Among the dozens of alphabet-soup agencies that Ronald Reagan came into office pledging to rein in, the Department of Education stood out as the object of a special animus. Its establishment was one of the landmarks of the departing Carter administration. The bill creating the department had passed the house by only four votes in 1979, almost being derailed by an unusual coalition of the New Right, the Washington Post, the 600,000-member American Federation of Teachers, Catholic educators, and... Ronald Reagan.

On the 1980 campaign trail, Reagan returned often to the theme of an overbearing federal education bureaucracy. Education, he insisted, is the responsibility of states and local school boards. The Department of Education was "President Carter's new bureaucratic boondoggle." In tune with the Republican Party platform, Reagan vowed to dismantle it if elected.

Three years later, in December 1983, Secretary of Education Terrel Bell stood in triumph before a cheering crowd of 1,700 career educators in Indianapolis, celebrating the recommendations of the National Commission on Excellence in Education. In its widely publicized report, A Nation at Risk, the commission called for such "reforms" as a longer school day and higher teacher salaries, without, however, noting how much the recommendations would cost. The National Education Association estimated the proposed reforms might require $23 billion a year in added state and federal aid.

The schools would be saved, Bell told the enthusiastic crowd; he implied that no longer would educators fear budget slashers. The United States was entering "a new era in American education... our finest opportunity in decades. We must not fail to bring it to full fruition."

And as 1984 dawned, Terrel Bell's department gave every sign of having become an entrenched bureaucracy. Each year, its budget resists shrinking in spite of much-touted streamlining and savings; what is taken from one budget area with the right hand is lavished on another with the left. The department weathers scandals with scarcely a dent in its image. Audits have turned up likely misspending of federal education grant monies by Jesse Jackson's PUSH-EXCEL program, but the department has managed to sit on politically sensitive details of those audits that we turned up in our investigation. We discovered that in another case, the department is laying plans to refund a research institute closed down in 1982 under the cloud of another spending scandal. And now Terrel Bell is dreaming of getting his department into a new product line that would guarantee the Education Department a spot in the political sun for many seasons to come.

The department slated for extinction has staged a remarkable turnaround. The story of how it happened is a story of how skillful bureaucrats operate in Washington, D.C.

In the heady euphoria that surrounded the Reagan entourage after their landslide 1980 victory, Edwin Meese III, Reagan's closest aide, had seen no need for the "new era" in federal education policy that Terrel Bell would later celebrate. Meese publicly called the Department of Education "a ridiculous bureaucratic joke" and privately, according to one of our sources, said that the only question left unanswered about its fate was "whether we should give the bureaucrats inside a warning before we blow the place up."

The selection of a cabinet secretary to head the department was delayed for six weeks as candidate after candidate demurred. Few wanted to captain a vessel bound for the breakers. According to Fred Barnes of the Baltimore Sun, Meese and personnel recruiter Pendleton James became desperate. Presidential pollster Richard Wirthlin suggested they look up his old friend from Utah, Terrel Bell, who had served as commissioner of education at the old Department of Health, Education and Welfare (hew) under Richard Nixon and Gerald Ford.

James and Meese were in California and scheduled to fly back to Washington. With time running out, they flew Bell from Utah to the San Diego airport where they were about to board a plane heading east. After a hurried 30-minute conference in the airport terminal, they agreed to recommend Bell to the president.

Less than two weeks before the inauguration, Bell was finally named to the cabinet. He breezed through his confirmation hearings, with minimal sniping from Reagan critics. Small wonder, since in many respects he was an odd choice for the Reagan administration.

A lifelong professional educator, Bell had for years been a champion of a clearly defined, albeit limited, role for the federal government in education. Incredibly enough, in the Carter years he had actually testified before a congressional committee on behalf of creating the Department of Education, the agency he was now assigned to abolish.

Or was he? Shortly after his nomination, Bell met with reporters and was asked what plans he had to work himself out of a job. He replied that in his meeting with the president, neither Reagan nor his aides had suggested disbanding the department-they had only asked him to study the matter and propose how the federal education bureaucracy should be structured in the future.

The political appointees who had been brought into the department, however, were not at first content merely to "restructure" the bureaucracy. Some wanted to "defund leftist groups" (and subsidize conservative ones instead). Others were out to perform radical surgery and abolish their own jobs.

