THE 106TH CONGRESS, ONCE IT GETS PAST THE impeachment drama, will have a rare chance to tackle another set of Washington-style crimes and misdemeanors: 34 years of federal education policy and programs so misguided that today they undermine the prospects of reforming the nation's woeful schools.

Most of the big federal-aid programs are due for renewal this year. They are also ripe for rethinking. Three decades after Lyndon Johnson rammed through the Elementary and Secondary Education Act (ESEA) of 1965, it's generally acknowledged that the 60-odd programs enshrined in that massive statute (at an annual cost of some $ 11 billion nowadays) have failed to accomplish their goals or solve the country's nagging problems of school effectiveness and pupil achievement. Indeed, these programs now get in the way of change-minded states and communities.

Besides ESEA, key measures slated for review by the new Congress include the administration's signature Goals 2000 program and the National Assessment of Educational Progress, aka "the nation's report card." The federal role in education research is up for extension, too.

In the legislative round that begins this year, the Republicans will be in charge of reshaping ESEA for the first time. At a moment when U.S. school performance remains dismal, when surveys show education to be the domestic issue most on people's minds, and when it's clear that Clinton and his allies have outmaneuvered the GOP whenever this topic has been on the table, we might suppose that congressional majority leaders would place this at the top of their agenda. We might also expect them to make common cause with their party's successful "education governors," for example, the Bush brothers, John Engler, Tommy Thompson, and Tom Ridge, all of whom have launched bold state-level school reforms that are showing good results and have even managed to turn K-12 education into a Republican political asset.

Perhaps congressional Republicans will find a way to do likewise. The governors have been visiting Capitol Hill. The Senate's keenest education reformer, Georgia's Paul Coverdell, is beavering away on legislation. There are sounds of activity on the House side as well, including audible interest from Speaker Hastert. But the White House is working harder and faster. It came out of the 1998 election with the education wind at its back and wants to maintain that lead during the coming presidential contest. Beginning with his State of the Union address, President Clinton will again trumpet his education agenda. He will trot out more focus-group-tested proposals for new programs such as school construction and after-school services. And he will submit an ESEA reauthorization proposal that tweaks the statute further in the direction of what educrats call "systemic reform."

That means top-down efforts to change whole state and local school systems via central planning: centrally determined goals and standards, centrally managed licensure and accreditation schemes, centrally monitored inputs and services, and centrally enforced accountability strategies. Systemic reform is the essence of Goals 2000 and was the driving philosophy of ESEA's 1994 reauthorization. One of the nation's keenest systematizers is Marshall Smith, former Stanford education dean and now number two at the Department of Education.

Systemic reformers trust experts and favor government-style solutions. They have no faith in markets, scant confidence in laymen, and little interest in diversity unless it is centrally planned. They're skeptical of charter schools, hostile to vouchers, uneasy with private enterprise, and wary of too much involvement by politicians and parents in important education decisions.

Since the nation was declared "at risk" in 1983 because of the shoddy state of our K-12 education system, the systemic philosophy has governed nearly everything done in Washington. President Reagan sought to reverse the trend -- he proposed voucherizing the big Title I program, for example -- but was ignored by Congress. Bush offered a blend of systemic and marketplace strategies, but the latter got nowhere on Capitol Hill. Even Bill Clinton's first Goals 2000 proposal was sent back for redrafting because the plan wasn't sufficiently centralized to suit House Democrats. And during the past six years, almost every effort to inject more consumer-centered or marketplace-style reform has come to naught, either perishing in committee rooms or struck down by Clinton's veto pen.

MEANWHILE BACK IN THE STATES, THE "LABORATORIES of democracy" where most significant education decisions get made, almost 50 different reform strategies are at work. Some hew to systemic orthodoxy. Many, however, move in the opposite direction. Consider the 1,100 charter schools now operating, the publicly funded voucher programs in Cleveland and Milwaukee, another 50 or more privately supported voucher schemes, and the hundred or so public schools now managed by private firms. Even New York, for a long time the most centralized and union-dominated of state school systems, now has a passably serious charter law.

