Obama's Education Spending Frenzy

After the administration's first year, it's status quo 20, reform 1.

A year after coming into office with promises to shake up the way public education is managed in this country, how have Barack Obama and his highly regarded education secretary, Arne Duncan, performed?

Judging by their own words, brilliantly. Obama and Duncan have been praised for taking on teachers unions and encouraging states to tackle real education reform through the Race to the Top program of competitive grants. Race to the Top induces states to compete for $4.3 billion in stimulus money (about 5 percent of the dollars appropriated to education by the February 2009 stimulus package) by lifting the cap on charter schools, linking teacher evaluations to student achievement, pledging to embrace national standards, and turning around low-performing schools. In The Washington Post last July, Duncan called Race to the Top "education reform's moon shot."

While Race to the Top includes some steps in the right direction, having a few states tweak their laws to allow more charter schools and to better measure teacher performance isn't exactly on par with sending men into space. It's even less impressive in the context of the billions of new dollars that the Obama administration has spent to support and enhance the education status quo. Judged as a whole, the Obama/Duncan education program has been more about massive amounts of new spending than anything like real education reform.

The stimulus package allocated $100 billion to public education. This unprecedented federal funding, nearly twice the Department of Education's annual budget, was touted as a vehicle for transforming public education rather than doubling down on a failed system. But most of the $69 billion released as of this writing has gone to backfill state education budgets and maintain teaching jobs. 

In the last three months of 2009, according to the administration, the stimulus funded the jobs of more than 329,000 teachers, counselors, and librarians. According to California Gov. Arnold Schwarzenegger, "those teachers would have been gone if it hadn't been for the stimulus money." In other words, rather than reorganizing poorly performing schools the stimulus allowed states like California to carry on with their unsustainable education budgets. It also protected local school districts from grappling with serious structural budget issues such as untenable pension obligations. Rather than reducing benefits or requiring greater employee contributions, California school districts with multimillion-dollar budget deficits continue propping up a teacher retirement system that is running a $48 billion shortfall. The education portion of the stimulus essentially has replaced state education spending, allowing states to shift money to other areas rather than solving their structural budget problems.

And the Obama administration's education spending frenzy goes beyond the stimulus. His fiscal year 2011 budget proposal includes a 6.2 percent increase in education dollars, despite his plan to freeze overall domestic spending beginning in fiscal year 2011. The budget does allocate some of the money to competitive grants and reforms such as charter schools. But instead of cutting the Education Department's huge old programs (such as $14.5 billion in Title I transfers to schools serving lower-income students) and redirecting the money to reflect the department's new priorities, the budget just adds billions of dollars for new initiatives.

Obama promised to show fiscal restraint and reward "evidence-based" education programs that work. Yet his 2011 budget gives the early education program Head Start an increase of $989 million, even after a January 2010 gold-standard study by the Department of Health and Human Services once again confirmed that Head Start does not offer disadvantaged students any advantage. (See "Head Start Fail," page 13.) He also proposed a new $9.3 billion Early Learning Challenge Grant program to encourage states to invest in state-run universal preschool.

The administration has proposed billions in new funding for higher education as well. Under the proposed 2011 budget, the maximum for Pell Grants would increase by $160 to $5,710 and automatically rise by the rate of inflation plus one percentage point annually for the next decade. The budget also includes a $10.6 billion American Graduation Initiative to improve and modernize community colleges and a $3.5 billion College Access and Completion Fund. The bottom line will be ever-rising college costs caused by the influx of more "free" taxpayer money, which effectively increases demand and drives up prices. The College Board reports that tuition costs at public colleges increased 20 percent in the last five years, compared to 15 percent at private colleges. Yet college students are paying less "net tuition" today than they did in 2004 because of government grants. While the overall cost of college is rising, government aid is shielding students from shouldering the burden. College will continue to become more expensive, prompting more calls for government-backed loans and other federal aid for young people who cannot afford college, which in turn will contribute further to rising costs. Rinse and repeat.

The Obama administration gave an early signal of the direction it would take in education when it went along with the gratuitous 2009 elimination of D.C.'s inexpensive but highly effective Opportunity Scholarship Program. The administration had promised to support evidence-based reform. Yet it refused to fund a voucher program that cost far less than 1 percent of Race to the Top, despite the federal government's own gold-standard study that found participating students had gained five months in reading achievement. The president's decision to stop more than 1,000 families from choosing higher-quality private schools (as his own children do), and instead force them back to the failing D.C. public schools they had escaped, turned out to be an accurate reflection of his commitment to reform. 

Lisa Snell ([e-mail]) is director of education at the Reason Foundation.