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As a Governor I balanced a State budget for eight years so I know something about the process. I am by nature a prudent and frugal person. I am someone who likes to get a good return on my investment.
Education, to my mind, is clearly the key investment in this Nation's future, and the American people remain strongly committed to investing in their children's education. A recent public opinion poll clearly illustrates this point.
The poll by the NEW YORK TIMES and CBS News showed that when people were asked whether they favored a balanced budget amendment to the Constitution, 81 percent said yes. But when these same people were asked whether they would favor cuts in education spending in order to balance the Federal budget, support dropped to just 22 percent. That's a drop of 59 percentage points ? a dramatic illustration of the value the American people place on education.
If you believe, as I do, that the strength of this country is in the self-reliance of our citizens -- and if you believe that the "locus of power" is the self-reliant American and not the government -- then that self-reliance comes, in large part, because we see the education of the American people as an act of nation- building.
It seems to me, then, that the American people have it about right. This is no time to de-emphasize education, particularly as we rush forward into this new Information Age. This country gets ahead and they get ahead as individuals when we invest in education. This has always been the basic working principle that has defined the Federal role in education.
Education is a national priority but it is a State responsibility under local control. We recognize that the Federal government has a limited role in education and I am a firm believer in the 10th Amendment. I am not an advocate of a national exam or the intrusion of the Federal government into State and local decision making.
This is why we have gone to great lengths in the last two years to fundamentally change the way we do business. And, that may be a good place to start this discussion -- to talk to you about my vision of education.
When I was Governor of South Carolina, I viewed the U.S. Department of Education as an agency that had good intentions but got itself tangled up with a lot of strings and red tape. My focus was on improving results, the Department's was on monitoring compliance.
When I became the Secretary of Education, I was determined to turn that situation around. Some real thinking people, including a good number of my fellow Governors, had done some serious work in re-thinking how school improvement actually happens. We knew that school reform had to be comprehensive; that it couldn't be piecemeal. We also knew that flexibility and accountability had to be at the center of any changes made in Federal programs.
This is the reason why my efforts have been directed at moving away from the old 1960's categorical, top down approach. Instead we have placed a strong emphasis on accountability for results, and maximum flexibility in how to achieve them. We have worked very hard to open up the process; to get away from the idea of smothering the States, communities, and schools with regulations and mandates, but we have offered little in the way of support, encouragement or flexibility.
All of our new programs are defined by this new vision -- the Goals 2000 Act, the School-to-Work Opportunities Act, our strong new emphasis on getting technology into the classroom, our support for charter schools, our re-designed Title 1 program, and our commitment to making good teachers better teachers through professional development.
This is one reason why I think we got so much bi-partisan support for these new programs. They really do represent effective, positive change. They are an entirely different model of how the Federal government does its business.
My concern, however, is that because these programs are so new they will become the first on the chopping block. I want to assure you that if the Committee goes in that direction then we miss the opportunity to really change how the Federal government functions - - nothing really will have changed.
This is why the new Goals 2000 Act is one of my highest priorities. In terms of my Department's overall budget the appropriations set aside for the Goals 2000 Act is relatively modest. But this legislation is the culmination of a decade of thinking by a great many people about how to improve American education.
Goals 2000 provides the framework for all of our other reform initiatives and defines the Federal role in a better, more balanced new way. Goals 2000 is also the driving force behind the ongoing effort across this country to raise standards and get technology into the classroom.
In many respects, Goals 2000 is the strategic map or guide that Governors and educators are using to think through how they help teachers in the classroom. This $400 million program provides great flexibility to schools, school districts, and States to develop and implement reforms based on their own challenging standards. That is why three of the best teachers in the nation-- the three most recent National Teachers of the Year--wrote me last week expressing their hope that the U.S. Department of Education and Congress will increase funding for Goals 2000.