The state reform schemes that show the greatest promise are hybrid strategies: They meld ideas from the systemic warehouse with elements of competition and choice. That's what we see in Texas and Florida, in Michigan and Pennsylvania, in Arizona, Minnesota, and Massachusetts.

The hybrid approach says all schools in the state must attain the same standards in core academic subjects, and all students must demonstrate their mastery by passing the same tests, but everything else is up for grabs. Schools are essentially independent in their operations. They compete for students and resources. They make their own decisions about staff, schedule, technology, and a hundred other things. Dollars follow pupils to the schools of their choice -- and no pupil is confined to a bad school. Accountability flows in two directions: to public authorities, who set the standards and monitor the test scores, and to families, which are free to choose different schools if they conclude that it will help their kids.

Even as hybrid reform strategies gain traction in the states, however, Washington hews single-mindedly to the systemic approach. Such rigidity has become a drag on serious education reform.

Charter schools illustrate the problem. They're spreading like wildfire, with at least 400 new ones just this year. New York was the thirty-fifth state to pass the necessary legislation. They are hugely popular with parents -- most have waiting lists -- and early returns indicate that they're generally working well, both in boosting pupil achievement and in meeting the needs of children and families. Just as important, the competition from charter schools, for pupils and revenue, is spurring public-school systems to become consumer-minded.

How does Washington treat charter schools? With one exception, it pretends they don't exist. Uncle Sam entrusts his dollars to state and local education agencies from which charter schools must wrest their share if they can. (These, of course, are the very bureaucracies that, in most places, fought to keep charter laws from enactment, and that charter schools seek to escape.) The General Accounting Office has found that many schools don't know how to get these funds or are frustrated in their attempts to do so. That means low-income and disabled pupils in charter schools don't get the federal aid they would receive in regular public schools.

How can this be? Federal education policy today, as in 1965, recognizes only public school systems, not the refugees from those systems even though they represent the front lines of education reform.

The one exception is a special program of federal aid specifically for charter schools. The creation of this program was a typical Washington maneuver, and as such, it is a useful illustration of how the federal government funds and views school choice. Instead of adjusting existing programs to accommodate the new schools and their students, the federal government set up a thin stream of funding for charter schools alone. The program's modest grants are a boon to the founders of such schools, and boosters are glad it's there. But this assistance is nowhere near comprehensive. Furthermore, a needy student enrolling in a charter school must forgo all other forms of federal aid. The federal money that he benefited from while in public school never belonged to him; it belonged to the public school system and, although the student fled that system, Washington still sends it there.

Then there are the regulatory hassles and misdirected dollars. Today's infant charter school is apt to find that Department of Education's Office for Civil Rights crashing down on it if it tries to do "special" education differently. State efforts to ease the teacher quality crisis are confounded by Washington because it channels millions into traditional ed school programs. The "regional education labs" then waste more millions disseminating information, often about faddish, unproven instructional methods, as if educators still inhabited the pre-Internet world of 1965 when the "labs" were created.

Besides interfering with state reforms, the federal programs don't accomplish their own objectives. Title I, the biggest of them all, has sought to narrow the achievement gap between disadvantaged and middle-class youngsters. But study after study shows that this effort has failed. The "safe and drug free schools" program has made U.S. schools neither safe nor drug free. The Eisenhower Professional Development Program hasn't even come close to producing the crackerjack math and science teachers that are its stated mission. The Goals 2000 program, as of 1999, has moved us no closer to the national education goals set a decade earlier. And so forth.

Over the years, Washington's response to this dismal record has become ritualized and predictable. An evaluation says the program isn't working. The program's protectors and interest groups then trot out a package of minor amendments and promise that this time, for sure, cross our hearts, the program will succeed so long as it is recalibrated in the ways they suggest. Almost nobody offers any serious alternative -- and those who do are promptly branded enemies of public education. The Congress assents to the recommended tweaking -- after ensuring that no school system will lose any money. And in due course, another evaluation reveals, yet again, that the program is not accomplishing its stated purpose.

