The difference is that Texas has direct control over its standards and tests, whereas the federal government exercises indirect influence, so it has to rely on states and localities to actually go in and reform failing schools. While each school district would have this imposing federal enforcer looking over its shoulder, it would also be given a lot more freedom. Along the way, a lot of the strings attached to those subsidies will be cut. For example, federal subsidies designed to reduce class size mandate that districts hire more teachers. Under the Bush plan, it looks like the district will be given that choice.
Federal programs restrict how much bilingual education money can be spent on English immersion.
Under the Bush plan, it looks like districts will be able to make their own decisions about bilingual ed. In other words, the Bush administration is willing to use federal power aggressively, but mostly in a specific area, in measurement and enforcement. The Bush plan would devolve more pedagogical power to the states and localities. Still, it's hard to be confident that this will dramatically improve schooling for America's underprivileged kids, let alone for middle-class kids who will be largely untouched by this program. It's been three decades since the public education monopoly first promised to, in effect, leave no child behind.