
                        improving stem outcomes
    One area that receives special attention in both our 2011 budget 
request and our reauthorization plan is improving instruction and 
student outcomes in science, technology, engineering, and mathematics 
(STEM). The world our youth will inherit increasingly will be 
influenced by science and technology, and it is our obligation to 
prepare them for that world.
    The 2011 request includes several activities that support this 
agenda and connect with President Obama's ``Educate to Innovate'' 
campaign, which is aimed at fostering public-private partnerships in 
support of STEM. Our goal is to move American students from the middle 
of the pack to the top of the world in STEM achievement over the next 
decade, by focusing on (1) enhancing the ability of teachers to deliver 
rigorous STEM content, and providing the supports they need to deliver 
that instruction; (2) increasing STEM literacy so that all students can 
master challenging content and think critically in STEM fields, and 
participate fully as citizens in an America changed by technology in 
ways we cannot envision; and (3) expanding STEM education and career 
opportunities for underrepresented groups, including women and girls 
and individuals with disabilities.
    Specifically, we are asking for $300 million to improve the 
teaching and learning of STEM subjects through the Effective Teaching 
and Learning: STEM program; $150 million for STEM projects under the 
$500 million request for the i3 program; and $25 million for a STEM 
initiative in the Fund for the Improvement of Postsecondary Education 
to identify and validate more effective approaches for attracting and 
retaining, engaging and effectively teaching undergraduates in STEM 
fields. And, I have directed the Department to work closely with other 
federal agencies, including the National Science Foundation, the 
Department of Defense, the National Aeronautics and Space 
Administration, and the National Institutes of Health to align our 
efforts toward our common goal of supporting students.
                        comprehensive solutions
    We also recognize that schools, parents, and students will benefit 
from investments in other areas that can help to improve student 
outcomes. Toward that end, we are proposing to expand the new Promise 
Neighborhoods program by including $210 million to fund school reform 
and comprehensive social services for children in distressed 
communities from birth through college and career. A restructured 
Successful, Safe, and Healthy Students program would provide $410 
million to--for the first time--systematically measure school climates, 
which we know can affect student learning. This will help direct 
funding to schools that show the greatest need for resources to 
increase students' safety and well-being by reducing violence, 
harassment and bullying, promote student physical and mental health, 
and prevent student drug, alcohol, and tobacco use.
                     college access and completion
    The Administration has made college- and career-readiness for all 
students the goal of its ESEA reauthorization proposal, because most 
students will need at least some postsecondary education to compete for 
jobs in the 21st Century global economy. For this reason, we are 
proposing a College Pathways and Accelerated Learning program that 
would increase high school graduation rates and preparation for college 
by providing students in high-poverty schools with opportunities to 
take advanced coursework that puts them on a path toward college. This 
new program would help expand access to accelerated learning 
opportunities such as Advanced Placement and International 
Baccalaureate courses, dual-enrollment programs that allow students to 
take college-level courses and earn college credit while in high 
school, and ``early college high schools'' that allow students to earn 
a high school degree and an Associate's degree or two years of college 
credit simultaneously.
    Just as essential to preparing students for college is ensuring 
that students and families have the financial support they need to pay 
for college. As I noted earlier, the Administration supports passage of 
SAFRA, which would make key changes in student financial aid and higher 
education programs that are consistent with President Obama's goal of 
restoring America's status as first in the world in the percentage of 
college graduates by 2020. In combination with SAFRA, the 2011 request 
would make available more than $156 billion in new grants, loans, and 
work-study assistance--an increase of $58 billion or 60 percent over 
the amount available in 2008--to help almost 15 million students and 
their families pay for college. And another achievement of the Recovery 
Act, the new American Opportunity Tax Credit, will provide an estimated 
$12 billion in tax relief for 2009 filers. The budget proposes to make 
this refundable tax credit permanent, which will give families up to 
$10,000 to help pay for four years of college.
    The 2011 budget request would bring the maximum Pell grant to 
$5,710, nearly a $1,000 increase since the President took office. In 
that time, the number of students receiving grants has grown from six 
million to nearly nine million, and the total amount of aid available 
has nearly doubled. In addition, the budget request would make funding 
for the Pell Grant program mandatory rather than discretionary, to 
eliminate annual uncertainty about Pell Grant funding and end the 
practice of ``backfilling'' billions of dollars in Pell Grant funding 
shortfalls.
    No one should go broke because of student loan debt. That is why 
our budget also would help borrowers struggling to repay student loans 
by reducing the minimum payment to 10 percent of their discretionary 
income, and providing for all of their debt to be forgiven after 20 
years--10 years if they choose a career in public service. These 
changes will help more than one million borrowers next year.
                 improving outcomes for adult learners
    The 2011 budget request includes funding for a variety of programs 
that support adult learners, including career and technical education, 
and adult basic and literacy education. These programs provide 
essential support for State and local activities that help millions of 
Americans develop the knowledge and skills they need to reach their 
potential in a global economy. For example, our request would provide 
$1.3 billion for Career and Technical Education (CTE) State Grants, to 
support continued improvement and to increase the capacity of programs 
to prepare high school students to meet state college and career-ready 
standards. One of our greatest challenges is to help the 90 million 
adults who would enhance their career prospects by increasing their 
basic literacy skills. For this reason, we also are asking for $612.3 
million for Adult Basic and Literacy Education State Grants, an 
increase of $30 million over the comparable 2010 level, to help adults 
without a high school diploma or the equivalent to obtain the knowledge 
and skills necessary for postsecondary education, employment, and self-
sufficiency.
            improving outcomes for persons with disabilities
    The budget also includes several requests and new initiatives to 
enhance opportunities for students and other persons with disabilities. 
For example, the budget request includes a $250 million increase for 
grants to States under the Individuals with Disabilities Education Act, 
to help ensure that students with disabilities receive the education 
and related services they need to prepare them to lead productive, 
independent lives. The $3.6 billion request for Rehabilitation Services 
and Disability Research would consolidate nine programs under the 
Rehabilitation Act into three, to reduce duplication and improve the 
provision of rehabilitation and independent living services for 
individuals with disabilities. The request includes a $6 million 
increase over the 2010 level for a new Grants for Independent Living 
program (which consolidates the Independent Living State Grants and 
Centers for Independent Living) and would provide additional funding 
for States with significant unmet needs. It also includes $25 million 
for a new program that would expand supported employment opportunities 
for youth with significant disabilities as they transition from school 
to the workforce, through competitive grants to States to develop 
innovative methods of providing extended services.
    The Budget provides $112 million for the National Institute on 
Disability and Rehabilitation Research to support a broad portfolio of 
research and development, capacity-building, and knowledge translation 
activities. And the request includes $60 million, $30 million under 
Adult Education and $30 million under Vocational Rehabilitation, for 
the Workforce Innovation Fund, a new initiative in partnership with the 
Department of Labor. The proposed Partnership for Workforce Innovation, 
which encompasses $321 million of funding in the Departments of 
Education and Labor, would award competitive grants to encourage 
innovation and identify effective strategies for improving the delivery 
of services and outcomes for beneficiaries under programs authorized by 
the Workforce Investment Act. This investment will create strong 
incentives for change that, if scaled up, could improve cross-program 
delivery of services and outcomes for beneficiaries of programs under 
the Workforce Investment Act.
                               conclusion
    In conclusion, we have made extraordinary progress in meeting the 
needs of our schools and communities in the midst of financial crisis 
and recession, making long-needed reforms in our Federal postsecondary 
student aid programs, and reawakening the spirit of innovation in our 
education system from early learning through college. The next step to 
cement and build on this progress is to complete a fundamental 
restructuring of ESEA, and we believe strongly that our 2011 budget 
request is essential to that effort. I look forward to working with the 
Committee toward that goal and have every confidence that with your 
continuing leadership and strong support from President Obama and the 
American people, we will accomplish this important task.
    Thank you. I would be happy to answer any questions you may have.

