Obama Wants More 'Races to the Top,' But Will States Compete?

Official White House photo by Chuck Kennedy States soon may be able to apply for Race to the Top-like grants in transportation, juvenile justice, early learning and alternative energy.
Amid a growing debate in Washington about the competing budget proposals being peddled by Democrats and Republicans, one aspect of the federal spending plan that President Obama favors has largely escaped notice.

Obama's new budget would double down on the strategy that is at the heart of his signature K-12 education reform initiative, Race to the Top. He wants to leverage tens of billions of federal dollars to get states and localities to make policy changes that his administration prefers.

This time around, however, Obama's policy changes go far beyond education.

While calling for major federal investments in infrastructure has long been an Obama hallmark, he now also wants to set up a sweeping, competitive grant program to entice states to change their laws "across the complete spectrum of transportation policy priorities," according to his budget outline . Major financial rewards could go to states that crack down on distracted driving or those that make it easier for residents to use mass transit or bicycles. At $32 billion, the proposed "Transportation Leadership Awards" would be nearly eight times the original size of Race to the Top, which was just a tiny part of the 2009 stimulus package.

On juvenile justice — an area primarily run by states and localities, with limited federal funding — Obama wants to restructure the grants the federal government does provide by making them competitive, rather than automatic for all states. The change, in the words of the budget proposal, would result in a "new, $120 million Race to the Top-style grant that rewards states for tangible improvements in juvenile justice systems." According to the Justice Department, federal grants could go to states that adopt alternatives to incarcerating young offenders and work to reduce the disproportionately high share of minority offenders who enter their juvenile systems.

On energy, Obama would create a new, $200 million competitive grant program to "reward communities that invest in electric vehicles and infrastructure and remove regulatory barriers." On early childhood education, Obama plans to create another competitive funding stream "for states that are ready to take dramatic steps to improve the quality of their early childhood programs."

The original Race to the Top program for K-12 education also would undergo a facelift under Obama's plan. Rather than being entirely a competition among the states, it would expand into a $900 million race among thousands of individual school districts, giving local leaders far more power to decide whether they want to pursue federally encouraged education reforms in the hopes of winning federal money. Under the current version of the program, governors and state legislators decide whether they want to participate and a few Republicans, including Alaska Governor Sean Parnell and Texas Governor Rick Perry, have declined to do so. The proposed changes would allow the Obama administration to bypass state-level officials and appeal directly to school superintendents and other local decision-makers.

Will the same trick work again?

By most accounts, Race to the Top has been a resounding political success for Obama, even if its policy effects have yet to be proven, and probably won't be for many years.

Forty-six states and the District of Columbia submitted applications for a share of the $4.35 billion that was initially provided by the program, and 34 states changed their laws in the hopes of securing federal dollars. Republican governors who often attack Obama over federal policies ranging from high-speed rail to health care have largely remained silent on Race to the Top, lending the initiative an aura of bipartisan acceptance. And because money for the program initially came in a one-shot installment via the federal stimulus two years ago, Race to the Top has given the president the rare opportunity to drive major education changes straight from the executive branch to the states, without much interference from Congress.

By using his latest budget proposal to apply the Race to the Top philosophy to other policy areas, Obama is banking on a repeat performance. In effect, his bet is that dangling big federal dollars in front of financially hurting states will help drive the changes he seeks. As the fight over the next federal budget begins in earnest, however, many experts believe that the road ahead for Obama's plans will be much rockier than it was for the original Race to the Top.

For one thing, federal stimulus funds are dwindling fast, and any new pots of money for states will have to be appropriated by Congress — including the Republican-controlled House of Representatives, which has shown no inclination to compromise with Obama on budget matters so far. The $32 billion transportation fund that Obama hopes to set up will prove particularly challenging, given its price tag, the fact that the president has offered no specifics about how to pay for it and the general unpopularity of taxes and further federal borrowing.

Even the much smaller, more targeted Race to the Top-style grants that Obama hopes to create in energy and juvenile justice are likely to face resistance on Capitol Hill, and not just because of costs. Juvenile justice advocate groups, for instance, already are complaining about the president's idea to consolidate existing grants into a new competitive structure, arguing that while it may be beneficial to some states, others will be left behind. They say that the current funding system, created by the 1974 Juvenile Justice and Delinquency Prevention Act (JJDPA), is not perfect, but at least ensures baseline funding for all states.

"Before you ask a state to climb a mountain, they have to have a floor to stand on, and for us the JJDPA is the floor," says Tara Andrews, deputy executive director of the Coalition for Juvenile Justice. Andrews says her group was "caught off guard" by the president's plan and is lobbying members of Congress to preserve the more predictable funding ensured by the current system.

In general, says Grover Whitehurst, a Brookings Institution education scholar, competitive grant programs are less attractive to members of Congress than grants that ensure money for all 50 states. After all, Whitehurst says, in any competition "there are going to be losers," and members of Congress do not want their states to be losers.

Race fatigue?

Another potential complication for the Obama administration as it presses forward could be described as "Race to the Top fatigue."

While nearly all states expressed interest in the K-12 education program over the last two years, only 11 were declared Race to the Top winners by the U.S. Education Department. The others put in thousands of hours of work to change their laws and prepare their applications, but walked away empty-handed. That experience could leave a bad taste in some state officials' mouths, particularly if the new prizes they are applying for — a portion of the $120 million in juvenile justice grants, for example — are tiny in the context of state budgets.

Even some state officials who have benefited the most from the Race to the Top caution that placing too much emphasis on competitive grant programs could be a misstep for the Obama administration. Delaware Governor Jack Markell, whose state was one of only two winners in the first round of Race to the Top (along with Tennessee), noted in a recent interview with Stateline that such competitions can reward the states with the biggest and best grant-writing departments, not necessarily those with the best policies.

"Small states like ours don't have a lot of grant writers," Markell, a Democrat, said during the recent meeting of the National Governors Association. While Race to the Top has been a "huge positive" for the nation, Markell said, Obama should "proceed with caution" before replicating it in too many other areas.

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