I want to emphasize that there are no regulations governing Goals 2000, and that the State application form is just 4 pages long. I estimate that about 98 percent of all the funding in Goals 2000 goes directly to the States, and in its second year 90 percent of all funding flows directly to local school districts. This is an entirely different way of doing business for the Federal government.
Goals 2000 is a model of how Federal funds should flow to the States and that is one reason why Goals 2000 has won the support of a majority of Governors and State legislators--Republicans and Democrats--since it became law last April. We have now received 42 State applications for first-year funds, and have approved 41 of those applications.
Massachusetts, for example, is already using its State planning money to support the creation of 14 charter schools. Kentucky is using its money to encourage parental involvement in Kentucky's on-going reform efforts. Oregon is using its Goals 2000 money to support the OREGON BENCHMARKS, the citizen-based vision of education for the 21st century.
In some States like Illinois, for example, local school districts are using Goals 2000 monies for strategic planning. Goals 2000 is giving local educators the rare chance to be strategic in thinking about the future; to move outside of the box of day-to-day management to fundamentally rethink what needs to be done to improve their schools.
One of the factors contributing to rapid development of statewide reform plans is the compatibility of Goals 2000 with pre- existing State and local reform efforts. We are not asking States and school districts to start over and re-do their own plans according to some Federal blueprint. Instead, Goals 2000 provides a vehicle for pulling together State and local reform efforts into a comprehensive plan linked to high standards for all students. Let me give you an example.
Oklahoma is going to use the $1.2 million in its initial planning money to (1) begin implementing the recommendations of the Oklahoma Commission on Teacher Preparation, (2) help local school districts develop their own Comprehensive Local Education Plans, which are already required by the Oklahoma State Board of Education, and (3) help to pull existing but separate technology initiatives together. Goals 2000 doesn't change what the State of Oklahoma wants to do; we speed up the process and help make the new connections.
Goals 2000 is also central to all of our efforts in the last two years to redesign our Title 1 program, which sends approximately $7 billion to local school districts that have a large number of high poverty schools. Title I, as you know, has been at the very center of the Federal commitment to helping disadvantaged students and is a major factor of the high school dropout rate for African-Americans has declined by 50 percent in the last twenty years.
But we still have a long way to go. We know, for example, that about 44 percent of all the people on welfare rolls are high school dropouts; and 82 percent of all the people in this nation's prisons and jails are also high school dropouts. That tells you something.
If we want to end welfare--if we want to keep people from getting on welfare in the first place--and keep them from going down the road to violence and spiritual numbness--then we need to keep our focus on helping young people learn their way out of poverty--and I mean all children, black and white--and this can only be done by setting high standards.
I will be the first to tell you that about the surest way to create an angry 16-year-old illiterate dropout is to give that young person a watered down curriculum from first grade on which tells him in no uncertain terms: young student, you aren't good enough to learn anything hard, so why even try.
We now know that changing our expectations of what poor and disadvantaged children can achieve is central to helping them learn their way out of poverty. Two decades of research tell us that disadvantaged young people can learn more than we generally expect of them. This is why reform of Title 1 is linked to and framed by the commitment in Goals 2000 to high academic standards.
My point in this rather lengthy explanation is to suggest to you that if you are for real change in how Federal programs function, you are going to have to resist the temptation to take the easy way out and cut the funding for these new programs.
As you review the 1995 appropriation I want to also emphasize a critical point regarding the timing of appropriations for the Department's programs. Most of our programs are what we call "forward funded," meaning that funds are appropriated in one year for use during the following academic year. Thus, the 1995 appropriation primarily supports school year 1995-96, and most of these funds will be awarded after April 1 of this year.
This funding mechanism was developed by Congress over a period of years-?in a bipartisan effort-?to ensure that States, school districts, and schools know in advance of their pending allocations. Most of them have already taken into account their expected 1995 awards as they have developed their overall plans and budgets in coordination with State legislatures and local school boards, and many districts have almost completed their planning process for the 1995-96 school year.