    Chairman Spratt. Mr. Secretary, thank you very much, sir.
    One of the key features of the bill this year, coupled with 
other legislation we are passing, is that we will be moving the 
student loan program from indirectly made guaranteed loans to 
direct loans from the Department of Education.
    Could you take just a second or two to explain the policy 
here and also the savings that will be generated over a 5- or 
10-year period of time?
    Secretary Duncan. The estimates in terms of savings are as 
high as $87 billion over the next decade. It is a staggering 
amount of money. This is simply by removing subsidies to banks 
and putting those savings into education. And, again, this will 
fund two thirds of our education agenda: the higher-education 
piece and the early childhood piece.
    Let me take a moment to talk about both. I think there is 
no better investment we can make than in early childhood 
education. If we are serious about closing the achievement gap 
in this country, we have to make sure that children enter 
kindergarten ready to learn and ready to read.
    And so these resources, through an Early Learning Challenge 
Fund, would enable us to do two things: dramatically expand 
access to early childhood programs and, secondly, dramatically 
improve quality. If this is glorified babysitting it is not 
going to change students' lives, but these are high quality 
programs. If students can enter kindergarten ready to learn, 
they can do very, very well.
    The second piece is a huge one on the higher-education 
side. And the chance to put billions of dollars into increased 
Pell Grants, Perkins loans, tuition tax credits I think is just 
absolutely critical at a time when going to college has never 
been for important, has never been more expensive, and our 
Nation's families have never been under more financial duress.
    There are no good jobs out there for high school dropouts, 
as all of you know. There are almost no good jobs out there for 
someone who just has a high school diploma. Some form of higher 
education--4-year universities, 2-year community colleges, 
trade, technical, vocational training--has to be the goal for 
every single student who graduates from high school.
    And so the chance to make this much more affordable at a 
time when America's families have never been under more 
financial duress is a huge step in the right direction.
    You may have seen last week a recent survey that came out 
that demonstrated that so many American families feel 
disconnected from higher education. They feel they can't afford 
it; they feel it is for rich people. And that's a real 
challenge when we know getting that higher education and 
training is just so critically important for strengthening our 
economy.
    And so we want to invest huge amounts of money to make 
college more accessible and affordable. We want to make sure 
more students aren't just going to college, but graduating.
    In terms of the shift to direct lending, over the past 3 
years, before we did anything, we saw a movement from a 
thousand colleges and universities using direct lending to 
2,300. That migration is already happening, and we are 
absolutely prepared and ready to work as more universities come 
in.
    Finally, it is very important for me to say that the 
private sector will do all of the servicing of these loans. 
This is not our core competency. We don't think we are good at 
it. The private, free marketplace will play. So companies that 
do a great job of servicing the loans and keeping default rates 
low will get more and more business; those that don't do a good 
job will lose business. It is great for taxpayers, it is great 
for students. And, again, that is the great place for the 
private sector to play.
    So, at multiple levels, we think this movement is hugely 
important. And, again, I want to thank all of the leadership 
here for giving us an opportunity, and we are going to work 
hard with the leadership of the Senate to pass this bill.
    Chairman Spratt. In particular with respect to the Perkins 
loan program, do you have any information available to indicate 
what the likely savings will be from the changes you are 
proposing?
    Secretary Duncan. Well, it enables us to increase our 
investment from $1 billion dollars to $6 billion. So it is a 
dramatic increase in resources for students that are working 
hard and want to have a chance to stay in school.
    Chairman Spratt. Well, as I understand that, you are going 
to use some of the savings to expand the program to the 
colleges that don't now have it?
    Secretary Duncan. That is exactly right, make it accessible 
to everybody.
    Chairman Spratt. Is the Perkins program working, the 
principle of it--college administration, college loan review? 
Is this not a concept with a human touch to it and a human face 
to it that is a feature you would like to have in your higher-
education student loan program?
    Secretary Duncan. I think it is working. I think the 
Perkins loan program is working. We think the Pell Grant 
program is working. We just want to make sure more students 
have access. And, again, there is just so much need out there, 
so we can put tens of billions of dollars to make college more 
accessible and affordable.
    The other thing which I should have touched on is on the 
back end of this. When students graduate from college, we have 
worked very hard to reduce the amount that they have to pay 
back in terms of loans. And so, if this bill passes--it is 
called income-based repayment, IBR--that number would go down 
to 10 percent of your salary. So it would mean significantly 
reductions in loan repayments. And after 10 years of public 
service work--becoming a teacher; if you graduate from law 
school and want to set up a legal clinic in a disadvantaged 
community, or a medical clinic someplace--after 10 years, those 
loans would be erased. And so it really removes the financial 
impediments. There are many great people who want to go in the 
public sector, want to contribute, but because they had 
$60,000, $80,000, $100,000 in loans, they simply couldn't 
afford to do that work.
    And so we are trying to make it more accessible and 
affordable at the front end. And in the back end removing those 
golden handcuffs and getting talent into the public sector, we 
think would be a huge step in the right direction.
    Chairman Spratt. Just a couple more questions about the 
Perkins program. You indicated that if a college was doing 
well, they could get more business; if they weren't doing well, 
they would lose business. Nobody can argue with that. But how 
do they get more business particularly on the collection side 
and the loan administration side?
    Secretary Duncan. What we want to look at is, what are 
folks doing to graduate students? And, you know, what are we 
doing not just to get students in the front end but out the 
back end, as well? And so this is not just about college 
access; it is about completion and attainment. And we want to 
shine a spotlight there.
    We also want to reward those places that are helping to 
contain costs. One of the real challenges we are facing is 
runaway, escalating higher-education costs. And when those 
costs are contained, we want to reward that, as well.
    Chairman Spratt. Just a couple of final questions.
    I am sure Members here, like me, are receiving lots of mail 
from people who are supporters of the arts in education. And 
they are very much concerned that, as you consolidate different 
programs into one big block grant, the arts will be squeezed 
off the back burner and won't receive the emphasis and 
attention and funding they have enjoyed over the last several 
years.
    Is that a concern? And how do we protect against it?
    Secretary Duncan. Absolutely. I will tell you, it has been 
a fascinating year of learning for me as I travel, again, to 
about 37 States, in rural, urban, and suburban districts and 
really try to talk to hundreds and hundreds of teachers and 
parents and students.
    I will tell you, Mr. Chairman, that maybe the most common 
refrain I heard was a real concern that, under No Child Left 
Behind, historically we have had a narrowing of the curriculum 
and that, sort of, what gets tested gets taught, leading to a 
loss of the arts, a loss of history, a loss of social studies.
    And so one of the biggest things that we want to emphasize 
is, yes, those basics of reading and math are hugely important, 
but we think every child deserves a well-rounded education. And 
so that is absolutely the arts, it is absolutely history, it is 
absolutely social studies, it is absolutely physical education.
    And so what we have actually done is we have created a pot 
of money, what we are calling ``The Well-Rounded Education,'' a 
billion-dollar pot. It is a $100 million increase, a 10 percent 
increase, to support all those things. We want to do everything 
we can to make sure that all of our students--I want to be 
clear on this--particularly children at the elementary grades--
we can't wait until high school to expose students to the arts. 
We need our young students, you know, to start to develop their 
passions and develop their interests.
    And so, while I understand the concern, the fact is that 
there is a billion-dollar pot, and that represents a $100 
million increase, to support a well-rounded education.
    Chairman Spratt. There is also concern that Work-Study 
moneys are either not being increased or allowed to be eroded 
away due to inflation. And a number of the colleges that I 
represent in South Carolina are seeing their allotments for 
Work-Study dwindle. This is what they look upon as a middle-
income program. It is not like Pell Grants for lower income 
students, but it is a middle-income program for deserving 
students who are willing to work if they have the opportunity 
and also if it is complementary to their education.
    What is happening to Work-Study? Because I am hearing from 
the college presidents and tech school presidents and community 
college people that Work-Study is taking a hit and they are 
feeling the consequences.
    Mr. Skelly. Work-Study is continuing in the budget, Mr. 
Chairman. And the Recovery Act included a separate 
appropriation of $200 million for Work-Study. We think that 
money is still going to be there through the next academic 
year.
    Chairman Spratt. Okay.
    Secretary Duncan. Like Title I, like IDEA, there is pretty 
significant carryover in those programs, and Work-Study is 
similar to those.
    Chairman Spratt. So there will be no cuts in Work-Study 
this year?
    Mr. Skelly. Compared to the budget for 2010, the 2011 
budget is the same. So there wouldn't be any cuts.
    Chairman Spratt. How much do you anticipate getting this 
year and next as part of what remains available under the 
Recovery Act?
    Secretary Duncan. On Title I and IDEA, we anticipate about 
half that money--about $22 billion total. We anticipate about 
half that money, about $11 billion, being available for fall 
2010, this upcoming school year.
    Chairman Spratt. Thank you very much.
    Mr. Hensarling?
    Mr. Hensarling. Thank you, Mr. Chairman.
    Mr. Secretary, I believe I heard you say in your testimony 
that most government spending is frozen. Did I hear you 
correctly?
    Secretary Duncan. Domestic spending, yes.
    Mr. Hensarling. Domestic spending. Okay. There were, if I 
have my figures correct, $3.59 trillion total outlays in 2010. 
The President is requesting $3.834 trillion in his latest 
budget request, which, back of the envelope, is about a 6.8 
percentage request with roughly 60 percent mandatory, 40 
percent discretionary. I am still finding it a little difficult 
to believe that most government spending is frozen--most 
discretionary spending is frozen.
    In addition, and if we look at the total government, isn't 
it true that 86 percent of Federal spending is exempt from the 
President's freeze?
    Secretary Duncan. What is your question on our budget.
    Mr. Hensarling. My question is, is it not true--if you 
don't know the answer, you can say that. The question is, is it 
not true that 86 percent of the President's budget request, 
that the freeze does not apply to?
    Mr. Skelly. The freeze does not apply to mandatory programs 
nor to Department of Defense or homeland security programs.
    Mr. Hensarling. So is the answer yes, no, you don't know?
    Mr. Skelly. That looks about right.
    Mr. Hensarling. Okay. Thank you. Thank you.
    Mr. Secretary, you have asked for a number of funding 
increases in your testimony for certain programs, a number of 
which I am familiar with, a number of which I know do very good 
work. But my question--I don't believe I heard you ask for any 
funding decreases in your testimony.
    Can we have that debt chart again, please?
    My question is, Mr. Secretary, how do you propose paying 
for this? Should we try to continue to borrow from the Chinese, 
who, up until recently, were the largest holder of our debt? 
But we know that, at least publicly, they are beginning to 
divest of their holdings. We have been lectured by the Chinese 
on our spendthrift ways.
    Now, all of a sudden, we wake up and the Japanese are the 
largest holder of our foreign debt. And yet we look at Japan, 
and we see that they have attempted eight stimulus programs 
over 10 years; for all intents and purposes, have had flat GDP 
for almost 15 years; and their own demographic fiscal time bomb 
is even greater than ours.
    So if we are not going to borrow from the Chinese, if we 
are not going to borrow from the Japanese, just exactly how are 
we going to pay for all this?
    Secretary Duncan. We didn't just ask for increases, sir; we 
actually made some pretty tough cuts. As I talked about 
earlier, we did program eliminations that resulted in $123 
million in savings. When we eliminated earmarks--and that is 
tough and controversial; not everyone supports that--that 
eliminated $217 million.
    Mr. Hensarling. But, Mr. Secretary, a combination of the 
mandatory and the discretionary that you are requesting, are 
you not, on net, asking for a budget increase?
    Secretary Duncan. Yes.
    Mr. Hensarling. Okay. Thank you.
    Secretary Duncan. And the vast majority of the money for 
early childhood and higher ed, that is simply stopping 
subsidizing banks and investing in education. It is not going 
back to taxpayers for money.
    Mr. Hensarling. So the question still remains. Net, you are 
asking for a funding increase. You know that the President has 
submitted a budget that will double the national debt in 5 
years from fiscal year 2008 when he was elected to office, 
triples it in 10.
    The question remains, how do you pay for it?
    Secretary Duncan. Let me explain my thoughts on this.
    I think we have to educate our way to a better economy. I 
think it is the only way we get there. We have a dropout rate 
that is 27 percent in this country. We have 1.2 million young 
people every year leaving our schools and going to the streets. 
That is morally unacceptable, and it is economically 
unsustainable.
    The only way we get a strong economy in this country is we 
have to out-educate other countries. And so I would argue this 
is the best investment system we can make. I expect you to hold 
me and my Department accountable for results, just as we are 
holding States and districts, we want to hold them accountable 
for results. But we have to get there.
    The dropout rate, the huge achievement gap is hundreds of 
trillions of dollars in money that we are leaving on the table.
    Mr. Hensarling. Mr. Secretary, I am not prepared to debate 
the proposition, because my guess is I agree with much of what 
you say. I mean, anything that I have achieved in life has a 
lot to do with, number one, being blessed to be born an 
American citizen; number two, being born into a great family; 
but, number three, the educational opportunities I had, first 
at a public school education system in College Station, Texas, 
and later at Texas A&M University. I believe in educational 
opportunity. What I fear is that chart there is going to take 
away educational opportunity.
    And so the question remains, where is the plan from this 
administration to deal with this mountain of debt? I believe, 
indeed, that part of economic growth is going to be increased 
educational opportunities. But you are still not answering the 
question, how are you going to pay for it? Where is the 
entitlement reform plan of this administration? Why aren't they 
proposing flat discretionary spending in other areas? Again, 
what we don't see is any payment of this.
    Now, in your testimony, you said many families can't afford 
college education today. That is correct. I meet these families 
every day in the Fifth Congressional District of Texas. But to 
pay for the mountain of red ink, the sea of red ink that this 
administration is proposing, today taxes would have to be 
raised 60 percent on these very same families that can't afford 
college education today. Interest alone on the national debt 
under the President's proposal by 2020 is going to be roughly 
$7,000 per family, $840 billion.
    So if they can't afford college education today, how are 
they going to afford it tomorrow? It seems like, as you 
increase the Department of Education budget, you are going to 
significantly decrease the family education budget. It is just 
decimated.
    So, again, I don't debate that these are good programs, 
although, you know, I would debate some, and particularly 
whether we have sufficient local control. But, again, I ask the 
question, how are you going to pay for it?
    Secretary Duncan. I think this is an absolute investment. I 
think this is an investment that our country desperately needs. 
Through better education, we will create jobs, we will reduce 
unemployment, we will bring companies into our districts, into 
our States, into the country. And this is the only way we are 
going to strengthen our economy, long term. Education is the 
answer.
    Chairman Spratt. Mr. Hensarling, he has answered your 
question about five times. Let's move on to another subject 
area.
    Mr. Hensarling. Well, Mr. Chairman, I would respectfully 
say the question was unanswered five times, but I will respect 
your leadership.
    Chairman Spratt. What he is saying is we believe education, 
of all things in the budget, will pay for itself, given the 
dividends it yields in the out-years of the person who is the 
beneficiary of it.
    Mr. Hensarling. Well, I understand your point of view, Mr. 
Chairman. I still don't think it answers the question.
    I will go ahead. I will end with two more questions here, 
and then I will yield back the time.
    The D.C. Opportunity Scholarship Program, I know that you 
are well acquainted with it--9,000 applications, provided 
scholarships to more than 3,000 children. The mayor favors it; 
the school chancellor favors it. Independent studies show that 
parents are very, very satisfied. It has resulted in an 
increase in test scores.
    And so I hear all of these different budget requests to 
increase funding for all these education programs, yet the 
President's budget, as I read it, phases out this very 
successful education program.
    Recently, George Parker, the head of the Washington, D.C. 
teachers' union, was quoted in opposing the scholarship by 
saying, quote, ``Parents are voting with their feet. As kids 
continue leaving the system, we will lose teachers. Our very 
survival depends on having kids in D.C. schools so we will have 
teachers to represent.''
    So it kind of begs the question, every other education 
program--most other education programs in your budget seem to 
be getting an increase. One that is working, one that is very 
popular seems to be zeroed out. And is it about saving 
teachers' unions, or is it about saving kids? Or why is this 
being zeroed out?
    Secretary Duncan. A couple thoughts on that.
    First of all, as you know, Congressman, we fought hard to 
keep the kids currently in the program in those schools and 
make sure they weren't moved in the middle of their education 
career. We didn't want that to be disrupted.
    Going forward, a couple thoughts. The data was actually 
pretty mixed on it. If you look at the studies--I am not sure 
if I will get it right--reading and math, over 3 years, in one 
the results are basically flat, wasn't much movement. The other 
one, over 3 years, there is about a 3-month gain in increase. 
So it is about a month a year of improvement. That is not 
fantastic results, quite frankly. A good tutoring program will 
get you a month's benefit for a year's progress there. So the 
numbers weren't wildly positive.
    Secondly, the big thing--and this is a really important 
one--I think, as a local government or a Federal Government, we 
need to be more ambitious. I don't want to save two children 
from a failing school and leave the other 498 to drown. I think 
we need to be looking to save every single child. And if, you 
know, the local community----
    Mr. Hensarling. But the converse of that, Mr. Secretary, is 
you are letting them all drown.
    Secretary Duncan. No. Could I please finish?
    Mr. Hensarling. Please.
    Secretary Duncan. Let me explain why I am not. So if local 
philanthropy--you know, foundations, individuals--want to help 
give students scholarships, I absolutely welcome that and 
respect that.
    What we want to do--and I don't think the public has quite 
understood this--is we want to turn around chronically failing 
schools. We have $3.5 billion in school improvement grants, not 
to pull one or two children out of a failing school, but to 
help that entire school and to do it with a real sense of 
urgency. I think we need to be much more ambitious than helping 
a handful and leaving the rest to drown.
    The District of Columbia, in school improvement grants, the 
District will receive approximately $11 million to 
fundamentally turn around low-performing schools. The District 
is making significant progress, has a long way to go. And we 
want to invest in whole-school change, turnaround, doing the 
right thing for the entire community, not just for a handful of 
students.
    Mr. Hensarling. Thank you, Mr. Chairman. I will yield back.
    Chairman Spratt. Thank you, Mr. Hensarling.
    Mrs. Schwartz?
    Ms. Schwartz. Okay, thank you. Whenever I am called ``Mrs. 
Schwartz,'' I always think that is my mother-in-law. But 
anyway----
    Chairman Spratt. Is that good or bad?
    Ms. Schwartz. I like my mother-in-law. It is okay.
    But thank you, Mr. Secretary. And I really appreciate your 
testimony and the broad attention that you bring to, well, how 
important education is.
    I did want to say that I very much appreciate your 
understanding and the administration's understanding of the 
importance of investing in education. Certainly, we heard from 
the other side that, while they kind of like education, they 
are not sure the investment should be made this year. And that 
is unfortunate, because, in a lot of ways, there has been 
bipartisan support for investments in education. In fact, I 
think under the previous administration, George Bush, at least 
for the first couple years, really paid some attention to 
improving the accountability and performance of our lowest-
performing schools in particular. And we have some changes we 
have made in those efforts, but, in fact, there was agreement 
on that, because if we don't invest in education, we are not 
going to be--we won't have the workforce of the future, we 
won't be able to compete internationally. So I think we have to 
be very clear about where we started and where we are trying to 
take the budget over all.
    I do want to say that, while the criticism from the other 
side that you have not made enough cuts in education is kind of 
what the inherent question was there, the fact is I actually 
very much appreciate that, while there is a cap--it is called a 
freeze, but a cap essentially--on nondefense discretionary 
spending, that the administration, instead of just saying we 
are doing across-the-board cuts in everything, really did the 
harder thing, which is to focus on what works, let's build on 
what works, and let's eliminate programs that are not working, 
and, third, let's consolidate programs that can be consolidated 
so they are more effective and more efficient.
    That was a smart way to do it. It is harder because there 
is always somebody who likes some of those programs. But it is 
clear that is what you have done. So you have made real 
investments, and I appreciate that.
    And you mention, as well--and I want to just reiterate that 
the dollars in the Recovery Act that went for jobs, I believe 
at the State and local level, really resulted in 400,000 jobs 
at the State and local level; three quarters of those were in 
education. And, in my district, in both the city of 
Philadelphia and the suburbs, we simply would not have been 
able--those local school districts would not have been able to 
maintain the level and quality of teaching and investment 
there.
    So you really talked very eloquently about the investment 
in basic education; pre-K, which I care deeply about; and the 
ability to go on to access college.
    The one piece that you didn't mention and I wanted you to 
talk about, if you would, is the interest in and importance of 
educating our young people to be prepared in science and 
technology, in engineering and in mathematics. That is an area 
that we know is a growth industry. When we are talking about 
growing jobs, we know that we need to prepare our young people 
for the jobs of the future, and that does take attention to, 
particularly, science, engineering, technology. And in my area, 
where we have a great deal of life sciences, biotech, pharma, 
medical education training, it is really very important. We do 
some of that, obviously, we do it very well at the post-
secondary level. But we really need to prepare young people 
starting early in doing that.
    I understand that there is greater investment in STEM 
programs. Could you speak to how important that is and how you 
are going to make sure that there is investment, specifically 
in basic education, towards these kinds of programs that are 
going to lead to the leaders and workers of the future in not 
just health care but energy alternatives, energy efficiency, 
the places we can grow this economy, which, of course, is very 
important to us, not only creating jobs but really building 
that GDP, change that chart for 100 years that was on the 
board?
    Secretary Duncan. The STEM fields are ones that we think we 
have to invest in. We think we have a long way to go as a 
country. We see a huge opportunity here, Again, as you said, if 
students can excel here--and I keep going back--at the earliest 
age and really if we can spark their interest and imagination, 
they are going to be productive citizens, they are going to do 
a great job. They are the next generation of engineers and 
entrepreneurs and inventors who are going to have the 
breakthroughs.
    So when I talked about this billion-dollar pot for well-
rounded education, $300 million of that is set aside for STEM 
education. We are making STEM a competitive priority in the 
Race to the Top grants. We are emphasizing STEM in the Invest 
in Innovation fund, ``i3.'' So, both through its own money and 
through all these other competitive pots, we are trying to put 
a huge push there.
    The other thing I would tell you that we want to be more 
creative on going forward is, how do we get more scientists, 
more engineers, more mathematicians to teach in K-12? How do we 
think about alternative certification? And I think that we want 
to be more creative there. It is hard to instill a love in 
something to a child in something you don't fully understand 
yourself. So how do we make sure that we have more AP physics 
and more AP chemistry at the high school level?
    So we want to invest very significantly here, and I want us 
to be much more creative going forward about thinking how we 
get maybe mid-career changers. Maybe due to the tough economy, 
unfortunately maybe engineers are getting laid off. They might 
do a great job in a classroom. And so I am challenging 
ourselves to push the envelope there in how we get that great 
talent into communities where you don't have enough physics or 
biology or chemistry teachers.
    Ms. Schwartz. Thank you. Much more to talk about, but my 
time is up. Thank you, Mr. Secretary.
    Chairman Spratt. Mr. Garrett?
    Mr. Garrett. Thank you, Mr. Chairman.
    And thank you, Secretary. I appreciate you being here 
today. Also, I appreciate what I see as sincere efforts, both 
before and now, as far as trying to provide us with educational 
reform.
    Many have complimented this administration on their goals 
of the Race to the Top program, and I agree with a lot of the 
initiatives or the goals that are trying to get there. But I do 
want to exercise a few words of caution, though.
    As you are, I am sure, aware, you are not the first 
Secretary to come before this committee to say that we have a 
whole lofty list of goals that you would like to achieve in our 
current public school system, which has, as you would agree, 
serious problems. You are not the first to set out an ambitious 
agenda.
    I have been here for 7 years now, and over the time when we 
were reauthorizing NCLB I went back and looked over the record 
just to see, decades before, going all the way back to 1983, 
there was a report I am sure you are familiar with, it is 
called ``A Nation at Risk,'' that said that Americans had 
fallen dangerously behind the rest of the world in education. 
But new studies today say essentially the same thing, 20-some-
odd years later, regardless of administration.
    Despite that, though, the percentage of GDP--money- we 
spend; we spend more money on education now than at any time in 
our Nation's history. In particular, we have increased the 
Federal share of money in education to an unprecedented degree. 
The total Department of Education spending has increased from 
$38 billion in 2000 to $68 billion in 2008, an increase of 43 
percent, adjusted for inflation. And with this increased 
spending has come a massive list of new Federal regulations.
    Therefore, it appears to me that one thing that hasn't been 
tried is to dramatically increase the degree of State and local 
control. To that end, I have drafted and put in a bill. It is 
called the LEARN Act, Local Education Authority Returns Now. 
And, very simply, it simply says this: that if a State 
legislature so decides, they could opt out entirely of the 
Federal education programs--NCLB or whatever we are going to 
call it--all the Federal education programs and also allow the 
money essentially to remain in the pockets of that State.
    Now, I know in your previous life, you were leading--a 
number of the same reforms that you are talking about right now 
you were championing as chancellor of the public school systems 
back in your home State.
    And I always like to ask folks when they come here, when 
they had a good track record before they came here, do you 
honestly think that you are smarter now that you are here than 
when you were back running your own school systems?
    And, if not, would you support an idea to allow those other 
great smart people who just haven't made it up here to 
Washington yet to be able to decide for themselves that they 
can run the school systems without all of our help?
    Secretary Duncan. Pretty provocative question. I will tell 
you that what I have learned. I don't know if I am smarter. I 
will tell you that before I came here, I didn't think 
Washington had all the answers, and now that I am here, I know 
Washington doesn't have all the answers. The great answers are 
always going to come from local educators, great teachers, 
great principals, great superintendents, who are making a 
difference.
    I will tell you, Congressman, the opportunity I think we 
have, and I don't think I am overly naive or idealistic on 
this, the opportunity that we have been given, is unprecedented 
resources to invest, not in our ideas, not in Washington's 
ideas, but in great work at the local level.
    Mr. Garrett. But if we allow those resources to stay back 
in those States, can't they come up with those great ideas and 
do it themselves?
    Secretary Duncan. Let me finish. The whole point, the whole 
premise behind Race to the Top, the whole premise about 
Investing in Innovation Fund (i3), is to say the good ideas are 
always going to be at the local level. For all the huge 
challenges we talked about, the dropout rate, I am very 
optimistic. Let me tell you why. We have never as a country had 
more high-performing schools in disadvantaged communities; we 
have never had more world class schools.
    Mr. Garrett. But the Race to the Top still sets certain 
parameters, restrictions and so on. Why can't we just let those 
folks make those decisions by themselves? You mentioned in your 
remarks you want schools to be a neighborhood anchor. Why can't 
we just let those people in the neighborhood do it by 
themselves? Why do we have to be the ones telling them? Should 
we have run for school board instead of running for Congress?
    Secretary Duncan. We don't have to tell them. All we tell 
them in Race to the Top, a couple things matter. You need to be 
transparent around data.
    Mr. Garrett. You have to what?
    Secretary Duncan. You have to be transparent around data. 
You need to have high standards. You need to invest in teachers 
and put the best teachers and best principals in communities 
that are underserved.
    Mr. Garrett. Do the people back in your local school boards 
not have those desires? Can't they do that? Do we have to tell 
them that?
    Secretary Duncan. I don't think we have to tell them that. 
I will tell you that there have been very few incentives 
anywhere locally to get the hardest working, the most committed 
teachers and principals to the communities that need the most 
help.
    Mr. Garrett. Do you know who the greatest incentives are? 
The moms and dads of the kids, because they care more about 
their kids than anyone in this room and anyone in the 
bureaucracy that is over there. They are the greatest 
incentives that we have to make sure that these school boards 
are the best. Can't we rely on those parents to do the job, or 
do we have to do it for them?
    Secretary Duncan. Well, let me just say this. We don't have 
to do it for them. And I absolutely agree, every parent, every 
parent, wants the best option.
    What I will tell you, unfortunately, sir, is in far too 
many communities, those hardworking parents don't have a good 
school to send their child to, not through their lack of will 
and not through their lack of commitment. They don't have a 
good option for their child. We have 2,000 high schools, sir, 
in this country that produce half the Nation's dropouts, half. 
Those 2,000 high schools produce 75 percent of the dropouts 
from the minority community. Our African American, Latino, our 
young boys and girls. Those parents care desperately, but 
nothing has changed for them. How do we empower those parents 
to give their child a chance to be successful?
    Mr. Garrett. I would accept then--I agree with you, there 
are those problems. If you could supply this committee when you 
are done--if not the parents, then it must be the local school 
boards that are doing the job. If you could supply the names of 
those school board members that are failing on their 
responsibilities to this committee from your State, then we 
would know exactly who is failing down on the job, because if 
not the parents--you and I agree with that--then it must be the 
school board members. Let us know who those people are because 
we would want to provide accountability for them to.
    Secretary Duncan. And let me just take it one step further. 
To me, honestly, it is not about just pointing fingers and 
laying blame. This is where all of us have to step up. We need 
political leaders to step up. We need parents to be more vocal. 
We need the business community to engage. We need the 
philanthropic sector to be there. We have to rally local 
communities. We have to rally the country behind this.
    As I will tell you, sir, in some places, maybe the local 
school boards are dysfunctional; other places, they might be 
working very, very hard and have very difficult constraints and 
inequitable resources.
    So it is a complicated--I don't ever want to just point--
this is a very complicated complex issue. The opportunity we 
have and what we are trying to do is to get folks to talk, get 
folks to move outside their comfort zones and move outside of 
their silos and work together.
    So school boards are a piece of it. Parents, teachers, 
ultimately students themselves, have to take their own 
education very seriously, but everyone has to come together 
behind this.
    Mr. Garrett. Thank you, Mr. Secretary.
    Ms. Schwartz. And if I may, Mr. Garrett certainly should be 
well aware of all this. New Jersey has gone through years and 
years of lawsuits over just the kinds of issues that have been 
raised here, about how you get State and local communities to 
really step up across the State, not just in particular areas. 
I am sure he has lots of data already in his office on what has 
gone on in New Jersey for many, many years.
    Mr. Garrett. And New Jersey has raised the standards before 
the Federal Government stepped in, and I was involved in that. 
But we did it before the Federal Government had to step in, so 
thank you.
    Chairman Spratt. Mr. Doggett.
    Mr. Doggett. Thank you, Mr. Chairman.
    Thank you Mr. Secretary.
    My concerns are the same two on which I sought answers last 
year and one new one. I will state the three and then ask you 
if you would to respond separately to each one.
    The first is the way that the administration permitted
    State bureaucracies to obstruct Federal resources from 
making a real difference in our local public school districts. 
In Texas, as you are well aware, the largest potential source 
of Recovery Act public education funding, the State Fiscal 
Stabilization Fund, has been really outstanding in protecting 
one job; the job of the Governor of the State of Texas.
    But as my Austin schools and many others are preparing to 
lay off employees, they are not one penny better off than if we 
never provided the $3.25 billion in stabilization moneys to the 
State of Texas. Through a shell game, these moneys were used to 
divert funds that could have gone to invest in students and in 
teachers; they never made it there.
    And this wasn't just spare change. If you look at what you 
are requesting in this budget for Race to the Top moneys, and 
of course, this is the same Governor who will not apply for any 
Race to the Top moneys for the State of Texas, the amount that 
was diverted last year in Texas is about two and a half times 
as much money in one State as you propose in Race to the Top 
for the entire country.
    I have real doubts as to whether this budget will make any 
more difference in the lives of my school children than the 
State Fiscal Stabilization Fund did.
    And my first question is, can you assure me that any future 
