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Race to the Bottom

Obama’s deeds belie his words on school reform.

Mar 29, 2010, Vol. 15, No. 27 • By MARY KATHARINE HAM
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On education, as in many other policy areas, Barack Obama has been hailed as a bold reformer willing to take on entrenched interests, though there is little evidence to support that image beyond the words in his own speeches. Just last week, New York Times columnist David Brooks called him the “most determined education reformer in the modern presidency.” The supporting evidence offered came largely from a speech Obama gave in Virginia touting his “Race to the Top” program, which is meant to reward districts attempting reform with federal dollars.

The president did sound notes uncharacteristic of a Democrat, such as accountability for teachers and competition for students. He closed with an impassioned call for educational opportunity for all:

We’re going to raise the bar for all our students and take bigger steps towards closing the achievement gap that denies so many students, especially black and Latino students, a fair shot at their dreams. We’ll open up opportunity—evenly and equitably—across our education system, .  .  . we’ll reward success, and replicate it across the country.

Nearby in Washington, D.C., however, there were 1,700 students and families waiting for Obama to make good on his rhetoric. Help was not on the way.

“I almost choked up when he said they’re gonna make it a priority that kids have equal access to education,” said Virginia Walden Ford, a longtime school-choice activist in Washington. Walden Ford worked through the Clinton administration and into George W. Bush’s second term to get a pilot voucher program approved for a group of mostly low-income black and Hispanic families to escape failing public schools with $7,500 scholarships to private schools. 

On Tuesday, Walden Ford lost a yearlong battle to keep the program alive, as a vote to reauthorize it failed 42-55 on a mostly party-line vote in the U.S. Senate. 

“Another battle lost, but the war’s not over,” Walden Ford said. “I think it’s horrible that we’ve had to fight so hard for this little program. I really didn’t expect it to be this difficult,” though she conceded the uptick in Democratic senators in the 2008 elections, most of them backed by teachers’ unions, had made the political landscape unfavorable.

Led by Independent Democrat Joe Lieberman, a bipartisan group of senators including California Democrat Dianne Feinstein has been trying to rescue the program since March 2009, when Illinois Democrat Dick Durbin inserted fatal language in an omnibus spending bill. Republican John Ensign of Nevada offered an amendment to save the program, but it was defeated.

The media coverage of Durbin’s blindside and the loud objections of school-choice advocates led the Obama administration to offer a sop to D.C. Opportunity Scholarship families: There would be no scholarships for new students after this school year, decreed Secretary of Education Arne Duncan, but kids currently participating in the program could keep their scholarships until they graduated.

Even that promise is now in danger, however, since the private scholarship fund that administers the program pulled out amid uncertainty about its future. Walden Ford said she’s had trouble getting a new organization to administer the program, which is exactly what voucher opponents hoped would happen when they threw its funding into doubt.

Studies have found great student and parent satisfaction with the program. In addition, as the Washington Post points out, “a rigorous, federally mandated study confirmed the program’s effectiveness,” showing statistically significant 3-5 month gains in reading among Opportunity Scholarship kids over their public-school counterparts. Dr. Patrick Wolf, investigator in charge of Department of Education evaluations of the program, noted at a May 2009 Senate committee hearing that the Opportunity Scholarship was one of a small minority of federal, experimental programs he’d studied that showed statistically significant improvements.

Despite a pledge to spend tax dollars not based on “whether an [education] idea is liberal or conservative,” but on “whether it works,” Obama remained silent as an innovative program was killed at the behest of teachers’ unions.

“There’s so many programs that have not worked that just continue year after year after year, like Head Start,” Walden Ford said. “This is not about children. This is politics at its worst.”

Head Start, a national early education program that costs $7 billion a year, was reauthorized in the very bill Durbin used to kill the Opportunity Scholarships. Ten months later, the administration released a long-overdue evaluation of Head Start that revealed “few sustained benefits” for Head Start students. Obama’s budget calls for an increase in Head Start funding, despite the program’s failure to meet his “whether it works” threshold.

But while Democrats subject the Opportunity Scholarships to a slow death, they’re working with the administration to fast-track a bill that would nationalize federally guaranteed student loans made through private lenders, turning them into direct loans from the Department of Education. It’s the “competitive nature” of “Race to the Top” that Obama insisted makes it effective, but when it comes to student loans, private competition is the “middle man” to be eliminated.

Secretary Duncan sent a letter to college officials in October telling them to prepare to make the switch to direct loans in the 2010-11 school year, even though the bill’s passage was still in doubt. It passed the House, but was unlikely to earn a filibuster-proof majority in the Senate. The measure has now been added to the health care bill, guaranteeing that it will get very little attention in the run-up to a vote. California Polytechnic State University, which transitioned to the direct-loan program this year, has already reported delays in financing that sent students to class without books for four to six weeks. Your government in action.

The federal student-loan takeover is the archetype of a government program’s inexorable creep, and should serve as a warning about the direction Obama wants to take education and health care alike, his rhetoric about competition and thwarting special interests notwithstanding. A “Stafford Loan” program created in 1965 to allow students to borrow money cheaply with a government guarantee begat a program where loans made by private lenders were transferred to the government’s books, which begat artificially better budget numbers by eliminating actors subject to the risks and fluctuations of the market. That program begat a Clinton initiative—a direct loan program as an alternative to federally subsidized loans made through private banks—a “public option,” if you will—which was supposed to beget more competition. Responding to incentives and crowded out by government programs, unsubsidized private operators now make up only about 14 percent of the student loan market. Still, Obama remains determined to eliminate messy profit-makers from the business in the interest of savings .  .  . which he has already spent on health care.

Senator Lamar Alexander complained in a statement that the

federal government will borrow money at 2.8 percent and then lend it to students at 6.8 percent. .  .  . The government—instead of using that money to reduce costs for students who are borrowing the money—will use it to pay for more government programs. According to the preliminary CBO estimate produced this morning, the new bill will take $9.1 billion over 10 years from students’ interest payments to pay for this health care takeover.

In yet another Cornhusker Kickback moment, an earmark in the reconciliation bill allowed just one North Dakota bank to continue federally guaranteed lending, but this caused enough controversy that its beneficiary, Senator Kent Conrad, asked to have it removed so as not to derail the train to health care reform.

“We negotiated this in good faith months ago,” Conrad told Roll Call. “But it’s not worth it. It’s not right that it be used to misrepresent this package.” The amount of that one earmark was $50 million, roughly three times the amount needed to fund the D.C. Opportunity Scholarship program for a year. 

It’s stories like this that make you wish there were, somewhere in the federal government, a prominent, reform-minded lover of educational innovation and programs that work who could “negotiate in good faith” on behalf of low-income children like those in Washington, D.C.

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