Dozens of conservatives had been recruited into the department by such appointees as Susan Phillips (sister of Conservative Caucus leader Howard Phillips), Charles Heatherly of the Heritage Foundation, and Daniel Oliver, a former executive editor of National Review. They were told that plans for abolishing the department were being readied.

"The game plan was that this was an 18-month hit-and-run assignment," recalled Scot Faulkner, one of the disillusioned recruits who ultimately left the department and was willing to talk to us. "We would spend six months tightening the place down, six months pushing the abolition bill through Congress, and six months shutting the place down." Faulkner said he was even given a timetable for the department's demise: January 1, 1984, was to be D-Day (D for Demolition).

Many appointees had extensive experience in management or academia that they intended to use in paring down the department. Jim Lombard, a successful Florida businessman who became administrator for management services, described his forthright administrative style. "I would hold staff meetings with the career bureaucrats, and just to let them know things were going to be shaken up I would leave a dynamite plunger in the center of the table," he recounted.

Once, a career bureaucrat who had supervised dozens of employees attended, said Lombard. "His eyes opened wide as saucers and he asked, 'Is this an indication of your new management policy?' I replied, 'I'm afraid so.' The guy mumbled something and left shortly afterward." When we asked Lombard why he departed after only seven months on the job, he explained, "I was completely frustrated and realized I was not getting anywhere."

A number of conservative appointees recounted incidents that illustrate their initial zeal to dismantle the department. One said he was asked if he planned to pursue more RIFs (reductions in force), the government's euphemism for layoffs. "I said no, that we would instead be engaged in RWFs-reductions with force." Another appointee recalled, "Every time I was able to can a consultant, his personnel file would go on a spike mounted behind my desk-what I called my trophy wall."

Zeal soon gave way to frustration, however. One conservative detailed how the career bureaucrats worked to hold up his plans. "As we got into the guts of my operation, we heard screams of pain. We could have gotten rid of almost everyone there. Their counterattack was to tie my people down in meetings. We constantly heard complaints from the bureaucrats that we weren't 'interfacing' with them enough."

Meanwhile, in his first year in office the new Education secretary spent his time, not on Reagan's promised dismantling, but on rescuing the department from David Stockman's budget slashers.

The Office of Management and Budget (OMB) proposed to cut Bell's department by 30 percent, apparently taking Bell by surprise. "He knew the philosophy and the platform, and he was prepared for budget cuts," one close associate told the Washington Post. "But no one would have predicted the cuts would be so deep." Bell proceeded to make sure they wouldn't be so deep.

The administration finally asked Congress for $13.5 billion for the Education Department for fiscal 1981, $2.1 billion less than the Carter administration had advocated before it left office but only $600 million lower than the department's allotment of the taxpayers' money in fiscal 1980. Congress went along with cuts in some programs but increased funding for others. The final departmental budget was $14.8 billion, slightly more than the previous year's spending.

The Washington "educational-industrial complex" was of two minds over Terrel Bell. Many privately considered him a traitor to the cause, a "former" public educator who had joined an administration hostile to the department they'd fought so hard to establish. Others believed that Bell only reluctantly defended budget cuts of which he largely disapproved. "Anybody concerned about education should be grateful Ted Bell is down there," Rep. Paul Simon (D-Ill.), chairman of an Education and Labor subcommittee in the House, told the Los Angeles Times. "I'm sure it's tough on Ted," seconded Robert D. Benton, Iowa's chief school administrator and an old friend of Bell's. "Many of the things being dismantled were put into place at his urging or when he was in authority before."

In August 1981, Bell unveiled his long-awaited plan to "dismantle" the Department of Education. The agency, he proposed, could be transformed into a "national educational foundation" similar to the National Science Foundation. The foundation would keep most of the Education Department's major programs, although cutting its budget to $8.8 billion for fiscal 1982. Another $1 billion in programs would be transferred to other agencies. Congress couldn't have been less excited, and one department official told us privately it was "a half-baked idea." It quickly died.

However, even conservative critics of Bell concede that little could have been done in the face of obstinate congressional opposition. The Senate Labor and Education Committee, although chaired by Republican Sen. Orrin Hatch of Utah, included such liberal Republicans as Sen. Lowell Weicker of Connecticut and Robert Stafford of Vermont. Stafford at one point accused Reagan of wanting to have "the federal government turn its back on the nation's schoolchildren." "After the blitzkrieg of the first few months, it became trench warfare with Congress," one administration lobbyist told us. "Nothing was going to get past those guys unless it had a full-court White House press behind it." And that it didn't. Several conservative appointees went to the White House with their concerns. According to one, "We begged and pleaded for support in shutting the place down. It never materialized. They coddled us and said it wasn't on their list of priorities."

