updated 4/1/2009 9:58:57 PM ET 2009-04-02T01:58:57

Education Secretary Arne Duncan on Wednesday released the first $44 billion in economic stimulus money directed to schools, but said strings will be attached to the next round of aid.

The Obama administration views the stimulus as a chance not only to save thousands of teachers' jobs but to overhaul the nation's failing schools.

"This is a historic opportunity, a once-in-a-lifetime opportunity, to lay the groundwork for a generation of education reforms," Duncan said Wednesday at Doswell Brooks Elementary School in the Washington suburb of Capitol Heights, Md.

Duncan chose the school because it has significantly boosted achievement despite high numbers of poor and special education children, a challenge that often overwhelms urban schools like Doswell Brooks.

Unprecedented money for schools
After announcing the stimulus news in the library, Duncan visited two classrooms with Maryland Gov. Martin O'Malley. They took turns reading the book "New Tricks I Can Do!" to first-graders and talked about President Barack Obama to fifth-graders.

"It's not just being president," Duncan said. "You can be smart like the president, right?

Obama's first order of business when he took office in January was passage of his economic stimulus bill, which provides an unprecedented amount of money for schools — double the education budget under President George W. Bush — over the next two years.

The administration on Wednesday made available half of the dollars for federal programs that pay for kindergarten through 12th grade and special education. In addition, Duncan will provide applications for states to get money from a special fund to stabilize state and local budgets.

However, loopholes created by Congress could let states and school districts spend the money on other things, such as playground equipment or new construction. It also could let lawmakers cut state aid and replace it with stimulus dollars, leaving school districts with no additional aid as local tax revenues plummet.

Duncan said last week he will "come down like a ton of bricks" and withhold the second round of funds from anyone who defies Obama's wishes.

Still up in the air is how the administration will cope with another, unanticipated development — the refusal of one governor, South Carolina's Mark Sanford, to take the money.

Stimulus law requires governor's OK
The White House acknowledged Tuesday it can't circumvent Sanford, who doesn't want the money because he can't use it to pay down debt. White House budget director Peter Orszag said the stimulus law requires Sanford's OK.

But Orszag said, "It would be an unfortunate (and we believe an unintended) policy outcome if the children of South Carolina were to be deprived of their share of federal stimulus dollars ... because the governor chooses not to apply for stimulus funds."

He made the comments in a letter to Sen. Lindsey Graham, R-S.C., that was obtained by The Associated Press.

Duncan said he's looking for ways to help kids in South Carolina.

"There are some desperate inequities there," he said. "There are some children who are being very, very poorly served. And my heart hurts for those children."

Also Wednesday, Duncan outlined a series of steps that states must take to get the next round of dollars. States must report on:

  • Teacher quality and evaluation systems.
  • School restructuring under the No Child Left Behind law and also on charter schools, which get public dollars but operate with more independence than regular schools. Obama wants to increase their numbers.
  • Scores on state and national tests to show whether state standards are rigorous enough. States also must report on how many high school graduates go on to earn college credits.

Data systems to track performance
States also must set up sophisticated data systems to track student performance.

Duncan intends to use the information to make the case for states to adopt common standards, a controversial issue on which previous presidents trod lightly.

"The fact is, having 50 different state standards just doesn't work," Duncan said. "Which is why we have called for states to adopt higher standards that truly prepare young people for college or work."

States and districts will also have a chance later this year to compete for money from a $5 billion fund solely for these kinds of innovations.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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