Plan to Redirect U.S. School Funds Falters : Education: Clinton effort to channel money to districts with large numbers of poor students sparks debate. Lawmakers seek to protect suburban areas.

The Clinton Administration’s ambitious plan to channel more money toward school districts with large numbers of poor students is faltering and a glimpse of where it might be headed could come today at a congressional hearing.

The threat to the initiative comes from middle-class districts that could lose federal funds that would be funneled instead, under the Administration’s proposal, to those with high concentrations of poor children.

The debate will begin in earnest as a subcommittee of the House Committee on Education and Labor begins its review of the multibillion-dollar program, called Chapter 1, for educating economically disadvantaged elementary and secondary schoolchildren.

Fireworks are likely as representatives from urban and suburban districts fight to conserve every cent that their schools now receive.

The outcome of the debate is virtually certain to reflect the trouble that two of the Clinton agenda’s oft-preached principles--getting results by concentrating money in selected areas and keeping middle-class interests firmly in mind--face in Congress, where representatives traditionally look out for their own district’s best interests.

Because of the proposed program’s complicated funding formula that awards money on a district-wide basis, individual schools with few poor children could receive money while schools with large percentages of poor students could get no money at all.

Attempts failed in the 1970s to retarget the current program, which was created as part of President Lyndon B. Johnson’s War on Poverty, to the poorest schools. But the Administration hopes enough members of Congress can now be persuaded to vote for the legislation--which it contends is for the “overall good”--even though their districts might lose money, said Mike Smith, an assistant secretary of the Department of Education.

But no one expects the task to be easy.

Representatives from both sides of the aisle--including Rep. Dale E. Kildee (D-Mich.), chairman of the subcommittee on elementary, secondary and vocational education--are lining up behind an alternate proposal that would protect the status quo and use a new formula only for allocating the $700-million funding increase that the Administration is seeking for the program.

Supporters of the alternative plan argue that the Administration’s proposal is unfair.

“The net effect of the Administration’s proposal is to increase federal funding for high-spending, urban school districts,” said Rep. Thomas E. Petri (R-Wis.), one of the leaders of the campaign against the Administration’s proposal. Petri said that his district would lose between 40% and 50% of the funding it now receives, if the Administration’s version is passed.

“Why slash us in order to shovel more money at the big city districts?” Petri asked. “It’s Robin Hood in reverse.”

But Smith said that the alternative proposal “is biased against the cities” because, although it favors districts with large percentages of poor children, it does not help districts with large numbers of poor children, as the Administration’s proposal and the current formula do.

Recent research, the Administration argues, makes it clear that the current formula has supported a two-tiered education system in the country--providing a challenging academic curriculum for middle-class children and a watered-down remedial curriculum for poor children.

The Kildee-Petri version of the legislation would not change the funding mechanism enough to alter this two-track system, Smith argued.

Under current law, the poorest quarter of the nation’s counties, which educate 45% of the poor children, receive 43.4% of all Chapter 1 money.

The Administration’s proposal would increase that to 46.7% next year and to almost 50% by 1998. The Kildee-Petri formula would increase it to 43.6%.