Finally, in May 1982, one frustrated appointee-Edward Curran, director of the National Institute of Education, the department's $50-million-a-year research arm-tried to take his concerns directly to President Reagan. He wrote a letter to Reagan in which he urged the immediate abolition of his grants-making agency, which he characterized, according to our sources in the Department of Education, as "wasteful and unnecessary" and ideologically tilted toward the left. Curran obtained a secret mail code used to route letters to the president's personal attention and dispatched his appeal. However, Curran deputy Larry Uzzell informed us that the letter was intercepted by Richard Darman, top aide to White House Chief-of-Staff James Baker. "Darman was instrumental in creating the National Institute of Education when he was working for Nixon's HEW secretary, Eliot Richardson," Uzzell told us. Darman alerted Bell to the transgression, and Curran was fired a few days later. There is no evidence that President Reagan ever saw Curran's letter.

While would-be dismantlers left or were told to leave the department, Bell continued his behind-the-scenes lobbying against budget cuts and vigorously defended his tenure in informal speeches before education groups. In one speech before the Council of Chief State School Officers and the National Association of the State Boards of Education in March 1983, Bell said, "I've been raising my voice for a moderate position with respect to the budget and with respect to the federal role... I haven't been for abolishing the federal role, as many feel to abolish the department means."

And Bell was doing more than helping Congress keep Education spending high. At the same time as he floated the proposal to create a "national education foundation," Bell had suggested naming a commission to examine the status of American education. Bell outlined his plans in a four-page memorandum, dated July 6, 1981, which was sent to Craig Fuller, director of the White House's Office of Cabinet Administration. The Reagan team, Bell intoned, must "call attention to an alarmingly persistent decline in quality education." He reassured the White House that the commission would not ask for increased federal expenditures or an expanded federal role in education. He emphasized that reduced federal rules and paperwork would be "one means of enhancing quality in our schools."

With such assurances, the White House gave the go-ahead and even let Bell select most of the members. Overall, they represented a who's who of the national educational establishment: A. Bartlett Giamatti, president of Yale University; Nebraska Education Commissioner Anne Campbell; lobbyist Robert Haderlein of the National School Boards Association; and, as chair of the commission, David Gardner, then president of the University of Utah and now president of the University of California system.

Almost all the members strongly opposed Reagan's call for abolishing the Education Department. "Haderlein's sole concern on the commission seemed to be to squash any mention of or support for tuition tax credits," former Education official Larry Uzzell told us. "Indeed, tax credits were conspicuous by their absence from the report."

When the commission's report, A Nation at Risk, was finally released in April 1983, it sounded the apocalyptic note now familiar to Americans, declaring that "the educational foundations of our society are presently being eroded by a rising tide of mediocrity." Yet as Hugh Joseph Beard, former deputy general counsel at the Department of Education, observed, it "criticized the methods but not the structure of the educational status quo."

The report remained silent on whether the Department of Education should be abolished. Meanwhile, it recommended "federal leadership" in a host of areas, including: "the needs of key groups of students such as the gifted and talented, the socio-economically disadvantaged, minority and language minority students, and the handicapped... collecting data, statistics... supporting curriculum improvement and research on teaching learning, and the management of schools, supporting teacher training in areas of critical shortage of key national needs." As Larry Uzzell pointed out to us, "The commission's areas of federal responsibility coincide exactly with the current mission of the Department of Education."

No dollar amounts were attached to any of the commission's recommendations, leading former department official Scot Faulkner to remark to us that "a Jesuit could say that the commission kept Bell's promise not to push for more money, but every page had dollar signs all over it." Denis P. Doyle, an education specialist with the Washington-based American Enterprise Institute, estimated "conservatively" that it would cost $13.5 billion to implement the most talked about commission reforms such as higher teacher salaries and a longer school day.

President Reagan tried to put the best possible face on the commission report. At a White House ceremony the day the report was issued, he announced that he would "continue to work in the months ahead for passage of tuition tax credits, vouchers, educational savings accounts, voluntary school prayer and abolishing the Department of Education"-none of which had been mentioned in the commission report.