That's been the pattern for 34 years. The question is whether this next cycle will be any different. It will not, it's safe to say, if President Clinton and the Department of Education's Marshall Smith call the shots again. But what might federal education policy look like if Republicans set out to change it and, perhaps, made common cause with reform-minded Democrats such as senator Joe Lieberman? Three simple ideas should guide the 106th Congress. Taken together, they would legitimize the hybrid approach to education reform in Washington and buttress rather than frustrate state attempts to make it work. They would also leave states free to embrace other strategies.

FIRST, GET OUT OF THE WAY. LET STATES MINGLE THE dollars from those dozens of categorical programs and spend this money on whatever their students need most: better teachers, new tests, tutors, reading programs, bricks and mortar, whatever. Jurisdictions that prefer to keep receiving their federal dollars wrapped in red-tape should be free to do so. As with welfare reform, change is most apt to come to an entrenched system if states are allowed to make such decisions. Speaker Hastert seems to be heading down this path with his suggestion that the current half-baked federal program known as "ed-flex" be radically strengthened.

Second, strap the federal money to the kids' backs. If a program is meant to assist children who are poor, handicapped, or don't speak English, whatever aid a youngster qualified for should accompany him to whichever school he enrolls in. The money belongs to him, not the bureaucracy.

Third, focus on quality. Although Congress cannot improve schools, it can insist that states show the public how well their schools and students are doing. The only obligation that Uncle Sam should place on states in return for federal education dollars is that they participate in the National Assessment and publicize their results. If they fear the sunlight, they can forgo the money. (The National Assessment needs a legislative overhaul, too, to buttress its independence from the federal Education Department and the school establishment and to make its tests more frequent and more accessible.)

Radical? Nor really. Observe what this is not. It is not a blood-and-guts approach. It does not push states and communities around, substituting one set of Washington-style nostrums for another. It does not claim that vouchers alone will cure America's education maladies. It's not a cry for Uncle Sam to get out of education by scrapping programs, abolishing agencies, and slashing budgets. What, then, is it? Think of it as overdue consciousness-raising about the failure of the time-dishonored Washington approach. Think of it as an unprecedented change to do things differently. And think of it as smart politics, too, especially for Republicans.

It's common knowledge in Washington that administration officials and Democratic congressional aides regale each other with tales of their success in rolling the GOP every time education has been on the agenda since 1994. Education has, in fact, been a debacle for Republicans at the national level. So how come those Republican governors have made it work politically for them?

First, they've made clear that they believe in public education, albeit public education redefined to include charter schools, contract schools, and any other school that's open to the public, financed by the public, and accountable to public authorities for its results.

Second, these governors have been willing to spend money on good education delivered to real kids in real classrooms. But they have no patience for throwing more dollars at obsolete activities, dysfunctional programs, faddish methods, or swelling bureaucracies. They demand value for their money.

Third, they have nearly always cast their proposals in terms of what's on parents' minds, not abstractions such as block grants. What parents (and taxpayers) want for children is basic skills, high standards, safety, sure-fire classroom methods, terrific teachers, and greater say over how the kids are educated. Clinton and company are masters of that rhetoric. So, too, are the GOP governors who have done well with the education issue.

What about the push for bipartisanship and compromise? To date, compromise in the education arena has meant giving the White House nearly everything it wants while attaining no Republican objectives. It's reminiscent of Jimmy Carter's approach to detente. (The other side gets to take Afghanistan and Ethiopia but we get to keep France and Canada.) That's not bipartisanship. It's near-capitulation.

What could be more bipartisan than a hybrid strategy that embraces standards and accountability, on the one hand, and freedom and choice on the other? What compromise could be more timely than one that enables states to take charge of school reform and doesn't try to make them all do the same thing? Yes, most successful Republican governors have been bipartisan in their approach to education, but they have not allowed themselves to be rolled. They have been Reaganesque: principled, resolute, and sly, yet forward-looking, openhanded, and cheerful. The 106th Congress could do worse than to emulate them. It probably will.

Chester E. Finn Jr. is John M. Olin fellow at the Manhattan Institute and president of the Thomas B. Fordham Foundation.

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