As described in a summary circulating among Republicans in Congress, the draft agreement also would reduce the number of federal education programs from the current 55 to 45. Additionally, economically disadvantaged students in failing schools would be allowed to use federal funds for private tutoring, summer school and other similar programs.
The draft compromise was the result of negotiations among Sens. Edward Kennedy, D-Mass, and Judd Gregg, R-N.H., Reps. John Boehner, R-Ohio, and George Miller, D-Calif., lawmakers involved in writing the final details of the education bill.
The measure was the centerpiece of Bush's first-year legislative agenda before the Sept. 11 terrorist attacks commanded the nation's attention, and Lindsey Kozberg, an Education Department spokeswoman, hailed the developments. "We're very pleased with the progress ... and we look forward to seeing a final bill shortly," she said, adding that key principles of Bush's education plan are preserved in the proposal.
The four lawmakers, who have been conducting closed-door negotiations for months, met again on Tuesday and are expected to present their proposal to the full complement of House and Senate negotiators later in the week.
Other issues remain to be resolved, among them a Democratic demand for more money than Republicans and the administration have agreed to provide, particularly for a program for special education students.
Even so, final agreement on the issues of testing and funding flexibility would clear major obstacles and give fresh momentum to the push to clear the bill through Congress before lawmakers adjourn for the year.
A summary of the proposed agreement was circulated widely among Republicans on Tuesday, and Democrats were preparing to bring members of their rank and file up to date on Wednesday.
Both houses approved education measures by overwhelming margins earlier in the year. At their heart, the two versions are similar, requiring pupils to be tested annually and requiring schools to demonstrate improvement in student performance over a period of several years. Federal help would be available to help schools improve, but if they failed to come up to standards, they eventually could be taken over by the state.
At the same time, the bills differed on key issues.
The Senate bill, for example, required states to administer one federally backed test, the National Assessment of Educational Progress, to measure student performance. The House-passed measure permitted states to use an alternative, a provision designed in part to satisfy conservatives concerned about the federal role in education.
Under the proposed compromise, the federal NAEP test foreading and math would be administered to a sample of fourth- and eighth-grade students in each state every other year. The results would be used to verify "the results of the statewide assessments all students would take," the GOP summary says.
"No federal rewards or sanctions would be based on NAEP," according to the document, and states "can change their state standards without first obtaining permission or approval from the federal government."
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Rewards and sanctions would instead be based on state-designed tests administered annually to students in grades three through eight.
The compromise on flexibility in federal funding is also a hybrid of the House and Senate versions.
All states and local school districts would be permitted to shift federal aid among a specified range of programs. Except for so-called Title I money, which is targeted at economically disadvantaged students, states and local school districts would decide to allocate up to 50 percent of their funding to suit their needs. "Decisions are left entirely to state and local school officials and do not require the approval" of the Education Department, according to the GOP summary.
Additionally, seven states and 150 local school districts would be chosen to participate in demonstration projects granting "additional flexibility in the use of federal funds," according to the summary.
Both the House and Senate bills contained provisions allowing the use of federal funds for supplemental educational assistance in cases of poor students in failing schools. But Bush's original proposal to permit federal funds to be used to pay tuition at a private school was jettisoned long ago.
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