Federal education assistance done later this year in the name 
of job creation, will not simply repeat the costly mistakes of 
last year and will instead send these new Federal funds 
directly to local school districts instead of through in 
different State bureaucracies?
    The second concern that I asked you about last year is 
early education. The President's eloquence about the importance 
of early learning and your comments about it today and its 
importance are not reflected in the budget for the Education 
Department. While the budget has increases for child care, 
which is necessary, but in many States entrusting our youngest 
students to someone whose preparation consists of a GED, a 
criminal background check and a few hours of training; Head 
Start, there is no money for pre-K, which I think is critical 
to the early learning system and which you have affirmed is. 
There is no recognition of the importance of incentivizing 
public schools to apply their own resources to expand the 
quality and availability of pre-K. Public schools just seem to 
be absent from the conversation.
    I don't believe there is any place in the country where 
there has been a successful pre-K program for 3- and 4-year-
olds that has been built without the schools playing a leading 
role. And indeed, New Jersey, we were just talking about, and 
Oklahoma are great examples. But so far, the administration has 
not really brought public schools into the Federal policy 
discussion.
    Last year you told me, don't worry about it; we have 
proposed the Early Learning Challenge Fund. But that uncertain 
legislation has no incentives, no requirements for public 
schools to be a part of building a State's early learning 
system and improving its quality. You also referred me to the 
Title I Recovery funds guidance, but that permissive language 
has in the past year produced little change. And the Department 
refused to support the 15 percent requirement in the Recovery 
Act proposed by the Senate for quality early childhood 
education.
    The budget, the Elementary and Secondary Education Act and 
the Challenge Fund need to recognize and support public schools 
as a critical part of our early learning system. My question 
is, what incentives will you provide to encourage schools to 
invest in more Title I funds in pre-K? What are you going to do 
to make sure that pre-K is every bit as important to our public 
education system as third grade and eighth grade? I support 
SAFRA, but whether the Senate can do any better job on it than 
it has on healthcare, I am not confident that passing it will 
answer that question.
    Third, and this is the only new question I have for you, 
concerns Teach for America. The administration has proposed no 
dedicated funding for Teach for America for the coming year, 
and you have left it to compete for funding under a newly 
proposed and not-yet-authorized program. When Teach for America 
could double its size, you allow Teach for America not really 
to grow in 2011 or 2012. In fact, they would have to reduce the 
number of people in their incoming corps.
    How do you propose to bridge the funding gap so that Teach 
for America, which I think is an outstanding program, can 
continue to grow and place effective students in our schools 
where they are needed the most in the upcoming school year?
    Thank you.
    Secretary Duncan. Three great questions. Let me start on 
the first one.
    As we go forward with a proposed Race to the Top III, which 
is $1.35 billion, we specifically requested that districts be 
able to apply directly. And as we talked about the Investing in 
Innovation Fund, districts can apply directly, so I share----
    Mr. Doggett. That is a good idea. As you know, our Governor 
may be trying to restrict that also.
    Secretary Duncan. I understand. But we are trying to make 
sure that folks who want to innovate have access to those 
sources.
    In terms of the----
    Mr. Doggett. The jobs bill.
    Secretary Duncan [continuing]. Jobs bill, again, I am very, 
very concerned about this upcoming school year. Again, we saved 
conservatively, quite frankly, Congressman, conservatively, 
300,000--325,000 jobs this past year.
    Mr. Doggett. Not in Texas.
    Secretary Duncan. Right. I understand.
    Mr. Doggett. And I am concerned about that State. Are you 
going to be sure in these jobs bills that we are not just 
sending the money to the State when you talk about more 
flexibility for the State and it never gets to the school 
district?
    Secretary Duncan. I absolutely share that concern and hear 
you.
    My concern now is there isn't anything in there for 
teachers today, and so that is a challenge. And again, if we 
see massive layoffs of teachers and counselors and librarians 
this upcoming school year, and I think the public doesn't 
understand, superintendents are in a position now that they are 
setting their budgets now for the fall. So March/April is when 
pink slips start to go out. And so I am very concerned about 
that.
    I am absolutely convinced we have literally staved off an 
education catastrophe this past school year, and I am worried 
about this upcoming school year. So I share your concern. I am 
working on that, but right now, we have got to figure out how 
we help to move this.
    On early learning, again, as you said, the House has 
provided real leadership. We are hoping the Senate will follow 
suit. I am confident they will. Just to be clear, that will 
provide $9.3 billion for early childhood education.
    Mr. Doggett. But no specific incentives for the States to 
use their resources through the school system, you have 
declined to do that in this legislation under Title I just as 
you didn't support a 15 percent requirement in the Recovery 
Act, correct?
    Secretary Duncan. Yes. So let me finish. On the $9.3 
billion, that is close to $1 billion a year that we want to 
invest directly in quality early childhood programs. I think 
for us to continue to do a series of directives and mandates is 
not sort of the direction we want to go. Is early childhood 
education probably the best investment we can make? Absolutely. 
In school districts, where we are seeing real progress in 
closing of the gaps and raising the bar for everybody, we are 
seeing them invest in early childhood education. You mentioned 
Oklahoma. Their system is phenomenal.
    Mr. Doggett. That was in fact the State effort. There has 
really been no change in the Federal commitment since last 
year.
    Secretary Duncan. Right. Again, with your colleagues in the 
Senate, we would like to invest $9.3 billion there.
    Finally, on Teach for America, and again, they are great, 
great programs, but to be clear, we made some tough calls. And 
what we did is we simply eliminated all earmarks, and we 
increased the chance for competition.
    Mr. Doggett. Teach for America is an earmark?
    Secretary Duncan. It was a set-aside. It was a set-aside, 
yes.
    Mr. Doggett. And so you don't support Teach for America in 
your budget at all, do you?
    Secretary Duncan. What we did for them, just like we did 
for everything else, is we increased the total amount of money 
available there, and Teach for America has every opportunity to 
compete and get frankly significantly more money, whether it is 
through that or whether it is through the Investing in 
Innovation Fund, than they had before.
    Mr. Doggett. The practical effect this year is it will have 
to cut the size of its corps, isn't it?
    Secretary Duncan. I don't know the answer to that question. 
That is a fair question.
    Mr. Doggett. It is an uncertainty that is really 
unfortunate in this budget.
    Chairman Spratt. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman.
    And I want to thank Mr. Jordan for allowing me to jump 
between my competing hearings this morning.
    Mr. Duncan, thank you so much for being here, and thank you 
for coming to Wyoming in September. You met, of course, with 
students and parents and teachers in Glenrock, Wyoming, and 
then with our community college presidents in Casper. And I was 
really delighted that you would take time on your listening and 
learning tour to really have a very productive dialogue. And 
you did it without self-importance, it just really went over 
well in Wyoming. Very much appreciated, so thank you for that.
    But you are a local educator. You know that over 90 percent 
of the dollars for education comes from the States. And so my 
line of questioning is a little bit the same as Mr. Garrett's, 
except I want to make some suggestions that I hope you will be 
receptive to for schools in States like we have in Wyoming 
where we have really exemplary commitments to education.
    You mentioned that there are 2,000 schools that are 
producing half the dropouts in this country. I want to talk 
about the schools that don't. And with regard to those that 
really are doing an exemplary job at the local level, we could 
really use some flexibility with regard to Federal funds. There 
are important Federal dollars being sent to the States, but the 
strings that are attached to those dollars frustrate our local 
educators in ways that are disproportional to the relatively 
small portion of Federal funds that we receive. So I know you 
will be getting a letter from the State superintendent of 
public instruction in the next few days. The Wyoming Department 
of Education has suggested that in reauthorizing the Elementary 
and Secondary Education Act Congress should consider using a 
block grant model similar to the provisions of the current Ed-
Flex Program.
    As I understand it, Ed-Flex is a process available to 
States in which they can waive certain Federal program 
requirements to make their use of Federal dollars more 
effective. So, one, I would ask is, if you would support that 
approach for certain schools, the exemplary schools, in 
reauthorizing No Child Left Behind?
    Further, what about a pilot project or a State-based 
demonstration project in a State that has kind of an exemplary 
performance and financial commitment standard to education, 
like Wyoming or other mountain States that are really well-
positioned to make a transition to see if it contributes to 
more efficient use of Federal dollars? And it would be easy to 
monitor in a State like Wyoming that has fewer students than a 
lot of urban school districts.
    And if not any of those ideas, how does the administration 
plan to facilitate flexibility and innovation at the State and 
local level? So those are certain questions with regard to 
flexibility.
    Then I am going to ask a fourth question and then just let 
you carry on. My next question is about the Federal Family 
Education Loan Program. Now, as you know, that bill that takes 
over student loans is hung up in the Senate, and there is only 
one 4-year university in the entire State of Wyoming, the 
University of Wyoming. It is one of those schools that is 
caught in the crossfire because that bill sitting over there, 
they know it is coming, so they assume it is going to pass. So 
the programs we do have are ramping down, not issuing new 
loans, and yet the program in the Senate hasn't passed. Are you 
aware that this is occurring, and do you have a plan to prevent 
a disruption of vital loan services for students if there is 
continuing legislative ambiguity?
    And once again, thanks for being here.
    Secretary Duncan. I really, really got a lot out of that 
visit. It was very, very interesting for me.
    Let me start on the last question first. If you can give me 
the name of that university or any universities you are 
concerned with, I am happy to have my staff reach out directly. 
And our staff is doing training around the country. And again, 
before we did anything, before any legislation, we have seen 
this huge increase in schools going to direct lending. 
Community colleges, 4-year universities--we will work very hard 
to help in any way we can. And the earlier we start to work on 
putting in place what we need to do for that transition, the 
better off we will be.
    So if you would give me the names of those universities, my 
staff will literally reach out to them today and sit down and 
walk them through what direct lending is like. And again, we 
have gone from 1,000 universities participating in direct 
lending to 2,300 over the past 3 years, before the new 
legislation even got here. And the vast majority have done 
this. You know, you haven't heard a peep. Very easy transition. 
So we will work--we will do training. We will do whatever it 
takes to help folks think this thing through.
    Mrs. Lummis. Thank you.
    Secretary Duncan. The larger issue is a huge one, and I 
actually agree with a lot of what you said that, you know, how 
do we provide flexibility? How do we make things less 
bureaucratic, less red tape?
    I would tell you, when we talk about going from 38 programs 
to 11, we are trying to make it easier for folks to apply to us 
and not apply to 50 different pots of money but have it much 
more consolidated. We did that. We think it is the right thing 
to do from our standpoint, spend less on administration, but to 
make it much easier to interact with us.
    Having lived on the other side of Federal Government for a 
long time, I lived those challenges. I know that. And so we 
want to to try and do less things. The things that we think are 
important, we want to do impeccably well, and so we are trying 
to narrow the focus and, again, make it much less bureaucratic, 
much less red tape, much easier and simpler for folks to 
interact with us.
    Two more points. In terms of innovation and great local 
ideas, that is what Race to the Top is all about. That is what 
the Investing in Innovation Fund is all about. We just want to 
put lots of money behind States and districts that can 
demonstrate--we are interested in two things: raising the bar 
for all children and closing the achievement gap.
    And where folks have innovative ideas and want to pilot 
something to push the envelope, there has never been this kind 
of opportunity. And I just repeat, the good ideas are never 
going to come from us; they are going to come from great 
educators at the local level. The extraordinary opportunity we 
have, and I think folks don't understand what a big deal it is 
yet, is we can put lots of money to take to scale what works, 
to scale up those best practices and invest in them.
    So we are just going to keep coming back: Race to the Top; 
Investing in Innovation; school improvement grants; the Promise 
Neighborhoods. It is going to be opportunity after opportunity 
for folks to put their best foot forward.
    The final thing I will say, and we haven't sort of gone 
into this, but as we think about reauthorizing ESEA, I think 
high-performing schools, high-performing school districts, 
high-performing States, we need to give them more flexibility. 
We need to reward them. We need to get out of their way. We 
need to share and learn those best practices.
    One of my challenges with the previous NCLB law is there 
seems to be about 50 ways to fail but very few rewards for 
success. And I think there are phenomenal schools out there. We 
haven't done enough to learn from them, to give them the room 
to innovate and create, to reward that success. And so I want 
to think about that, not just at the school level, but the 
district level and the State level. So if you took the top 10 
percent of schools in any State that are probably world class, 
how do we give them the room to move? If we took that top 10 
percent of districts, how do we give them the room to move? 
Those top 10 percent of States, say those five States where, 
again, we are seeing rapid progress in growth and achievement, 
reductions in dropout rates, more students going to college.
    There is just a wealth of knowledge and information that we 
are not capturing, and frankly, we are getting in the way 
sometimes. And we want to fundamentally change that. And we are 
really challenging folks to challenge us to think about, what 
are those set of incentives for a State or a district or a 
school that would help them go that extra mile because they 
want to get in that category?
    Mrs. Lummis. Thanks so much.
    Mr. Chairman, thank you.
    Chairman Spratt. Mr. Etheridge.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Thank you, Secretary Duncan, for being here this morning.
    Let me go a little bit different. I served as a State 
superintendent of schools in North Carolina for 8 years, and I 
have really been intensly interested in some of the questions 
this morning and testimony. I first ran for this office because 
people in this town wanted to abolish the Department of 
Education. Today they don't use those words, but they use a 
different tone, and they are talking about the same thing.
    You know, on the farm, we call that eating your seed corn, 
because if you do away with foundations, you are likely not 
going to succeed. And I happen to believe that improving 
opportunities for our children in our educational system is 
probably the best investment we can make. And you can't raise 
the bar unless you put the opportunity under the bar. And we 
get that backwards sometimes up here.
    Now, unbelievably, there are some of the same people who 
are talking about that again, but I am going to oppose that 
every step of the way.
    But I like your budget in some aspects, including the 
increase in elementary and secondary education, things we want 
to do, assuming we get the legislation at higher ed, because 
you need to have the vision where you want to get to if you are 
going to get there, as well as increased funding for improving 
school nutrition. I think one of the missed opportunities--we 
have got to not only work there, but we have got to work in 
physical education for children that we pushed out because of a 
rigid curriculum in places we don't have room for children to 
have physical education. And we have got the fattest generation 
we have ever had, and that is going to pay prices down the 
road.
    The restructuring, though, of Federal education programs 
proposals in the fiscal year 2011 budget may have some 
unintended consequences. Let me talk very specifically about 
the operation of the National Board for Professional Teacher 
Standards, because I think, if I am correct in this, we are 
talking about pooling things together and working for grants. 
That sounds good.
    However, the certification takes place in 50 States in 
isolated schools and rural areas and over 700 districts across 
this country. Under the new proposals, NBPTS will need to 
partner with States or districts to secure funding through 
separate competitive grants in order to receive Federal 
funding. And you and I know, it may take several years for 
those organizations to retool their infrastructure, some of 
them don't have good grant writers, and compete for grant money 
instead of the current direct funding system.
    I was interested in your definition of earmarks, because 
now we are talking about the Department of Education, in a 
competitive grant situation, having earmarks.
    Mr. Secretary, I would be careful how you use that word, 
because I think that is assuming, when committees have hearings 
and hear from practitioners, and they don't earmark but it goes 
through the Department for the Department to allocate, I think 
that is kind of hard to do.
    Let me encourage you to look at one area I think the 
Department needs to spend some time, some energy and resources 
on, and that is in best practices research. Every school system 
can't do that, but the Department of Education has the 
resources today with all the technology we have, that ought to 
be there.
    So my question to you, with time left, how will school 
districts that don't apply for or receive grants be able to 
fund teacher certification initiatives, the very thing that we 
really want to improve in the classroom?
    And I applaud you for your principal training program. I 
think that is critical. But at the same time, if we don't have 
the resources there, that doesn't get done either if we are 
doing it on a categorical grant. Because you and I know, having 
been there, the difference between a categorical problem and a 
grant problem. Grant programs go away real quickly when 
somebody changes and don't like the idea.
    Secretary Duncan. Great questions. And obviously, the 
leadership you provided there was pretty extraordinary, and I 
learned a lot from what you did. The most important investment 
we can make is in teachers and leaders, teachers and 
principals. And so the pool of money, this is important, we 
talk about consolidations, often folks frankly have used this 
before, like to put in cuts. Every place that we have 
consolidated, we have increased funding significantly. Let me 
just, on teachers and leaders----
    Mr. Etheridge. I am not arguing that point, Mr. Secretary. 
That is not my point.
    My point is, it is going to take a while to make the 
transition. What do we do for those folks that want to be 
funded? Because if I am a teacher sitting out in X high school 
in rural America, wherever it may be, and I have got to put 
together a pool of money to get a grant to do it, you know what 
is going to happen. They aren't going to do it, and we lose the 
initiative of what we want to get to. I think that is what I am 
trying to get to.
    Secretary Duncan. Well, I don't have easy answers to that. 
Let me sit down and talk with you and work that through.
    Mr. Etheridge. Please.
    Secretary Duncan. I am very, very cognizant of some of the 
unique challenges in rural communities. I talked about some of 
the things we want to put in place, whether it is a competitive 
advantage or a set-aside. We have been talking--very 
significant conversations--with national philanthropic 
communities to try and increase investments there. But we want 
to make sure that the good work that is happening has a chance 
to continue, so I am happy to further that conversation.
    Mr. Etheridge. Mr. Secretary, I would appreciate meeting 
with someone on your staff because I think that is a critical 
area. If we are going to improve teaching, we can't have it on 
an ad hoc basis. I think we have to have the funding level to 
do it. Because you know teachers, they don't get paid much. 
They are doing it on their time, and if we don't get the money 
to do that, I think it doesn't get done.
    Secretary Duncan. I absolutely agree.
    Mr. Etheridge. Thank you. I yield back.
    Chairman Spratt. Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman.
    I have said many times, Mr. Secretary, that if you think 
back to the folks that impacted your life in a positive way, 
for most people, next to your parents, it is probably a teacher 
or a coach you had along the way. Would you agree with that 
statement?
    Secretary Duncan. Absolutely.
    Mr. Jordan. And would you agree that next to parents, the 
individual probably most responsible for helping a child learn 
is that teacher in the classroom?
    Secretary Duncan. No question.
    Mr. Jordan. With that in mind, I mean, I have a wife who 
teaches. I have a brother who coaches at our local school, the 
same school my wife and I grew up in, our kids go to. I have a 
sister-in-law who teaches. And what I hear from them, and 
frankly some of the same teachers I had who are now teaching 
our kids, is they don't particularly care much for the State 
Department of Education, let alone the Federal Department of 
Education.
    They don't think that you guys do much to--a whole lot to 
help them in their role as being that key person helping that 
kid learn.
    So I want to just get a few numbers out here. And I 
appreciate your passion. You have called me up to answer 
questions that we had in this committee before. I appreciate 
that; appreciate your background. I know you have a genuine 
concern. And I assume you believe the folks that work for you 
have that same passion and concern for kids learning.
    How many employees does the Department of Education have?
    Secretary Duncan. About 4,000, sir.
    Mr. Jordan. And what is the average pay for those 4,000 
folks if you broke it down.
    Secretary Duncan. I think it's just over $100,000. We are 
by far the smallest Department, Cabinet Agency, by a pretty 
significant factor, and we have one of the largest portfolios 
in terms of responsibility.
    Mr. Jordan. Do you anticipate that 4,000--the number we 
have is 4,198--do you anticipate that number going up, down or 
staying the same over the next year?
    Secretary Duncan. It went down this past year. It may go up 
slightly this next year.
    Mr. Jordan. So you think there is going to be an increase 
in the number of employees at the Department of Education, yes 
or no?
    Secretary Duncan. Possibly.
    Mr. Jordan. And do you know what the average teacher's 
salary is across the country.
    Secretary Duncan. Yes, I do.
    Mr. Jordan. And what is that number? Do you know that 
number?
    Secretary Duncan. Somewhere between $45 and $55,000.
    Mr. Jordan. And so, you know, you would look at it from the 
teacher's perspective, and this is I think real; this is--you 
know, they see the huge increase that the Department has gotten 
over the last decade, our numbers show a 43 percent increase in 
the Department's budget; they see the $3.5 billion increase 
this year. They have this general kind of feeling about, as I 
said, not only the State Department of Education, but the 
national, the Federal Department of Education. So you got the 
teacher in the classroom that has the greatest impact on the 
kid making half of what the folks here in Washington are making 
who are telling the folks back home how to do it. That is the 
perception.
    And I think that is a real concern when you think about 
particularly the idea that the number of employees may 
increase, they are making twice as much as the teachers that 
are out there, and some of the numbers in the graphs that my 
colleague, Congressman Hensarling, put up for us all to see 
earlier. How do you respond to all that?
    Secretary Duncan. Let me give you sort of the history of 
this again.
    Mr. Jordan. Again, going back to what you said earlier. I 
think everyone in this room, everyone in the audience would 
agree; the teacher in the classroom has the biggest impact on 
the kid.
    Secretary Duncan. So our Department is down 16 percent 
since 2001, down 800 employees. Our Department, in terms of 
managing grants, each employee, if you average this out, is 
responsible for about $17 million in getting money out the 
door. We have by far the smallest Cabinet Agency by a 
significant factor. And so I would argue we are lean. Our staff 
is working in many cases literally staying up all night. You 
have not seen us drop the ball once on getting resources out 
the door.
    Mr. Jordan. Mr. Secretary, I gave you that earlier, again, 
you are passionate for what you are doing and the folks who 
work for you are professional.
    But here is--look at it from the perspective of the teacher 
and the fact that they don't think they get anything that helps 
them with the kid in the classroom. That is what I hear from 
them.
    Secretary Duncan. I understand that. I will just say that I 
think our staff has managed the opportunity we have 
extraordinarily well. We have made some mistakes. We will never 
be perfect. You have not seen us miss a beat. You have not seen 
a scandal. Our guys are working 24/7. The entire reason why--
let me finish.
    Mr. Jordan. I have got 40 seconds, and I want to ask you a 
couple more questions.
    Secretary Duncan. Just quickly, the reason folks are 
working so hard is because we want to get scarce resources out 
to teachers and out to schools. So if our staff hadn't got that 
ARRA money out, we would have seen 300,000 great teachers lose 
their jobs. If we don't get these competitive grants out, we 
are not going to empower those teachers who take their good 
ideas to scale.
    Mr. Jordan. I have got 20 seconds. Let me ask you this. 
Different subject, or somewhat different. What is the salary of 
Mr. Jennings, who works at the Department, Kevin Jennings?
    Secretary Duncan. I don't have an exact figure.
    Mr. Jordan. Can you give me an estimate? How many folks 
work in his Department?
    Mr. Skelly. Approximately $160,000.
    Mr. Jordan. How many folks work for him?
    Mr. Skelly. Approximately 44.
    Mr. Jordan. And what is their average pay?
    Mr. Skelly. The average pay for the Department is $105,000.
    Mr. Jordan. They are included in that 4,000 number, 4,198 
number?
    Secretary Duncan. That number includes everybody, yes, sir.
    Mr. Jordan. And the last question, if I could, Mr. 
Chairman.
    Who does Mr. Jennings answer to and who hired him? Does he 
answer to you, or does he answer to the President? And did the 
President hire him, or did Secretary Duncan hire him?
    Secretary Duncan. He is part of our team.
    Mr. Jordan. Who----
    Secretary Duncan. We hired him.
    Mr. Jordan. You hired him, and he answers to you.
    Secretary Duncan. He answers to our team. He doesn't report 
directly to me, but he is part of our management team, yes, 
sir.
    Mr. Jordan. Thank you, Mr. Chairman.
    Chairman Spratt. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair.
    Part of the challenge here is 5 minutes. And so I am going 
to kind of go through with what I have. I want to give you a 
chance to respond and not interrupt you. But if you don't get a 
chance to go through everything, please submit it to me in 
writing, and the Chairman and I will share it with the entire 
committee. Thank you.
    The first thing I want to talk about is competitive grants. 
Part of the philosophy behind a public education is to give 
every American a chance to succeed. And a lot of schools failed 
in that. We had segregation. We have--part of the reason why No 
Child Left Behind came forward is that we were failing 
children, failing children as a nation, as a community. And 
when we fail children, we fail our country, our workforce and 
our democracy.
    So I am concerned, however, about this big shift about 
going to competitive grants, because now that means school 
districts are going to be competing against each other for 
limited resources. States and local school districts are facing 
massive budget cuts, and there is a huge crisis out there 
looming in public education.
    Race to the Top grant competition: Minnesota received 
$250,000 from the Gates Foundation to be able to compete in 
even getting the grants filled out. In order for them to feel 
like they could compete effectively, they applied for Gates 
Foundation money, money that could have gone into the 
classroom. We have targeted needs and assessment values and 
tools which have been recognized nationally, but instead, we 
are out now spending money on grants. Now, that is the Gates 
Foundation; that is not even what the school districts put into 
it.
    And a lot of people back home in Minnesota think if 
Minnesota, quote-unquote, gets a Race to the Top grant, that 
all Minnesota students are going to be competing in the access 
to these dollars when in fact that is not true. It is different 
school districts, and it is one-time money, and when they might 
not even receive the grant. And I am on to the grant letter 
because those are the rules we have right now.
    But I am very concerned, Mr. Secretary, when I see more and 
more grant process going out the door about one-time money, and 
districts having now to hire grant money and scramble around 
finding dollars for grants.
    As a member of this committee, part of my job is oversight. 
Now, I didn't vote for No Child Left Behind because I want to 
leave children behind--I am a former classroom teacher--because 
I just didn't see how it was going to work. And you and I had a 
good discussion about that. And I realize here, again, you have 
inherited this apparatus. But I would like to know where you 
are with pushing for national standards so that we can compare 
apples to apples, especially now that you are going to this 
competitive grant process; you really don't have, in my 
opinion, a lot to compare.
    And then the final topic I would like to touch on very 
briefly is charter schools. I am a supporter of charter 
schools. Minnesota has charter schools. We audit our charter 
schools. We find fraud and abuse in our charter schools. And 
now we have our charter schools, which are supposed to be 
leased property, competing for rehab money for our antiquated 
and sometimes sick public schools. So I touched on a lot, I 
apologize, but I will be silent for the few minutes you have 
left.
    Secretary Duncan. I will try to be efficient in my answers.
    To be clear, the large formulaic grants we are never going 
to touch. Those will continue to be formulaic. So Title I money 
always is going to be formula-based. IDEA money, always going 
to formula-based, so that is never going to change.
    What we are saying is, where we have additional resources, 
we want folks working hard to put in place the reforms to get 
there. But I think folks that are concerned that, Title I, we 
are going to change something, IDEA, we are going to change 
something; I give you my word we would never consider that, 
never thought about doing that.
    Just that as we have new resources, additional resources, 
we really reward folks who are closing the achievement gap and 
raising the bar. To be clear, I think there has been a 
perception--I am not interested in fancy PowerPoint 
presentations. That is not going to win anybody any grant. We 
are interested in is folks who have had the courage and the 
commitment to get dramatically better results with children. 
That is all we care about.
    School improvement grants are going to go directly to 
States. Minnesota, I am just looking here, is going to get 
almost $29 million to turn around schools that are struggling. 
That is going to go directly to the State. And so we are trying 
to be creative here, trying to have a hybrid. But the large 
formula programs are always going to stay formula-based.
    On national standards, I think if they are Federal 
standards, if it is us driving this, this thing fails, it dies, 
because of the real and legitimate concern and interest in 
local control. What you are seeing, however, is you are seeing 
48 Governors and 48 school chiefs work together around college 
and career-rated standards and raise the bar. You see the heads 
of both unions supporting this actively. The business community 
has been crying out for this.
    So this is an idea whose time has come. And the leadership 
is not being provided by me or by Washington; it is being 
provided at the local level, which I think is a very, very good 
step in the right direction. What we are going to do as these 
folks come up with college-ready standards, to your point is 
you want to be able to measure apples to apples. That means you 
need good assessments behind those standards. Part of Race to 
the Top, we are going to put out $350 million to develop more 
thoughtful, more comprehensive assessments--not our 
assessments; we are going to leave it to the States to work 
together and drive this at the local level. So I think we can 
get where you want to go, but it has to be driven where it is 
now by State school chiefs, by Governors who are working very 
hard. And that coalition, collaboration, folks understand, the 
past hasn't worked. Dummied down standards due to political 
pressure hasn't worked. Lying to children hasn't worked. Seeing 
some of these students who actually graduate being unprepared 
and needing remedial classes in higher ed hasn't worked. And 
there is a huge amount of interest in pushing this thing going 
forward.
    Chairman Spratt. Mr. Yarmuth.
    Mr. Yarmuth. Thank you, Mr. Chairman.
    Secretary Duncan, welcome, and thank you for your 
presentation.
    I had the privilege of serving on the Education and Labor 
Committee in the last Congress, and I want to take this 
opportunity to respond a little bit just briefly to the 
demagoguery. We heard from Mr. Hensarling, who unfortunately 
has chosen to take his shots and then leave. And I think that 
whole historical and projection presentation he gave is 
interesting in light of the fact that the Bush administration 
passed NCLB and took great pleasure in it and pride in it and 
touted it all over the country and then proceeded to underfund 
it by tens of billions of dollars, in the process probably 
retarding the educational progress of half a generation of 
students throughout the country.
    So I applaud you for your concern, and I wish we got more 
interest from the other side in actually figuring out how this 
budget can best serve our Nation and our young people.
    Mr. Garrett mentioned that he has a LEARN Act. I also 
introduced a bill with a LEARN Act title, and it is probably an 
inferior acronym because it stands for Literacy Education for 
All Results for the Nation Act, but it is--while the acronym 
may not be better, I think the legislation is better. And it 
would essentially, as I would characterize it, take an 
analogous approach to the Race to the Top in making available a 
pool of money to fund experiments in the States for 
comprehensive literacy programs. You are consolidating a number 
of literacy programs into one area. Can you expand a little bit 
on how your plans for this consolidation would help develop 
more and effective literacy education in the country?
    Secretary Duncan. And obviously, those literacy skills are 
absolutely foundational. One of the things I found that was 
interesting when I was a superintendent was that many of the 
students who struggled on math assessments actually knew the 
math; they couldn't read the word problems. And so it is not 
just about literacy; it is about driving an entirely different 
ability level to function well in other curricular areas.
    And so when we talked about a well rounded education, we 
talked about $300 million for STEM. There is $450 million there 
for literacy. So we are making a huge investment. And again, to 
me, it is foundational. We can instill in our children a love 
of learning, a love of reading at an early age and help them 
become lifelong learners. We have got a long way to helping 
them to be successful. And so a major commitment there, and 
that is a huge piece of what we are calling a well rounded 
education.
    Mr. Yarmuth. Is your intent to kind of fund individual 
initiatives through this pool of money, or to essentially 
maintain some of these programs but from a more consolidated or 
coordinated effort?
    Secretary Duncan. And again, this is a give and take here. 
There are great, great programs there that may have had a set-
aside, or whatever the right word is, and now we are asking 
them to compete. So what we want is programs that can 
demonstrate to make a difference in students' lives. We want to 
take them through an entirely different level. So if you have a 
great literacy program that has been working with 1,000 
students, why can't it go to 2,000? If Teach for America has 
done a great job of X number of students, let's have Teach for 
America work for a whole other set. We want folks to 