I point this out because this funding procedure, at first glance, makes it appear to be easy to reduce these programs because 1995 awards have not yet been made. However, it is important that we keep in mind the impact that any reductions in these programs would have on the plans and budgets of States, school districts, and postsecondary institutions.
Many States, for example, are required by State law to notify teachers if they are not going to be retained in the next school year. California, for example, must notify its teachers by March 15th. If funding is cut after that date, districts will have to retain the teachers whom they pay with Federal dollars even if they do not get the funding. I urge the Committee to recognize that reducing forward funded money will play havoc at the local level and would become another example of what is wrong with Washington.
Let me now turn my attention to what we are doing in higher education. The American middle class is what it is today in large part because the Federal government has made it a national priority to give every individual who can make the grade access to a higher education. This has been a national education priority ever since the G.I. Bill passed 50 years ago.
In the last 20 years alone, to illustrate this point, 40 million Americans have gone to school on a Federal student loan. I have no doubt that some Members of this Committee and your Committee staff went through college with the support of Federal student loans.
In 1995, about 75 percent of all the student aid funding in this country comes from the Federal government. So we have had a very big stake in, and continue to have a very positive role in, helping to maintain and expand the American middle class as we know it today. To that end we have modestly increased funding for Pell Grants and created a new direct lending program that will save taxpayers $4.3 billion by 1998 and save students $2 billion in interest by 1998. This program is succeeding in large part because we are making use of every modern technology, cutting the processing time from three weeks to 24 hours for the average loan.
We have done a great deal of streamlining of this Department's programs in the last two years and we will certainly do more. We are the smallest Cabinet agency in terms of employees even though we have the 7th largest budget--almost all of it supporting better education in local schools and colleges.
Here I want to speak directly to the suggestion that we can get a whole lot smaller by recreating this Department as an Office of Education. When Education was part of HEW, the Office of Education and other related agencies employed 7,700 individuals. Today, we have about 5,000 employees, even though we have been asked to manage a great many more programs.
We have worked hard to create and instill a new management ethic and structure in this Department, an area of concern that was too long ignored in past years. Indeed, we have made a good down payment in fundamentally restructuring the way this Department works, including the development of a strategic plan with performance indicators.
In the specific, we have decreased the student aid default rate from a peak of 22 percent to 15 percent at a substantial savings to taxpayers. We intend keep driving that default rate down even further. We have also increased our collection efforts. In 1990, defaulters returned $879 million to the government. In 1994, we collected $1.5 billion.
Finally, I would like to point out that in each of the past two years, our budget request has included proposals that would have saved hundreds of millions of dollars by eliminating unnecessary programs. At the same time, by making these tough choices, we were able to propose increases for higher priority programs and initiatives that would encourage and help communities, States, and postsecondary institutions to address today's education challenges.
In his 1995 budget, for example, the President proposed to eliminate 34 programs for a total savings of more than $600 million. Congress did agree to 14 of these proposed eliminations (included 2 that we had not recommended), for a savings of $82 million.
We are currently in the process of finalizing decisions on our 1996 budget, including any proposed rescissions for 1995. As you know, the President will transmit our budget to you on February 6, and I shall be prepared to testify or to meet with you on the details of these proposals after that date.
I want to emphasize that in developing our proposals over the past two years, we have worked very hard to take a rational, management-oriented approach to the problem of program proliferation. Cutting unnecessary programs is not just a matter of saving money, but a critical component of the President's efforts to reinvent a government that works better and costs less.
In closing I want to go back to where I started and re- emphasize to Committee Members that the American people want to invest in education. They are very pro-education. We can always do better in managing our programs so that they are truly accountable to the American taxpayer. I am not averse to change or new thinking and I look forward to working with new Committee Members to understand their concerns and priorities.
But I would urge the Committee to hesitate before putting education funding on the chopping block. The need to balance this budget must be balanced against the need to invest in our nation's future. For many Americans deficit reduction and investing in education are the two essential ways we can secure our nation's future economic prosperity and assure all Americans a real opportunity to be part of the broad American middle class.