For Democrats, Republicans, Education Is Priority No. 1

Over the several months, both House Republicans and the president unveiled education improvement initiatives. Both initiatives demonstrate that politicians in Washington are eager to demonstrate their dedication to what has emerged as America’s No. 1 concern: education. Although the rhetoric is similar, the substance of the two proposals is vastly different.

The Republican education plan contains three provisions of only modest substance. Title I simply expresses the sense of Congress that 95% of federal education funds be spent for classroom education. Everyone wants to see the minimum spent on bureaucracy and the maximum spent on education. California voters considered but rejected an absolute mandate to achieve the 95% goal (Proposition 223). However, Title I of the Republican bill is simply an admonishment or resolution. It has no legal effect.

Title II of the Republican proposal is the education flexibility bill. The Clinton administration has already implemented the concept in 12 states, and a Republican and Democratic Senator were well on the way last year to expanding educational flexibility to all 50 states. Ed-Flex, as it is called, was introduced in the House by Reps. Tim Roemer (D-Ind.) and Mike Castle (R-Del.). I am a co-sponsor. It recently received Congressional approval.

Finally, Title III of the Republican proposal is designed to help local school districts finance school construction and modernization. It is on this point that the Republican plan is most comparable to Clinton’s plan, because both use changes in the tax code to reduce the cost that local school districts incur when they issue school bonds. However, this is where the similarity ends.

The Republican proposal would not provide a single dollar to school districts or the investors who purchase their bonds. Instead, it would change the arbitrage rules so that school districts would be able to issue bonds four years before they needed the money, and then invest the proceeds to obtain a yield greater than what they were paying investors on the tax-exempt bonds.

I think school districts need fiscal flexibility. Sometimes bonds need to be issued in one year, and the proceeds invested until the money can be spent one, two or even three years later. But that’s a far cry from deliberately inviting every school district to issue bonds four years before the money is needed, and to view the opportunity to invest the proceeds during those four years as the federal government’s sole contribution to classroom construction.

Asking that school districts look at arbitrage investments as a deliberate new profit center reminds us that sometimes government agencies (like Orange County) do not always pick the best possible investments. If the sole federal contribution to local school construction is to invite school districts to become arbitrage investment bankers, then we’re not doing what we should.

In contrast, Clinton plans to provide federal tax credits to those who purchase up to $22 billion in school bonds. Those who receive the credits would not receive interest from the school district, and thus school districts would be able to borrow $22 billion interest-free. It’s all win for the school district, without taking arbitrage risks.

The difference in the two approaches can be seen in their relative cost to the federal government. The Republican plan would cost the federal government $1.4 billion over five years, while the Clinton proposal would cost $3.7 billion over five years. Clearly, the Clinton approach is a far more substantial federal investment in helping local school districts finance renovation and construction.

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The Clinton proposal also contains six important proposals that Republicans have failed to embrace. First, Clinton’s accountability initiative would hold students, teachers and schools accountable to higher standards and ensure that school districts and states obtained results. This would require designing a test at the federal level to be administered to every student. These accountability standards would be tied to strict entry-level standards and mentoring for new teachers, assisting states to identify and intervene in low-performing schools, requiring schools to adopt discipline codes and to ending social promotion.

Second, the president’s budget would provide the second installment on the federal program to provide 100,000 new teachers over seven years to reduce average class size.

Third, the president’s initiative triples funding for adult-supervised after-school activities, particularly academic enrichment, tutoring and sports. For more than 28 million school-age children, either both parents are in the work forceor there is only one parent and that parent works. As many as 15 million of these children have no adult supervision after school.

Fourth, the president’s program provides a 20% increase in funds to bring technology to our schools and connect every school to the Internet by 2001. Fifth, the president’s budget seeks a significant increase in the Teacher Quality Enhancement Initiative, designed to help improve teacher preparation programs and address the shortage of well-prepared teachers.

Sixth, the program provides for a 13% increase in Head Start, which has been proven to help children from low-income homes. Finally, the president’s program provides a significant increase in the safe and drug-free school program.

Education is a critical priority for America. It is important that both parties not only talk the talk but also walk the walk. I am confident that we will be able to persuade moderate Republicans to embrace the key elements of Clinton’s education plan, so that the federal government will make a substantial contribution toward improved education.