demonstrate the difference it is making in students' lives. So 
it is not just about good ideas or good intentions, it is 
really about results for students.
    And we are looking for that in the curricular areas. We are 
looking for that when we talk about this next generation of 
great teachers. We looking for that--we haven't talked enough, 
again, this idea of principal preparation and getting great 
principals in I think is huge. So in all these areas, whether 
it is a local collaboration or a national consortium or 
whatever it might be, where you can demonstrate to us that you 
are, again, raising the bar for all children, closing the 
achievement gaps, there is an unprecedented opportunity for 
folks to take to scale great work in all of these areas.
    Mr. Yarmuth. A quick question on the accountability piece. 
And we dealt with this when we were working on NCLB in the last 
Congress. The question of performance and compensation based on 
performance and so forth. I think a lot of people may agree 
with it. I do with the concept. But one of the things that is 
characteristic of urban school districts, which I represent in 
Louisville, Kentucky, 100,000 strong--you come from that 
background--is a question of mobility. We have 50 percent of 
our students change schools at least once during the course of 
a school year, and a lot of teachers are basically teaching 
moving targets. How do you accommodate that within the context 
of an accountability system?
    Secretary Duncan. That is a great question. And Carmel 
Martin is here--where is Carmel, can you just raise your hand--
who is doing just I think an extraordinary job helping us think 
through how we reauthorize this thing. Again, build upon 
strengths and improve upon weaknesses. So let me give you a 
couple of concepts.
    Again, this is stuff that every day we are meeting with 
lots and lots of people and trying to get this just right. 
First of all, I am not interested in absolute test scores as 
much as I am in growth and gain, how much you are improving. 
Let me just give you a quick example. If you were a fifth grade 
teacher, and I came to you reading at the second grade level, I 
came to you three grade levels behind; if after a year of you 
teaching me, I was one year behind, under the old system, you 
are labeled a failure because you are still behind. I think not 
only are you not a failure; I think you are a great teacher. I 
improved as a student two years of growth for a year's 
instruction. That is what I am interested in.
    I am looking at how much are people improving. I think that 
levels the playing field. And every child--wealthy, poor, 
gifted, disadvantaged--every child should be improving every 
single year. That is what we are looking for. And so we want to 
focus on gain. We talk about incentives. I like incentives 
where every adult in the building is rewarded if you are 
reducing drop-out rates, if you are increasing graduation 
rates. If teachers are doing a phenomenal job, but so are the 
custodians, so are the lunch room attendants, so are the 
security guards. It is a culture of high expectations in that 
building, so really thinking about a team approach.
    On the issue of mobility, again, these things are pretty 
sophisticated, we are looking at growth or gain; we look at 
those students who started with you in September and finish 
with you in June. And if students are coming to you in October 
and leaving in February, of course you can't be held 
accountable for that. So there are ways in sophisticated 
measurements of controlling for all these things. And so these 
growth models, none of them are perfect. I think as a country, 
we should keep getting more and more sophisticated.
    The good ones measure like populations against like 
populations, so measuring English language learners against 
English language learners. So where a teacher has a student for 
a year, yes, we can look at them and look at them relative to 
other students of similar backgrounds. Where a teacher has a 
child for 2 months, of course you can't hold them accountable.
    I think the larger question then is for--it is a little bit 
off, but where you have children, we have this in every urban 
area, children that are in two and three and four schools every 
single year, how is that child ever going to be successful 
academically? So to me it is not, what is the teacher doing, 
but how does the district identify those families that are so 
transient? And how do we try and find a way to keep them 
stable? Often, in those types of families, they are just 
struggling to make it. School is the one source of stability. 
So how do we reduce those mobility rates? And that was 
something I struggled with and didn't always get right.
    So, again, it is not just what the teacher is doing, what 
the school is doing, what is the school system doing? If that 
child needs some additional support, if they need money for 
transportation, if they need to be tutored at home, whatever it 
takes, how do we reduce those levels of mobility because that 
is not good for any child?
    Mr. Yarmuth. Thank you.
    Thank you, Mr. Chairman.
    Chairman Spratt. Mr. Scott.
    Mr. Scott. Thank you. Thank you, Mr. Chairman.
    Mr. Secretary, just to emphasize the point you were making, 
the teacher that did 2 years in 1 year getting from the second 
to the fourth would be obviously an excellent teacher. Under 
present scoring in No Child Left Behind, where would the score 
be for that child?
    Secretary Duncan. That teacher would be labeled a failure, 
and that school would be labeled a failure.
    Mr. Scott. Because they are below grade level, although 
they did 2 years in 1 year, and that is why we need to make 
that change.
    Secretary Duncan. And the previous administration started 
to look more at growth models and started looking at 
improvement, and we want to take that into an entirely 
different level.
    Mr. Scott. Thank you.
    Just to start off, we have heard a lot about this budget 
deficit. I think one of the things in those charts that was 
left out was the fact that, when the previous administration 
started off, we were on target to paying off the entire 
national debt held by the public 2 years ago, 2008, zero debt 
held by the public.
    With the policies that started in 2001, the budget was 
wrecked. We ended up, this administration ended up inheriting a 
huge, explosive debt. The way to get rid of the debt is to 
increase taxes or reduce spending. We also, unfortunately, 
inherited a recession where you could do neither. So we are 
stuck in a situation where you cannot do anything serious about 
the deficit, and they got to put up a chart and blame this 
administration for it.
    We will have an opportunity because the recession is going 
to end, and we have got challenges. The long-term situation is 
complicated by the Baby Boomers retiring, Social Security and 
Medicare will be factors. States now are cutting back on short-
term, so we have a lot to do.
    We have made progress on higher education, as you have 
indicated. You talked about, we have a need, more need for 
college at a time when States are cutting back. We also have 
made progress with Pell Grants, Work-Study, improved student 
loans with reducing interest rates and income-based repayment 
for access.
    One area that we need to focus on is the completion. Fewer 
students--a lot more students are going, but fewer are 
completing. Do we have your commitment to support the TRIO 
programs that help students once they get to college to 
actually complete college?
    Secretary Duncan. Absolutely. And one thing we didn't talk 
about, if the SAFRA bill passes, is a $2.5 billion Access to 
Completion fund. So the whole focus of those unprecedented 
resources is to drive up completion rates.
    And your point is exactly right, Congressman. Our students 
can't just go to college; they have to graduate. If I can take 
one quick second. It is really interesting; many universities 
are not that dissimilar to high schools. You see students 
coming in of same ability levels and very different outcomes. 
Some universities do a great job of building a college 
completion culture; others sort of churn and burn, and those 
students don't ever get out. So we want to really make sure 
colleges are building a culture around completion.
    Mr. Scott. Thank you.
    And speaking of TRIO programs, we have talked earlier about 
the Upward Bound program several years ago and the 
reconciliation bill. We had funding that allowed 187 Upward 
Bound programs who are about to lose their funding to continue, 
they were given multi-year funding that ends. And there is a 
little complication because the fiscal year and the academic 
year do not strictly conform. And many believe that there is a 
need to deal with that this year. I think you have calculated 
that you can wait next year.
    I think, technically, the 2011 to 2012 school year, some of 
that actually falls into this budget we are working on now. 
However you calculate it, do we have your commitment that the 
187 programs will be continued and we will deal with the 
continued funding in the next year's budget, but they should 
not feel jeopardized at this point?
    Secretary Duncan. Absolutely. And I will reconfirm, but I 
am 99.9 percent sure that they have nothing to worry about this 
year. Those 187 have been saved.
    Mr. Scott. Thank you. You mentioned the dropouts and the 
achievement gap and dropout factories. Several of the dropout 
factories actually achieved adequate yearly progress, which is 
absurd to suggest that the half that are left in school 
actually achieved and ignore the fact that half of them dropped 
out. We have also--I think you have revisited the Achievable 
Dream program in my district that showed that we don't have to 
tolerate an achievement gap. Can you say a word about what the 
budget does for the dropouts and achievement gap, especially in 
the funding levels in Title I, but what the budget does to 
actually do something about dropouts and achievement gap?
    Secretary Duncan. I hope our entire budget reflects our 
absolute commitment to fundamentally reducing dropout rates and 
increasing the number of high school graduates who are college- 
and career-ready. So everything we are doing from early 
childhood education to K-12 reform, student supports, investing 
in creativity, all of those things are with a goal, the simple 
goal of raising the bar for all children and closing the 
achievement gap. So there are multiple, multiple programs. But 
the big picture strategy is that, as a country, we can't 
sustain a 27 percent dropout rate. Every single source of 
funding is towards that end.
    Mr. Scott. And how is the Title I funding?
    Secretary Duncan. Title I funding continues to be very, 
very significant. Again, we are going to maintain that as 
formula-based. About half that money from the Recovery Act is 
going to be available in the fall 2010, so there are very real 
resources there. And we are absolutely, as I said repeatedly, 
that is absolutely going to remain on a formula basis.
    Mr. Scott. Thank you.
    Chairman Spratt. Thank you, Mr. Scott.
    Mr. Schrader.
    Mr. Schrader. I appreciate what you are doing, Mr. Duncan. 
Big supporter of your initiative. You are going to take a lot 
of heavy hits along the way, and I hope you stand like a rock 
in the middle of the raging river and stand your course here.
    Competition in the grant stream I think is a great thing, I 
think it is a great thing, and let's get results.
    A couple of quick questions if I may. One is you talk about 
the Title I money and IDEA money staying in place. Will there 
be an adjustment for inflation going forward for those budgets, 
is that anticipated?
    Secretary Duncan. The IDEA is going up about $250 million, 
and with the Recovery Act, there is about an additional $11 
billion between the two for this next year.
    Mr. Schrader. And then as you have heard, there are some 
concerns about the rural areas being able to compete. Is there 
any consideration in setting aside a pot of money for rural, 
and somehow, and I don't know how to do this, but help the 
rural communities write grants?
    Secretary Duncan. Absolutely. Jim Shelton, who is in charge 
of our Investing in Innovation Fund, is spending a ton of time 
on this. I would be happy to have him follow up.
    So we are thinking about a couple of different ways to try 
and address this. One is a competitive advantage for our rural 
districts. Secondly is potentially a set-aside. Third is 
whether it is technical assistance. And then, fourth is we are 
working with national foundations to increase their investments 
in rural communities.
    And I obviously came from an urban environment, and I have 
tried to spend a disproportionate amount of my time this past 
year in rural communities, so I can really start to understand 
those issues better. So it has been a huge part of my ongoing 
education. And there are real challenges there, but I think a 
huge opportunity. And the fact of the matter is that the vast 
majority of districts are not urban. And so if we are serious 
about scaling up what works and taking to scale best practices, 
we have to play, we have to invest in rural communities.
    And so I give you my absolute commitment we are doing 
everything we can to give rural areas a chance to be successful 
here. And if you also want to talk through some of the details, 
Jim Shelton on my staff is helping us really think this thing 
through.
    Mr. Schrader. Thank you. With the ARRA money, there was a 
concern that in the school improvement fund concept that there 
were four set models you had to adhere to. Is that still going 
to be the case, or is there going to be a little more 
flexibility for other ways for schools to improve their 
situation?
    Secretary Duncan. We are going to be a little bit tough-
minded there. And what we are saying, this is the bottom 5 
percent of schools in the country. So we are saying to the 95 
percent, show us results, you get your maximum flexibility.
    But I will tell you, Congressman, my biggest concern is 
that, in far too many of these communities, these schools have 
struggled, not just for a year or 2 years or 5 years, but for 
decades. And I think when we fail to educate despite our best 
intentions, despite our hard work, we perpetuate poverty, and 
we perpetuate social failure.
    And so we are saying the one thing that we are not going to 
be okay with is the status quo. We are saying we need pretty 
fundamental and dramatic change. We are putting unprecedented 
resources behind this, $3.5 billion. Every State will have 
access to the money.
    Great teachers, we heard it repeatedly, great teachers, 
great principals make a difference in students' lives. How do 
we systematically get the best teachers and principals, the 
hardest working, most committed, to historically underserved 
communities, be that rural or inner-city urban?
    I have argued, and I sometimes get booed by students when I 
talk about this, I think we need more time; longer days, longer 
weeks, longer years. We have got to work harder. And I think 
our students are smart, capable, committed, can do anything. 
But if students in India and China are going to school more 
days than us, we are putting our children at a competitive 
disadvantage. I don't need another study to tell me about 
summer reading loss for disadvantaged students. Our children 
get to a certain point in June, and they come back in September 
further behind than when they left. How is that good for the 
child? And so we want folks to think very differently, again, 
on those schools that simply--you know, with the of best 
intentions and hard work--students, children, are not getting 
what they need to be competitive in today's global economy.
    Mr. Schrader. I am fine with that, Mr. Secretary. As long 
as you get good results, you would be open to other models that 
would get us where you want to be, it would seem.
    The last question is regarding the misguided highly 
qualified teacher rule. I hope you are going to look at that 
and make some modifications there.
    Secretary Duncan. Yes, short answer.
    And I would say one of the many good lessons I have gotten 
from the rural communities where you have a teacher who is 
teaching math and reading and social studies and science, it is 
a little bit hard to be on paper highly qualified. I am much 
less interested in paper credentials. I am much more interested 
in what we call highly effective. So you can have all the 
degrees in the world, but if your students aren't learning, I 
don't think you are effective. You could have relatively fewer 
degrees, but if your children, again, are making that 2 years 
of growth for a year's instruction, you are a phenomenal 
teacher. And so I am much more interested in looking at 
effectiveness.
    It is complicated. It gets very intricate how you measure 
that, and we want to get more sophisticated. But moving from 
what I call highly qualified on paper to highly effective based 
upon student achievement is directionally exactly where we want 
to go.
    Mr. Schrader. Thank you very much.
    I yield back.
    Chairman Spratt. Ms. Moore.
    Ms. Moore. Thank you Secretary Duncan for appearing.
    I just wanted to clarify something that you said to Mr. 
Schrader. Is it your testimony that Title I is not flat funded? 
It is my impression that it is flat funded.
    Secretary Duncan. It is flat in the budget, but it has an 
additional carry-over from ARRA of $5 billion, so there is an 
additional $5 billion for this upcoming school year, fall 2010.
    Ms. Moore. You mentioned in your testimony that the Access 
and Completion fund, when Mr. Scott was talking about the TRIO 
program, is that, access and completion dollars, are they 
available for the TRIO program?
    Secretary Duncan. Yes.
    Ms. Moore. So how does the TRIO program access those funds?
    Secretary Duncan. Well, they don't exist yet. That is part 
of the SAFRA bill that you guys have passed and the Senate has 
to pass it. But once that money becomes available, TRIO and 
other programs can absolutely compete for those dollars.
    Ms. Moore. Compete for the dollars.
    Secretary Duncan. Yes.
    Ms. Moore. As opposed to the regular funding stream.
    Secretary Duncan. They would keep the regular funding 
stream. This is additional, this is new money. This is 
additional resources that don't exist today.
    Ms. Moore. Okay. I really wanted to talk with you about the 
core values that helped you establish this budget. The third 
one you said was that you wanted to narrow the role of the 
Federal Government and sort of devolve some sort of decision-
making and responsibilities to the State.
    And I want to associate myself with the testimony of Betty 
McCollum, who laid out very clearly that the States have had a 
tremendous challenge in terms of creating equality of 
educational opportunity, historically.
    We talked, for example, about Title I, which is flat-
funded. And this has been a real basic sort of a program in 
dollars so that schools could exist. We talk about the grant 
programs that are now going to be more competitive. And, of 
course, the definition of charter schools will absolutely 
prohibit the public from chartering their own schools, is 
reminiscent of those schools that sprung up, these private 
academies, publicly funded academies after Brown v. Board of 
Education.
    So I was stunned to hear--how does that fit in with your 
notion that education is the civil rights issue of our time, 
when these are all programs that were developed, the Federal 
Government became more involved, in order to ensure civil 
rights of students? And, you know, you are talking about 
devolving this stuff back to the States.
    Secretary Duncan. What we are talking about is trying to 
make sure that every child has a chance to get a great 
education. And----
    Ms. Moore. How does every child have a great chance for an 
education when there are winners and losers in this? I mean, 
you could be in Chicago and be in a charter school that has won 
one of the Race to the Top grants that the Gates Foundation has 
funded or you could be in the gang school, a gang-infested 
school in Chicago and be a loser in a school that is flat-
funded for Title I.
    Secretary Duncan. Well, and this is important to 
understand, that our commitment to historically disadvantaged 
children, to poor children, has never been higher. So it is not 
just Title I money that those children in those gang-infested 
communities have access to. The school improvement grants are 
going to go to those historically underserved communities, $3.5 
billion----
    Ms. Moore. Are those grants or competitive grants?
    Secretary Duncan. Money goes to the State. I will tell you, 
Wisconsin----
    Ms. Moore. To the State. It is not going to go, 
necessarily, to those school districts, because States are----
    Secretary Duncan. It will go from the States to the 
districts. And the number for Wisconsin is $43 million.
    Ms. Moore. And what if the State wants to withhold that 
money from the school district, as we have seen in my State and 
in other States? And I think Mr. Doggett attested to that.
    Secretary Duncan. Right. Well, obviously----
    Ms. Moore. That is the very sort of problem that the 
Federal intervention during the civil rights era--and up until 
2009, my favorite President was Lyndon Baines Johnson because 
the Federal Government saw education as a civil rights issue.
    Secretary Duncan. And we will continue to intervene there--
--
    Ms. Moore. That doesn't seem to be the case.
    Let me ask you one question about TRIO, again following up 
on some of the things that Mr. Scott said. You know, there are 
consequences for flat-funding programs. There are 46,000 
students since 2006 that aren't going to be served because TRIO 
has been flat-funded.
    You said the core value, your second one was accountability 
in funding programs that work. TRIO works. Why didn't you put 
150 million more dollars into TRIO? It is a program--Pell 
Grants, there are 10 percent more students who are in TRIO 
programs who get Pell Grants that graduate than those with Pell 
Grants alone. Pell Grants alone will not help you reach your 
goal of graduating more students.
    TRIO works. So why was it that you flat-funded TRIO?
    Secretary Duncan. There are lots of programs that work 
that--again, with a $2.5 billion Access and Completion fund, 
that is a huge opportunity for programs that are helping 
students complete high school successfully, not just go to 
college but graduate. It is a huge opportunity for them to step 
up.
    Ms. Moore. TRIO students graduate, and they graduate to--
you made Pell a mandatory program. And the thing that really 
makes Pell work is when there is a nexus between it and the 
TRIO programs. And I am very disappointed that this 
administration doesn't see it.
    Also, you talked about HBCUs, wanting to help them. HBCUs 
are dependent upon TRIO dollars in order to have their students 
matriculate through those universities. And so, it is not 
inconsequential that you flat-funded TRIO. It is going to be a 
direct hit on HBCUs.
    Secretary Duncan. HBCUs have received an additional $98 
million in this budget. And over the next 10 years, there will 
be billions of dollars coming to those institutions through 
increased Pell Grants and Perkins loans. So we are going to 
work very, very hard----
    Ms. Moore. The Pell Grants will not help them unless they 
have the supportive services of the TRIO programs, which you 
flat-funded.
    Thank you, and I yield back.
    Chairman Spratt. Ms. DeLauro?
    Ms. DeLauro. Thank you, Mr. Chairman.
    I think my colleagues have made the point, and I will 
reiterate it. The issue is--and I think, Mr. Secretary, you 
said this early on in your testimony, in your commentary--the 
issue is that municipalities across the Nation, and school 
boards, are devastated people. That is what is happening in my 
district. I met with all my mayors and selectmen in the last 
several weeks, and their budgets are being put together, so 
they are having to let people go.
    How do municipalities across the country plan ahead with 
education budgets if they cannot rely on formula funding?
    The fact is that Title I and IDEA are flat-funded, they are 
frozen. And it would appear that all increased funding, K 
through 12, is going to be through competitive grants.
    The teacher quality State grants, there is a $500 million 
decrease in that?
    Secretary Duncan. Let me just correct you. On IDEA, they 
are actually up $250 million.
    Ms. DeLauro. But that is $250 million--the American public 
is right, it is a lot of money, but it is budget dust, you 
know, to quote one of my colleagues, I mean, $250 million 
nationwide.
    Secretary Duncan. Again, just to----
    Ms. DeLauro. Now you are going to mention ARRA to me 
probably.
    Secretary Duncan. $11 billion.
    Ms. DeLauro. I know. But I am just going to say this to 
you----
    Secretary Duncan. Half of that. It was about $22 billion 
together for IDEA and Title I. About half that is available.
    Ms. DeLauro. Without increases in Title I and IDEA in 
fiscal year 2011, this is the same time that ARRA ends, it's 
over. There is a cliff for our States. States, schools are 
already deep in a hole. They are going to be further in a hole. 
They cannot sustain that.
    And all of the increases are in competitive grants. I 
understand competition, et cetera, but I think we are looking 
at a very precarious economic time, and this direction doesn't 
seem to me to be the direction that we ought to be going in.
    And I want to ask about after-school. First of all----
    Secretary Duncan. Let me just----
    Ms. DeLauro. Sure. Make a comment, and then I have----
    Secretary Duncan. What we are trying to do here is, 
obviously, we want to drive reform. And these are very, very 
difficult economic times, and we are working as hard as we can. 
Again, I think we saved an extraordinary number of jobs this 
past year, and we are very, very proud of that.
    Ms. DeLauro. Amen. And so are the States, and so are the 
municipalities.
    Secretary Duncan. And I am very worried, I share your 
concern going forward on the jobs side. So that is a real 
concern.
    At the same time, again, we want to try and drive real 
reform. We have to continue to get better through good economic 
times and bad.
    Ms. DeLauro. Well, I would just say to you that, in so many 
other programs, what we are trying to do is to look at how we 
maintain something of a level going from ARRA to the next 
phase, because if you listen to any of the economists, the 
unemployment numbers are not going to drop very much. They may, 
in fact, increase some. My State is 8.9 percent unemployment.
    Teach for America, in my view--and I will just make this 
comment--not, in fact, an earmark. A program which has 
succeeded in increasing the rolls, an effective corps of 
teachers.
    Secretary Duncan. If I could----
    Ms. DeLauro. Let me throw this out, and then you can go 
ahead. I have 50 seconds.
    The after-school program--21st century learning centers--I 
understand it is to be transitioned to a competitive grant from 
formula-based, as well. Is that correct?
    Secretary Duncan. We have what we call Successful, Safe, 
and Healthy Students, $1.8 billion, a $245 million increase. 
There is $1.1 billion for after-school extended day. And, as 
you know, I am a big fan of after-school programming. An 
additional billion dollars that the President has talked about 
if we pass ESEA--a piece of that we want to go to increased 
after-school funding on top of that.
    If I could just--on the Teach for America, obviously, I am 
a big fan of them. What they had was a noncompetitive grant, 
and we expect them to be part of--you know, apply for i3, apply 
for these different opportunities. And----
    Ms. DeLauro. But that belies--and just a comment. If you 
have something that works--you may have a whole lot of things 
that don't work. So you want to deal in a competitive way so 
that you get performance. But if you have very good programs 
that are performing, high standards, et cetera, why do we want 
to put those in jeopardy? I don't understand.
    Secretary Duncan. We don't though. And if I could just say, 
what they have is an opportunity to go to an entirely different 
scale. And there are many good programs out there that are 
making a real difference. And through this they have a chance 
to help many more students than they are currently helping 
today.
    Ms. DeLauro. Thank you, Mr. Secretary.
    Chairman Spratt. Mr. Larsen?
    Mr. Larsen. Thank you, Mr. Chairman.
    Secretary Duncan, I don't know what excited people more 
this weekend when I was home--it wasn't me--but whether they 
were more excited about taking subsidies, taxpayer-funded 
subsidies out of the pockets of banks, or if they were more 
excited that we are going to take that money and put it into 
the pockets of moms and dads and kids who can't afford the 
higher cost of education. In other words, at least where I come 
from, folks are very excited about moving forward on student 
loan reform.
    And if you can outline for me just very quickly--because I 
talked Pell Grants, some other things--can you talk about, just 
quickly, what are the top five areas that these dollars are 
going to go to?
    Secretary Duncan. I appreciate people's huge interest. 
There is a staggering opportunity here. It is like a once-in-a-
generation opportunity, again, not going back to taxpayers, 
just putting a huge amount of resources into students.
    Let me, sort of, walk through this. As much as $87 billion 
in resources. Close to $10 billion we would put into early 
childhood education; huge chance to get dramatically better 
there. Tens of billions of dollars into Pell Grants; huge play 
there.
    We didn't talk enough today about community colleges. $10 
billion to strengthen community colleges. And as individuals go 
back to retrain and retool in health care jobs and green jobs, 
green energy jobs, tech jobs, we think community colleges have 
been this underutilized gem along the education continuum. So a 
massive investment there.
    Very significant investment in what we talked about, 
income-based repayment, reducing those loan payments on the 
back end and, after 10 years of public service, erasing them. 
And then the College Access and Completion Fund is a very 
significant investment. The final one is about $2.5 billion 
into HBCUs and other minority-serving institutions.
    So those would be major categories of investment.
    Mr. Larsen. That is good to understand better. Obviously, 
the Pell Grants is something a lot of us focus on. It is the 
number-one source of Federal financial aid, so it is easier to 
focus on.
    So, specifically on community and technical colleges, it is 
$10 billion. Anything that you can break down within that 
category?
    Secretary Duncan. Yes. Again, as you guys know, community 
colleges--there has never been so much interest. Most are 
seeing double-digit increases in students wanting to come back 
to retrain and retool.
    We, as a Federal Government, I don't think we have invested 
enough in community colleges. And we think building their 
infrastructure, making sure they can be nimble and, at the 
local level, creating those courses that lead to real jobs in 
that local community, online courses--there is a huge play that 
we can make to strengthen these institutions that have 
unprecedented interest but often don't have quite the capacity 
yet to serve well all those students who want to come back.
    And so we want to make a major play here. And I think as 
individuals go back and get back on their feet, the country is 
going to get back on its feet. And I think community colleges 
can play a huge role there.
    Mr. Larsen. On that point, any thought about how that 
investment connects with WIA reauthorization?
    Secretary Duncan. We have had great, great conversations 
with the Department of Labor, and we didn't talk enough about 
that. We didn't talk enough about the food piece with the 
Department of Agriculture. But we can't do any of this work in 
a silo.
    And so, as we think about WIA reauthorization, as we think 
about the Child Nutrition Act, we are working very, very 
closely with our counterparts in Labor, in the Department of 
Agriculture, and in other areas to make sure we are thinking 
collectively, holistically, about how best to maximize all of 
our work. So that is a hugely important play.
    Mr. Larsen. Yes.
    Just a note here. Harvard Business Review did an article 
last summer, talked about global competitiveness in the world. 
And it is really, you know--this is HBR, it is focused on, if 
you are business leader, here is what you need to be thinking 
about.
    But in terms of government and business, we need to be 
thinking about reversing the slide in funding in basic and 
applied science, focusing resources on solving the big ideas, 
the big challenges; in business, making capabilities the main 
pillar of a strategy for developing the skills that you need to 
be flexible; reinvigorating basic and applied research within 
business.
    And it just seems that all of these are really based on 
developing capabilities and skills and flexibility for people. 
And that means developing people, and that means giving people 
the opportunity to do the things that we are talking about, 
getting to higher ed, whether it is community or technical 
college or 4-year.
    And it is something that, because we are focused on the 
``now'' because of the job picture. But if we don't set that 
foundation for future economic growth, as well, we are going to 
lose an opportunity.
    Secretary Duncan. The President has drawn a line in the 
sand. He said by 2020 we have to again lead the world in 
percent of college graduates. I think many folks think we still 
do. And, in fact, we used to lead the world 2\1/2\ decades ago. 
We have flat-lined, and other countries have passed us by. And 
I think we are really paying the price for that today.
    And so every move, every strategy put in place is towards 
that end. We have to dramatically increase the percent of 
graduates from 4-year institutions, 2-year community colleges, 
trade, technical, vocational training. That has to be the goal 
for every single young person in this country.
    Mr. Larsen. Thanks.
    And, Mr. Chairman, if I just might say, I have had an 
opportunity to play basketball with the Secretary. And if he is 
bringing the vision on the court, his patience on offense, and 
his tenacity on defense to the Department of Education the same 
that he brings to the basketball court, I think we will be all 
right.
    Chairman Spratt. Mr. Secretary, Mr. Jordan has one 
additional question, if you could indulge us.
    Secretary Duncan. Absolutely.
    Mr. Jordan. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary.
    I just want to be clear. Earlier I asked you--4,198 
employees the Department has; you said that number may go up 
this year. But I just want to be clear. Isn't it true in your 
request--oh, you also said that, over the last decade, that 
number of employees has come down. But as I look at the book, 
your budget book, you are requesting an additional--isn't it 
true that you are requesting an additional 404 employees, which 
would, in fact, take the number of employees at the Department 
back to a higher level than you were at the start of the 
decade?
    Secretary Duncan. I think your numbers going forward are 
right. My numbers going back to 2001, it has been a reduction 
of 800. And so our numbers would still be below that from 2001.
    Mr. Jordan. In the book right here, it says, ``2001, 4,566 
employees.'' Based on your request for fiscal year 2011, you 
want 4,603 employees. 4,603 is actually more than 4,566.
    Mr. Skelly. And the big increase in 2011 is for the loan 
servicers. If we take----
    Mr. Jordan. I am not--I don't know where it is at. You 
know, you can say it is wherever you want.
    Mr. Skelly. It is important to have people to make sure we 
do a good job on collecting.
    Mr. Jordan. But put it in context. Again, Mr. Secretary, my 
point was, put it in context. The average salary at the 
Department of Education is $100,000, twice what the average 
salary of teachers is across this country. And you are asking, 
at a time when there is red ink everywhere, you are asking for 
404 additional employees at the Department of Education that 
most teachers don't think benefits them one single bit in the 
classroom.
    Mr. Skelly. The taxpayers would benefit because we would 
get additional funds back through the student loan program. 
That is the reason we have the big increase in staff, is 
largely because of student loans. If we are saving $87 billion, 
it is worth spending a couple hundred thousand.
    Chairman Spratt. That is the context. You are saving, by 
those additional employees----
    Mr. Skelly. That is right.
    Chairman Spratt [continuing]. $86 billion for 404 
incremental employees.
    Mr. Skelly. It is a small investment with a big return.
    Mr. Jordan. I think people would disagree with that, Mr. 
Chairman.
    Chairman Spratt. I will stipulate that.
    Anything further?
    Mr. Jordan. No. Thank you for your time.
    Chairman Spratt. Okay.
    Mr. Secretary, I have a letter for you, if you don't mind, 
about the Perkins loan program. And if you could designate 
somebody in your department as a contact with us, I would very 
much appreciate it.
    Secretary Duncan. Absolutely.
    Chairman Spratt. We would just like to go over some details 
with you.
    Secretary Duncan. Sounds great. I will have Bob Shireman 
from my staff reach out to you directly.
    Chairman Spratt. Today you get an A for proficiency and an 
A for patience, too. Thank you for your diligence, your 
forthright answers. We look forward to working with you on this 
budget.
    Secretary Duncan. Thanks for the thoughtful questions, and 
thanks for your collective leadership. It means a lot to me. 
Thanks for having me this morning.
    Chairman Spratt. Thank you. We are glad to have you there.
    [Question submitted by Mr. Boyd and Secretary Duncan's 
response follows:]
                 transition to 100 percent direct loans
    Mr. Boyd: You and other senior Department officials have said that 
because private and non-profit lenders would be allowed to compete for 
loan servicing work under a 100 percent Direct Lending regime, you 
don't expect much job loss to result from your plan to eliminate their 
role as originators of Federal student loans. I see it differently. The 
private sector is already servicing Federal student loans, so even 
assuming that more loans will be made in the future, your proposal 
directly threatens the jobs of those delivering the many services 
associated with originating the loans. In fact, I have reports from 
Sallie Mae this week that they will have to lay off at least 700 
people--many in my district--because of the pending transition.
    Given the importance of undertaking this kind of job-threatening 
change, what kind of studies has the Department undertaken to show 
exactly how many jobs will be lost by this proposal?

