CONGRESS HAS BEEN ATWITTER over a minor measure it just passed known as "ed-flex," which snips red tape in some federal education programs. Since 1994, a dozen states have been permitted to modify these regulations; ed-flex would allow all the states to do so.

Now any easing of Washington's hammerlock on U.S. schools is welcome, and ed-flex is fine as far as it goes, but its impact will be tiny -- if indeed the White House doesn't veto it. It leaves most federal regulations intact. It denies states the right to move federal dollars from one educational activity to another. And it doesn't even touch the most troublesome and rulecrazy programs, such as bilingual education and special-ed.

Nonetheless, ed-flex has triggered a noisy ruckus on Capitol Hill. That's because, by nudging power away from Washington, it hints at more important fights ahead. Over the next 18 months, all the major building blocks of the federal role in K-12 education are up for reauthorization -- notably the Elementary and Secondary Education Act and the controversial Goals 2000 program. At issue is whether Washington is going to regulate the nation's schools more tightly -- with new programs, rules, and conditions attached to its dollars -- or whether the federal grip can be relaxed, to give states, schools, and parents more control.

The most promising set of ideas for reforming the mammoth Elementary and Secondary Education Act is known as "Super Ed-Flex." Think of Super Ed-Flex as a way for the states to become like giant charter schools, with a sweeping exemption granted from federal rules and red tape, so long as educational results improve. Participating states would effectively enter into a contract allowing them to spend their federal education funds as they like for five years, while requiring them to produce tangible academic gains during that time.

Or think of Super Ed-Flex as a block grant with teeth. The main complaint against previous block-grant proposals is that, while they would liberate states from federal control, they would not ensure that children learn more. After all, there is no reason necessarily to trust state education bureaucrats more than their federal counterparts. Super Ed-Flex would reward (with continued freedom, and perhaps a funding bonus) those states that boost student achievement. It would hold laggards accountable by casting them back into the regulatory briar patch and perhaps cutting their appropriations. And it would be voluntary. States that prefer the federal briar patch could stay there.

A state that opts for Super Ed-Flex could consolidate its federal dollars from as many different federal programs as it wishes, including the big Title I aid-for-disadvantaged-children program. It could spend the money as it sees fit -- on better teachers, more choice, higher standards, different tests, programs for disabled children, smaller classes, you name it. With one big condition: The state would have to boost pupil achievement statewide, demonstrating those gains on a test of its choosing agreed upon ahead of time. Two smaller conditions: If a state included Title I dollars in its Super Ed-Flex money pool, it would have to show academic gains by its disadvantaged youngsters. Likewise, if federal funds for bilingual education were part of the package, the state would need to show gains by the students who are acquiring English proficiency.

Under Super Ed-Flex, Washington would assume the role of shareholder, not CEO, of the nation's educational enterprise. Rather than micromanaging the day-to-day uses of federal money, it would let states manager the schools as they see fit in return for an agreed-on return on the federal investment. This idea may sound Republican, but it could prove bipartisan. Some Democrats have hinted that they would welcome such an approach. California's new Democratic governor Gray Davis recently said he would like a deal in which Washington says to the states, "We'll hold you accountable. You just improve student performance, and we'll give you the money." Super Ed-Flex would create this opportunity. California, for example, could spend more of its (billion-plus) federal education dollars on Davis's reading initiative and his efforts to boost teacher quality, so long as the performance of California students improved.

Note that Super Ed-Flex would not abolish any federal programs. In fact, most states would probably continue receiving their dollars from Washington the old way. But Super Ed-Flex does set the stage for some states to experiment and show what can be achieved by doing things differently. As in the early days of welfare reform, it offers change-minded governors the freedom to innovate, and insists on results. It could thus pave the way for a change in federal education policy as dramatic as the 1996 federal welfare reform.

Chester E. Finn Jr. is John M. Olin fellow at the Manhattan Institute and president of the Thomas B. Fordham Foundation. Nina Shokraii Rees is an education policy analyst with the Heritage Foundation.

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