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By waiving certain requirements in the education law known as No Child Left Behind, the U.S. government has been able to send some states an additional $2.8 billion in total for schools, Education Secretary Arne Duncan said at a Senate hearing on Thursday.
"We've tried to free almost $3 billion in ... money under No Child Left Behind that was prescribed by Washington," he told the Education Committee.
"We don't have the best ideas here. The best ideas come from the local level."
No Child Left Behind, the major federal schools law passed in 2001, tied funding to students' performance on standardized tests, and penalized schools for "failing" - measures that educators and lawmakers, including Duncan, have said were too restrictive.
The law nominally expired five years ago and states have operated under funding extensions, as well as President Barack Obama's smaller grants such as "Race to the Top."
In late 2011, Obama offered states waivers to some parts of No Child Left Behind, as long as they followed his requirements on college preparation, testing and boosting graduation rates.
"Providing waivers was always, always our 'Plan B,'" said Duncan about the lack of new legislation.
So far, 34 states and the District of Columbia have been able to waive out of No Child requirements. Duncan said his agency is still considering "seven to eight requests."
The committee passed a new version of the education law last year, but the legislation did not make it to the full chamber for a vote. Chairman Tom Harkin, a Democrat from Iowa, said he hoped a new bill will be approved by the full Congress for 2013.
"My team and I put in hundreds and hundreds of hours into what turned out to be a fruitless effort," Duncan said about helping draft the last bill. "And in all candor I would have liked to have gone to waivers earlier to give states more time to be thoughtful."
Republicans at the hearing said the waivers replaced one set of federal requirements with another, leaving states and school districts little autonomy.
"This simple waiver authority has turned into a conditional waiver, with the secretary basically grabbing - grabbing's not the right word - having more authority to make decisions that in my view should be made locally by the state and local government," said Sen. Lamar Alexander, of Tennessee, the most powerful Republican on the committee.
Duncan countered that criteria for the waivers were simply to keep schools accountable and ensure states "follow through" on their commitments.
State and local governments receive about 10 percent of their education funds from the federal government but public schools take up huge chunks of their budgets.
The 2007-09 recession drove down their revenues, particularly the property taxes that cities and school districts use for the bulk of education funding. The 2009 federal economic stimulus plan provided extra money for education, most of which was distributed by the end of 2010.
Recently, states have asked for greater flexibility in how they spend federal education dollars, saying waivers do not work for all states and are a temporary fix.
Senators from rural and small states took issue with Race to the Top, with Vermont Sen. Bernard Sanders, an Independent, saying that "a relatively small amount of the states received the bulk of the money."
"New York state submitted an application for which they received $700 million. Their application was 450 pages long with an appendix of 1200 pages," he said. "The state of Vermont for example ... does not have the resources to put together an application like that for every federal education program."
(Reporting by Lisa Lambert; Editing by David Gregorio)