Bell himself considered the report a "major victory." One Department of Education source said that the secretary "feels better about this than anything he's done since he came to town." As well he might. The report catapulted education several notches up the administration's list of priorities, and for several weeks much of the White House was engaged in "damage control" to rebut charges that heartless budget cuts had alone created the scholastic desert depicted in the report.

The emergence of education as a national issue also apparently induced Reagan to all but abandon any thought of abolishing Bell's job. "I've talked it over with the President," Bell told the New York Times. "And we're not going to be pushing for that, at least through 1984."

White House staff members went further in background briefings, saying there was "no question" that abolition was a pipe dream. "As long as the Department of Education is there, let's reprogram it-keep the department but change the agenda," one said. When reporters in June 1983 asked White House spokesman Larry Speakes if Reagan still wanted to kill the department, the reply was, "I wouldn't assume it either way."

Bell luxuriated in his new importance: rides on Air Force One with the president, appearances on Meet the Press, and standing ovations from the same groups that had previously scorned him. He also felt confident enough to disobey direct White House instructions and replace his general counsel, Daniel Oliver, while Oliver was on vacation in Greece. A former editor at the conservative magazine National Review, Oliver had pursued an agenda at the Department of Education that often proved a thorn in Bell's side. Prior to his ouster, Oliver drafted a memo upholding the view that the National Institute of Education was legally under the control of the National Council on Educational Research, which had been packed with conservative appointees such as chairman George Roche, president of Hillsdale College.

Contrary to Bell's wishes, Oliver wanted NIE operations to be directed more closely by the conservatively inclined NCER.

When the White House ordered Oliver restored after Bell had dismissed him, Bell threatened to resign and refused to go to work as long as Oliver was in the building. "The Secretary went home for two and a half days," one aide told a reporter. Oliver left and Bell returned. When asked about such ideological disputes, Bell said, "I think some of our conservative friends in the department are learning about some of the realities we face."

How successful were the conservatives in altering departmental policy? "If you want a streamlined, better-managed department, they've made some progress," former Education official Scot Faulkner responded to our questions. "But in terms of reversing federal intrusion in education, the Reagan years have been a zero."

From the traditional Republican goal of creating a more efficient and cost-effective government, the Reagan administration can point to some accomplishments:

  • The department has the best record of any federal agency in pruning its bureaucracy. From January 1981 to January 1984, the department's work force dropped from 7,200 to 5,400, a 28 percent reduction.
  • In an effort to cut red tape and give local school districts greater autonomy, 33 elementary and secondary programs were folded into "block grants" to be administered by the states at a savings of $250 million a year. By the department's own estimate, this change alone eliminated 170 of the 1,800 pages of regulations that govern its programs.
  • Hundreds of student-loan collectors were fired as the delivery of aid to college students was contracted out to private companies.
  • Congress went along with an administration suggestion to apply a "means test" in handing out aid to students from families earning $30,000 a year or more. Such measures, coupled with declining interest rates, helped halt the rapid growth of the Guaranteed Student Loan program, which, even after accounting for inflation, had more than quadrupled between 1978 and 1982.
  • The size and scope of the department's 10 regional offices were sharply pruned. Tom Tancredo, head of the regional office in Denver, told us that when he arrived, "There were 200 people here, and of that, 22 people were on my personal staff alone. We had guys making $40,000 a year who did nothing but clip newspapers." Today, Tancredo presides over an office of 70 employees and a personal staff of 6.

But conservative appointees in the department regard these achievements as shadow and not substance. "You could have the finest team of corporate managers money could buy in here, and it would raise the competency from abysmal to mediocre," Education official Hugh Joseph Beard told us shortly before he left the department. "You can't spend the money wisely unless you challenge the underlying assumptions of programs that actually work to lower educational skills."

And however much the Education bureaucracy has been cut back, it has not been abolished, as promised by the campaigning Reagan, and there is doubt that a significant effort was ever made to keep that promise. The savings from cost-effectiveness reforms have not even translated into cuts in the department's budget, which has increased by $1.3 billion in the Bell/Reagan years. The department that three years ago was supposedly on death row today stands paroled and even vindicated.

And so the bureaucracy lives on. After unveiling his education commission's report, Bell mounted a traveling road show to build support for his revitalized agency: 12 major "issue forums" held around the country to tap "grass-roots opinion." One top Department of Education official told us the forums only served to "create an atmosphere for a lot of weird ideas."