    Secretary Duncan: The Department, using a competitive process, has 
awarded contracts to four loan servicers--one of which is Sallie Mae--
to assist the Department in servicing Direct Loans. Based on their 
performance, each servicer has the opportunity to increase the number 
of loans they are initially allocated to service. Additionally, the 
Student Aid and Fiscal Responsibility Act provides $25 million in both 
fiscal years 2010 and 2011 to loan servicers as financial assistance to 
retain existing jobs.

    [Questions submitted by Mr. McGovern and Secretary Duncan's 
responses follow:]
                             arts education
    Mr. McGovern: One of the programs I care deeply about is VSA Arts. 
VSA Arts, founded in 1978 by Jean Kennedy Smith, sister to President 
John F. Kennedy, has been a highly successful program in bringing arts 
to school children with special needs. We all learn differently and 
having arts supplement learning has proven to be a highly effective 
method of teaching. While the President's FY 2011 budget proposal 
provides a generous overall increase in funding for the Department of 
Education, it combines funding for Arts in Education, where VSA 
receives its funding, with seven other small categorical programs into 
a State-based competitive block grant entitled ``Effective Teaching and 
Learning for a Well-Rounded Education.''
    Currently, VSA is the strongest, systematic funding stream to get 
arts to children with special needs, with affiliates in all 50 States. 
Working with State and local school districts, VSA is able to leverage 
$12 in private funds for every $1 of Federal funds. Without VSA, there 
is no way to get arts programs to children with special needs. All of 
these vital services, and the expansion of these services through 
funding leveraged by State and local agencies, could be lost if funds 
specifically targeted for VSA are eliminated.
    Is it correct that as the budget is currently written that the 
direct grant to VSA and to the Kennedy Center education programs would 
be eliminated if the President's FY 2011 proposal to consolidate these 
programs is adopted; and can you explain the reasoning behind 
consolidation?

    Secretary Duncan: Under the fiscal year 2011 budget request, direct 
grants to VSA Arts and the Kennedy Center would be consolidated under 
the proposed Effective Teaching and Learning for a Well-Rounded 
Education program. The Administration believes that the creation of a 
broader program would not only help to strengthen instruction and 
increase student achievement across the content areas but also provide 
States and districts with the financial resources and flexibility to 
identify how to best meet the needs of their students, including those 
with disabilities and English learners.
    Under this new program, non-profit organizations, such as VSA Arts 
and the Kennedy Center, working in partnership with one or more high-
need LEAs would be eligible to apply for competitive grants to support 
the development and expansion of new, promising instructional practices 
to improving teaching and learning in a range of subjects, including 
the arts. These grants could support such activities as providing high-
quality professional development, developing high-quality assessments, 
developing and implementing instructional materials aligned with State 
standards, and using technology in innovative ways, as well as efforts, 
in the arts and in other areas, to ensure that individuals with 
disabilities have a full opportunity to succeed academically.
                       ready to learn television
    Mr. McGovern: Mr. Secretary, I am concerned that the 
Administration's budget eliminated dedicated funding, through 
consolidation, for a program that has shown vast successes in both 
national and local approaches to education and literacy, Ready To 
Learn.
    Ready To Learn provides funding that assists in the scientific-
research that goes into programming on public television that has been 
proven to assist children in literacy and vocabulary. Aired on public 
television stations across the country, these programs, including the 
Emmy award-winning series Between the Lions, co-produced by my 
Massachusetts station WGBH, are widely-accessible and available. 
Additionally, Ready To Learn has provided funding for literacy outreach 
that directly benefits the under-served populations in these 
communities. Through reading camps and other initiatives, public 
television stations like WGBH have shown a capability for measurable 
success in childhood literacy. It disturbs me to think that this 
program, which is widely supported by Members of Congress, could cease 
to exist due to the consolidations proposed in the Administration's 
budget.
    I would appreciate it if you and your Department would carefully 
look at this program and its success before taking further action on 
eliminating its direct Federal funding.