Another department employee who was flown to the concluding "national forum" in Indianapolis in December described the extensive preparations for the event. "I couldn't believe the money we were spending," he said. "I met people who had been there for two weeks already. Something like 280 people were flown in for what essentially was a giant pep rally for the NEA" (the politically powerful teachers' union).

The Indianapolis event marked the zenith of Terrel Bell's rise from caretaker of an agency slated for extinction to a man who, gushed Republican National Committee Chairman Frank Fahrenkopf, "holds the most important job next to the President of the United States." The White House had been transformed from an enemy of federal aid to schools to a reluctant champion of the educational establishment's agenda. The conservatives within the department either had been fired, had transferred themselves to other agencies, or had had their voices stilled by the permanent bureaucracy. Instead of overseeing its abolition, Terrel Bell presided over the renaissance of the Education Department.

Preparing to build on his successes, last November Bell issued his annual report to his assistant secretaries detailing the "high-priority objectives" he expected his subordinates to fill during the new fiscal year. The first five pages detail how the department should pursue "the promotion of more effective learning and the enhancement of excellence in education" by making the process of giving away government money simpler. The report asks top Department of Education officials to trumpet the findings of A Nation at Risk across the land, identifying "nationwide trends that indicate a critical need for action."

Any thought of President Reagan's original promise to abolish the Department of Education seems to have gone the way of the one-room schoolhouse and the McGuffey readers. "We're stuck with this place," a top department official conceded to us. "This building is made up of monuments to members of Congress. The only hope of toppling it would have been in the first 90 days of the administration, and the nomination of Bell scotched any prospect of that."

When we asked Rep. John Erlenborn (R-Ill.), retiring as ranking minority member of the House Education and Labor Committee, whether the federal foot-in-the-door of American education is here to stay, he agreed that it is. "The fervor for doing away with the department is not as strong as the opposition to its creation in 1979," he said. "Inertia has set in, and even some people who opposed it before will now resist change." In the administration's proposed Education budget for fiscal 1985, several programs are slated to receive increased funding-including federal planning of "master teacher systems" for the states, to reward "outstanding" teachers, and, incredibly, the start of a major effort to develop computer software for classroom use. Despite the hundreds of small firms creating educational software, Bell somehow sees a need for a federal role in the software market! "Much of the software leaves a lot to be desired," he opines. And so he has proposed a major "technology initiative" to develop computer programs for national use (see sidebar, page 44).

The department's latest budget fits right into the bureaucratic-political mold: after identifying a "problem," throw more money at it. But as psychologist Barbara Lemer pointed out recently, we already spend twice as much per student on education as do our highly touted competitors, the Japanese. In an article in the Public Interest she wrote, "If the quality of schooling could be assessed by resources and resource allocation alone, America would lead the world. Per capita public expenditures on education are higher in North America than anywhere else on earth."

Ironically, the Department of Education agrees. A just-released study found a steady decline in educational achievement in the last 20 years, while federal spending on elementary and secondary education increased more than 900 percent and total per-pupil spending in public schools went up nearly 450 percent.

Although the study had been done in conjunction with Bell's regional forums, material from it was not used at any of the meetings. Our sources inside the department confirm that Bell sat on the study for nearly two months to avoid embarrassment to education groups attending the Indianapolis forum.

When Bell finally took the wraps off the study at a late December press conference, he said he expected to get "kicked around" for publicizing the data. To the surprise of several department officials, the findings were released as an "incomprehensible" chart. When we asked one analyst close to the report about its release, he remarked, "I think they wanted people to hang it on their wall rather than understand the findings."

But the findings are simple enough, as are their implications for Washington's education bureaucracy. More money doesn't necessarily mean better education.

No wonder Washington bureaucrats intent on preserving their newly created empire were reluctant to publicize the report. But will its publication, even if deciphered accurately, halt the growth of the Department of Education? Probably not. If there is one lesson to be learned from the ill-fated drive to abolish the Department of Education, it is that government agencies, once established, acquire a momentum of their own that can stymie even the staunchest efforts to dismantle them. Terrel Bell, hired to abolish the Department of Education (or so we thought), soon embraced it as his own, promoting a "new era" of education in America, one in which the federal government figures as prominently as ever-and, if proposals in the works are seized on by the big spenders in Congress, one in which the federal education bureaucracy will play an even greater part.

John H. Fund is a reporter for syndicated columnists Rowland Evans and Robert Novak. Martin Wooster is a Washington editor of Harper's. This article is a project of the Reason Foundation Investigative Journalism, Fund.