    Secretary Duncan: Under the Administration's proposed consolidation 
of the Ready to Learn Television program, public telecommunications 
entities--such as the Public Broadcasting Service, the Corporation for 
Public Broadcasting, and others (including ``affiliate'' public 
television stations such as WGBH)--would be encouraged to compete for 
national activities funding in the Effective Teaching and Learning 
programs to continue many of the activities currently authorized under 
the Ready to Learn program, such as producing and developing high 
quality, digital educational content for children.

    [Questions submitted by Mr. Langevin and Secretary Duncan's 
responses follow:]
                             mental health
    Mr. Langevin: I am very pleased to see an overall boost in our 
education budget. If we want a strong economy and the best workforce 
for the 21st Century, we need to make these much needed investments in 
our students. I also agree that reauthorization of the Elementary and 
Secondary Education Act is essential to these goals. However, I do have 
concerns regarding the Administration's plan to consolidate 38 existing 
K-12 programs into 11 new programs. For years, I have led a successful 
effort to increase funding for the Elementary and Secondary School 
Counseling Program, which provides grants on a competitive basis to 
school districts to hire school counseling professionals or build up 
existing programs. For the 2007-08 school year alone, this program 
provided support services in 97 school districts in 22 States. Each 
time the amount for this program increases, it still does not meet the 
demand in applications.
    If this program is consolidated into the Successful, Safe, and 
Healthy Students Program, how will the funding be allocated?

    Secretary Duncan: The Administration remains committed to 
addressing student mental health issues and believes that school-based 
counseling programs offer great promise for improving prevention, 
diagnosis, and access to treatment for children and adolescents with 
mental health problems. Under the proposed Successful, Safe, and 
Healthy Students program, State educational agencies as well as Title 
I-eligible local educational agencies, by themselves or in partnership 
with one or more community-based organizations or local governmental 
entities, would apply for competitive grants from the Department. The 
Administration believes that a broader, more flexible approach, through 
which States and districts could address student mental health and 
related needs, including for school counselors, comprehensively (rather 
than through more narrowly targeted programs) will be more successful 
in building capacity and enabling States and districts to meet the 
educational needs of their students and improve student outcomes.
                           teach for america
    Mr. Langevin: Another program affected by the consolidation of 
funding streams is the successful Teach for America program. According 
to the President's Budget proposal, this program would be eligible to 
compete for funding under the Teacher and Leader Pathways Program. 
Teach for America's planning process includes hiring and allocating 
recruiters, selectors, teacher support and national staff and building 
the extensive infrastructure to support the corps. Teach for America 
needs sustained, reliable funding to grow to scale. The timing of the 
proposed grant competition would not allow Teach for America to grow in 
2011 or 2012, and they would be forced to reduce the size of the 
incoming corps. How do you propose to bridge this funding gap so that 
Teach for America can continue to grow and place effective teachers in 
the schools where they are most needed during this upcoming school 
year?

    Secretary Duncan: I appreciate the role that programs such as Teach 
for America play in helping districts recruit high-quality candidates 
to teach in high-need schools. Our budget request would consolidate 
several smaller, often overlapping, program authorities in order to 
leverage these funds to help States and districts create and expand 
high-quality pathways into the teaching profession, including 
alternative routes to certification such as Teach for America. Our 
request for Teacher and Leader Pathways would more than double our 
funding for teacher preparation to $235 million in fiscal year 2011, 
with an additional $170 million provided for the development of school 
leaders. Since 2001, the Department has awarded more than $45 million 
in grants to Teach for America, and we will soon award an additional 
$18 million in fiscal year 2010 funds to support the recruitment, 
selection, training, and placement of exceptional recent college 
graduates who commit to teach in high-need schools for 2 years. In 
addition to expanded funding for teacher preparation through the 
competitive Teacher and Leader Pathways program, Teach for America, in 
partnership with States and districts, is eligible to apply for other 
competitive grant programs such as Investing in Innovation and Race to 
the Top.
 transition to 100 percent direct lending and continued funding source 
                    for college preparation programs
    Mr. Langevin: Last year, I was proud to support the Student Aid and 
Fiscal Responsibility Act (SAFRA), which will help our students afford 
the price of college and prepare them for successful careers. Like 
SAFRA, the Administration's budget calls for the elimination of the 
Federal Family Education Loan Program (FFELP). In my home State, the 
Rhode Island Student Loan Authority (RISLA), which is a not-for-profit 
FFELP provider, has run a successful one-on-one college access program 
called the College Planning Center of Rhode Island (CPC). In the past 
six months, the CPC has helped over 4,100 students, a 25 percent 
increase over the prior year. The CPC helps Rhode Island students 
prepare their financial aid forms, helps high school students search 
and apply for college, provides free SAT test preparation class work in 
high need public school districts, and is working with several 
community based groups that work with youth and unemployed individuals 
to help them access a college education. The CPC also helped develop 
and supports the Latino College Access Coalition whose mission is to 
increase the number of Hispanics and Latinos who apply to and attend 
college. The CPC has also taken the lead on financial literacy efforts 
for high school and college students in Rhode Island by counseling over 
12,000 students. Knowing that RISLA's funding stream will change with 
the elimination of FFELP, how does the Administration's budget address 
funding for programs like the College Planning Center?

    Secretary Duncan: Under SAFRA, Congress provided $150 million for 
College Access Challenge Grants, up from $66 million in 2009. The 
purpose of the College Access Challenge Grant Program (CACGP) is to 
foster partnerships among Federal, State, and local governments and 
philanthropic organizations through matching challenge grants that are 
aimed at increasing the number of low-income students who are prepared 
to enter and succeed in postsecondary education. Under this program, 
States will have discretion in how these funds are used and Rhode 
Island could continue to support CPC through this program.

    [Questions submitted by Mr. Ryan and Secretary Duncan's 
responses follow:]
                              pell grants
    Mr. Ryan: The President's budget spends $307 billion over 10 years 
to reclassify Pell Grants as an entitlement; an additional $118 billion 
to raise the maximum grant amount; and another $69 billion to build in 
an automatic increase in the maximum award to 1 percent above 
inflation. If adopted, Pell Grants would become a nearly half-trillion-
dollar entitlement, $494 billion.
    What is the basis for the 1-percent-above-inflation figure; and why 
higher than inflation?

    Secretary Duncan: Since 1990 the purchasing power of the maximum 
Pell Grant has decreased from 44 percent of the cost of attendance at a 
4-year public university to 35 percent in the current academic year. 
With the cost of attendance continually rising and the maximum Pell 
Grant often left stagnating for years at a time, Pell Grants do not go 
as far as they used to toward paying for college. To build the educated 
workforce needed for the twenty-first century, citizens of all economic 
strata need to have the option of pursuing higher education. The 
President proposes increasing the annual maximum Pell Grant by 1 
percent over the Consumer Price Index (CPI). The final Student Aid and 
Fiscal Responsibility Act increased the maximum grant only by the CPI 
through academic year 2017-2018. This is a good start on rebuilding the 
buying power of Pell Grants.
             proposal to make pell grant funding mandatory
    Mr. Ryan: What is the rationale for requesting enormous increases 
to Pell Grants and converting them to an entitlement, while flat-lining 
other apparent Administration priorities such as Title I and IDEA 
funding and leaving them in the discretionary category?

    Secretary Duncan: The Federal Pell Grant program already acts as an 
entitlement program by guaranteeing students the grant amount for which 
they are eligible. The Department does not--nor does it have the 
authority to--reduce awards if the appropriation does not include 
enough funding. This results in back-filling funding shortfalls. 
Converting the program to mandatory is an acknowledgement of its true 
nature and a resolution to decades-long funding issues.

    Mr. Ryan: How are the Pell Grant increases paid for so that they 
will not increase deficits and debt?

    Secretary Duncan: The FY 2011 Budget includes proposals which will 
produce billions of dollars in savings through reform of the student 
loan programs. Many of these are included in the Student Aid and Fiscal 
Responsibility Act. The Office of Management and Budget has assured us 
increased costs related to the Pell Grant proposal are fully offset in 
the Administration's budget submission.

    Mr. Ryan: Without transferring Pell Grants into the mandatory 
category, would the President be able to do all of his proposed Pell 
Grant increases and still maintain his non-security discretionary 
spending ``freeze?''

    Secretary Duncan: The Student Aid and Fiscal Responsibility Act 
includes a mandatory appropriation of $13 billion to ensure adequate 
Pell Grant funding and to support the FY 2011 Budget proposal. The 
President remains committed to the non-security discretionary spending 
freeze.
projected savings associated with proposal to transition to 100 percent 
                             direct lending
    Mr. Ryan: The President's Budget estimates $43.29 billion in 
savings over 10 years from transitioning from the Family Federal 
Education Loan Program (FFELP) to Direct Loans by July 1, 2010. 
However, the savings estimate you use publicly is $87 billion over 10 
years.
    If transitioning exclusively to Direct Loans saves $87 billion, why 
doesn't the President's Budget use that number, and what accounts for 
the difference in the savings estimates between the Office of 
Management and Budget and the Congressional Budget Office for the same 
student loan policy change?

    Secretary Duncan: The total savings described in the FY 2011 
President's Budget proposal is $45.56 billion. This is $2.3 billion 
more than mentioned in the question, and the result of including 
projected FY 2010 savings. CBO has their own methodology and calculates 
their own baseline to determine savings estimates. Differences can 
occur between projections among agencies due to various interest rate 
scenarios, including interest rates paid by lenders or the borrowing 
interest rate from Treasury; or can even be a result of the timing of 
the estimate's release, which can create differences particularly 
related to subsidy or interest rate updates.
   safra (h.r. 3221)--use of the credit reform basis for estimating 
                      savings from direct lending
    Mr. Ryan: When scoring the savings from a complete transition to 
Direct Loans in SAFRA, the Student Aid and Fiscal Responsibility Act, 
CBO uses the 1990 Credit Reform Act, which calls for using a net 
present value calculation based on Treasury's discount rate. This law 
does not permit CBO to take into account market risk--the risk that the 
value of the loan will decrease due to changes in market factors. In 
this economic environment especially, it is critical to adjust for 
market risk to more accurately reflect how much a loan program will 
generate. That is why Congress has required that CBO apply it when 
estimating the cost of recent government loan programs such as the 
Troubled Asset Relief Program (TARP). Do you think we should apply the 
calculation that provides Congress with the most realistic savings 
estimate, and is applying market risk to the transition from FFELP to 
Direct Loans something the Administration has looked into?

    Secretary Duncan: The Administration believes using the current 
credit reform process as a cost estimation basis produces a reasonable 
savings estimate. The Administration and CBO consider current and 
projected economic conditions when estimating future events such as 
loan defaults and recovery, loan cancellations, and lender subsidies. 
Even the most conservative estimate performed by CBO shows a savings to 
the Federal Government of $40 billion when switching to 100 percent 
Direct Loans. The Administration has confidence in both its estimate 
and methodology.

    Mr. Ryan: Do you believe that spending $80 billion in the SAFRA 
bill is wise when the CBO Director has warned that $33 billion of the 
$87 billion in projected savings might not occur?

    Secretary Duncan: The Administration believes this is a cost-
effective measure which can achieve two important goals at once--
eliminating unnecessary subsidies to private lenders, and reinvesting 
dollars where they can be put to better use by supplementing and 
strengthening our Pell Grant and school improvement programs.
other funding issues: graduation promise grants and college access and 
                            completion fund
    Mr. Ryan: Two education programs in the President's budget are 
created in the mandatory category and then expire before the 10 year 
window ends: 1) the new Graduation Promise Grants, which abruptly ends 
after 5 years; and 2) the new College Access and Completion Fund that 
ends after 6 years.
    Why not request discretionary funding for these new pilot programs 
where the Administration and Congress can review their funding 
annually?

    Secretary Duncan: The Administration supported mandatory funding 
for Graduation Promise Grants and a new College Access and Completion 
Fund (CACF) because of the significant savings expected to be realized 
from the President's proposal to switch from the Federal Family 
Education Loan (FFEL) system to 100 percent Direct Lending.
    The Administration had hoped to be able to invest $3.5 billion over 
5 years to the College Access and Completion Fund to develop, 
implement, and evaluate new approaches to improving college success and 
completion, particularly for students from disadvantaged backgrounds, 
and another $1.2 billion to the Graduation Promise Grants program to 
strengthen high schools.
    The Administration supported both of these investments as part of a 
broader strategy to meet the President's goal of leading the world in 
the proportion of college graduates by 2020. We are pleased that most 
of the savings that were ultimately realized as a result of the 
enactment of the Student Aid and Fiscal Responsibility Act and the 
shift to Direct Lending have been allocated to programs that will 
enhance opportunities for disadvantaged students in higher education 
such as $35 billion over 10 years for Pell Grants.
             congressional oversight of mandatory programs
    Mr. Ryan: By proposing them as mandatory programs, won't they be 
largely immune from congressional oversight?

    Secretary Duncan: Although it is certainly true that, as mandatory 
programs, the CACF and Graduation Promise Grants would not be subject 
to the review achieved through the disposition of an annual budget 
request, the Department does provide the Congress with the same kind of 
information on program results for mandatory programs as it does for 
discretionary programs by including impact data and performance 
information in its Budget Justifications. Moreover, Congress has and 
uses other mechanisms such as hearings and external reviews by entities 
like the Government Accountability Office to exercise oversight over 
mandatory programs. The Congress also has the ability to address any 
problems through the enactment of additional legislation.

    Mr. Ryan: Do you intend to terminate these programs at the 
scheduled time?

    Secretary Duncan: Unfortunately, Congress has not funded either of 
these programs.

    [Questions submitted by Mr. Mack and Secretary Duncan's 
responses follow:]
    improving literacy through school libraries evaluation findings
    Mr. Mack: In January 2009, the Department of Education released the 
Second Evaluation of the Improving Literacy through School Libraries 
Program, which indicated that students attending schools participating 
in this program are performing higher on State reading tests than 
students in schools that do not take part in the program. Additionally, 
the evaluation stated that in schools that participated in the program 
in 2003-04, the percentage of students who met or exceeded the 
proficiency requirements on State reading assessments increased by an 
extra 2.7 percentage points over the increase observed among non-
participating schools during the same time period.
    Why has the Administration chosen to ignore its own evaluations and 
consolidate Improving Literacy through School Libraries with other 
literacy programs instead of increasing your investments in this 
effective program?

    Secretary Duncan: The Administration takes the findings of each 
evaluation seriously. The evaluation report you mention also stated 
that some or all of the score increase may be associated with other 
school reform efforts. Consequently, the report concluded that no 
definitive statement could be made about the effect of participation in 
the program on reading assessment scores.
    The Administration is proposing to consolidate the Improving 
Literacy through School Libraries and other programs so that States and 
local educational agencies can make more effective use of Federal 
literacy funding. Federal programs aimed at increasing literacy 
achievement have historically taken a fragmented approach, and the 
Administration believes State and local efforts will be more coherent 
and more likely to drive dramatic improvements in student achievement 
if they have a comprehensive pre-K-12 focus. Efforts to improve school 
libraries such as increasing library collections, opening facilities 
for longer hours, or providing professional development for school 
librarians could be part of these comprehensive plans.
    I should also note that the budget would increase the Federal 
investment in literacy programs, from $413.3 million in fiscal year 
2010 to $450 million in 2011.
           role of school libraries in world-class education
    Mr. Mack: In President Obama's State of the Union address he 
mentioned that a world-class education is the best anti-poverty 
program. What role do you see school libraries playing in a world-class 
education, and what is the Administration doing to promote school 
libraries?

    Secretary Duncan: The Administration values the presence of 
libraries in schools and recognizes their strategic role in making 
information available to all students, training students and teachers 
about how to obtain and make use of information, and increasing access 
for low-income students to technology and information. The President's 
FY 2011 budget proposes that a new Effective Teaching and Learning: 
Literacy program provide a means for States and districts to develop 
and implement comprehensive literacy efforts, including efforts that 
improve school libraries and library services. The budget would 
increase funding for literacy efforts from $413.3 million in FY 2010 to 
$450 million in FY 2011.
    The proposed program would provide competitive State literacy 
grants to State educational agencies (SEAs) in order to support State 
and local efforts aimed at implementing and supporting a comprehensive 
literacy strategy that provides high-quality literacy instruction and 
support to students from pre-kindergarten through grade 12. Improvement 
of school libraries and library services could be a component of the 
grant activities carried out in the States.
                    support for the information age
    Mr. Mack: In the President's FY 2010 budget outline, he stated ``To 
give our children a fair shot to thrive in a global information-age 
economy, we will equip thousands of schools, community colleges and 
universities with 21st century classrooms, labs and libraries.'' What 
has the Administration done to back up that statement that was made a 
year ago?

    Secretary Duncan: The Administration recognizes the importance of 
an advanced learning environment for every student. Instructional 
materials, equipment, and technology are central to meeting that need. 
The President's FY 2011 budget request for the Department of Education 
includes nearly half a billion dollars for the improvement of science, 
technology, engineering, and mathematics (STEM) education. The majority 
of this funding would flow through the proposed Effective Teaching and 
Learning: STEM program, under which State educational agencies and 
local educational agencies could use program funds for efforts aimed at 
improving STEM instruction. In addition, the proposed Investing in 
Innovation program would have a cross-cutting and cross-curricular 
emphasis on educational technology. Other programs included in the 
budget would also fund the purchase of 21st century instructional 
materials and equipment.
    In the case of community colleges and other institutions of higher 
education, the Administration has sought increased funding for 
institutions with large percentages of minority and disadvantaged 
students. In both the FY 2010 and FY 2011 budgets, the President has 
sought increased funding for programs authorized under titles III and V 
of the HEA, including historically black colleges and universities, 
tribal colleges and universities, Alaska Native and Native Hawaiian-
serving institutions, Hispanic-serving institutions, Native American-
serving nontribal institutions, Asian American and Native American 
Pacific Islander-serving institutions, and predominantly black 
institutions. This funding can be used to support the renovation of and 
improvement in classrooms, libraries, and laboratories, and other 
instructional facilities, including the integration of computer 
technology into instructional facilities.
       recruiting and retaining state-certified school librarians
    Mr. Mack: The school librarian performs the instructional role of 
identifying materials to be used with teacher-planned instructional 
units or by collaborating with teachers in planning instructional 
units. Research has shown that students in schools with State-certified 
school librarians tend to achieve higher average test scores. How will 
the Administration encourage schools to recruit and retain State-
certified school librarians?

    Secretary Duncan: The Administration's budget request and 
Elementary and Secondary Education Act reauthorization proposal would 
support States and local efforts to promote and enhance the education 
profession and improve the effectiveness of teachers, principals, and 
other educators (including, as appropriate, school librarians). Under 
the proposed Effective Teachers and Leaders State Grants program, 
States and school districts could use funds to recruit, develop, 
reward, and retain school librarians who help lead school efforts to 
improve student outcomes.
    The proposed Teacher and Leader Innovation Fund would also help 
support States and LEAs in improving the effectiveness of the education 
workforce, including school librarians, by creating the conditions 
needed to identify, recruit, prepare, retain, and advance effective 
school leadership teams in high-need schools.
    The Effective Teaching and Learning: Literacy program would provide 
competitive State literacy grants to State educational agencies (SEAs), 
or SEAs in partnership with appropriate outside entities, in order to 
support State and local efforts aimed at implementing and supporting a 
comprehensive literacy strategy that provides high-quality literacy 
instruction and support to students. Local education agencies could use 
their grant funds to expand their library collections, open their 
school libraries for longer hours, or provide professional development 
to school librarians.
                      funding for school libraries
    Mr. Mack: In elementary schools that have a certified school 
librarian, students have significantly higher achievement scores on the 
fourth grade ELA test. What is this Administration doing to ensure that 
school libraries are fully funded and there is a school librarian in 
every school in American?

    Secretary Duncan: The proposed Effective Teaching and Learning: 
Literacy program could support the expansion of school or classroom 
libraries, increases in library collections, the opening of library 
facilities for longer hours, and the provision of professional 
development to school librarians.
         public libraries in early childhood education programs
    Mr. Mack: Research studies show that reading for pleasure is one of 
the building blocks for young people to grow into healthy, productive 
adults. Public libraries can play a major role in helping children 
develop a habit of reading for pleasure. What will you do to include 
public libraries in your early childhood education programs?

    Secretary Duncan: The Administration recognizes the importance of 
public libraries and the opportunities they provide for the provision 
of educational services, including for young children and their 
families. Under the proposed Effective Teaching and Learning: Literacy 
program, local grantees could partner with public libraries to further 
the implementation of an LEA's comprehensive preK-12 State literacy 
plan, which could include providing services and programs targeted to 
preschool-aged children.

    [Questions submitted by Mr. Aderholt and Secretary Duncan's 
responses follow:]
                            charter schools
    Mr. Aderholt: Not all States currently allow charter schools within 
their education system. It is my understanding that States which allow 
charter schools will be more competitive in qualifying for Federal 
education funds through the Race to the Top program. If a State decides 
to allow charter schools, would it make them more competitive after one 
year of such approval or is more time needed?

    Secretary Duncan: The Department is judging applications for Race 
to the Top based in part on the extent to which the State has a charter 
school law that does not prohibit or effectively inhibit increasing the 
number of high-performing charter schools, as well as the extent to 
which the State enables LEAs to operate innovative, autonomous public 
schools other than charter schools. States are also required to 
demonstrate whether their charter schools receive equitable funding and 
equitable access to facilities, and whether they have closed or not 
renewed ineffective charter schools; to gain maximum points against 
this last criterion, a State would need to have had a charter school 
law in place for enough time to have made such accountability possible. 
In short, we do not expect that States that have had laws in place for 
longer periods of time will be at a significant advantage as compared 
to States with newer laws, assuming that the laws are similar in 
nature.
                     performance-based compensation
    Mr. Aderholt: In your testimony, you stress the need for 
accountability in our education system. Do you believe that 
performance-based pay can play a role in creating accountability in our 
schools; and do you believe performance-based pay should be encouraged 
in school districts around the country?

    Secretary Duncan: As States and LEAs seek to increase educator 
effectiveness by aligning their approaches to recruitment and 
placement, preparation and certification, induction and development, 
and retention and advancement of effective teachers and leaders, 
compensation systems that reward teacher contribution can reinforce 
these efforts.
    For example, compensation reform can be an important tool in 
efforts to attract effective teachers and leaders and build strong 
instructional teams in high-need schools, to create robust career 
advancement systems for teachers and other school leaders, and to 
create more effective professional development systems. Because of the 
interconnectedness across each of these areas, it is important to think 
of them in a coherent, integrated way, with emphasis consistently 
placed on approaches that measure, support, and reward teachers and 
school leaders based on their effectiveness in delivering improved 
student outcomes and that support educators' efforts to improve 
throughout the course of their careers.
                   teacher and leader innovation fund
    The proposed Teacher and Leader Innovation Fund would build on the 
strengths of the Teacher Incentive Fund and support compensation 
reforms and complementary reforms of teacher and principal development 
and evaluation, teacher placement, and other practices.
    The Administration has requested $950 million for the Teacher and 
Leader Innovation Fund for fiscal year 2011. This program would help 
support States and school districts in improving the effectiveness of 
the education workforce in high-need schools by creating the conditions 
to identify, recruit, prepare, retain, and advance effective teachers, 
principals, and school leadership teams in those schools. Grantees, 
selected competitively, would use funds to reform teacher and school 
leader compensation and career advancement systems, improve the use of 
evaluation results for retention and compensation decisions, and 
implement other innovations to strengthen the workforce.

    [Whereupon, at 12:25 p.m., the committee was adjourned.]

                                  
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