Mr. Obama says nearly all of the education money in the Recovery Act, which will start going out to states this week, is designed to retain teachers.
Education Secretary Arne Duncan threatens to "come down like a ton of bricks" on anyone who defies the administration's plans to bring relief to states like California where 26,500 teachers have gotten pink slips. Across the country, 9 percent of teachers - about 294,000 - may face layoffs because of budget cuts, according to a University of Washington study.
But plans for the money are pulling in other directions, particularly in states with Republican governors:
There are loopholes in the stimulus law for both states and school districts.
Of the $100 billion for education in the stimulus bill, $40 billion comes as part of a fund to stabilize state and local budgets that has fewer strings attached. As the bill made its way through Congress, lawmakers decided not to prohibit states from using the stabilization money to replace precious state aid for schools. That means instead of getting extra help to weather tough times, school districts could wind up with the no additional state aid even as local tax revenues plummet.
State lawmakers and governors in Kansas, Rhode Island and Texas are among those seeking to use their federal stimulus dollars to replace state aid, rather than add to it.
In addition, the law was written so broadly that most of the stabilization dollars can be spent on just about anything - carpet, wallpaper, playground equipment, even new school construction - which may bother Senate moderates who insisted on dropping a new school construction program before they would vote for the bill.
That's because school districts can spend the money as federal impact aid, a relatively small program for poorly funded districts. By contrast, most federal education dollars are supposed to be spent on teacher salaries or academics.
"Congress opened a Pandora's Box to allow districts to use the funds for impact aid," said Michael Brustein, a Washington attorney who represents several state education agencies. "How you enforce against that is anyone's guess."
Santa Ana, Calif., English teacher Isa de Quesada is waiting to hear whether the stimulus dollars will bring her and 10 other teachers back to their school this fall. If not, class sizes at her school and others could swell, hurting the emphasis on quality education.
"Right now, I have 40 in two of my classes; we could go to 50 to 55 next year," she said in an interview.
Recently, de Quesada had the chance to ask Mr. Obama about it in person when the president visited for a town hall meeting: "How are we going to make sure that money comes to our districts?" she said.
Mr. Obama replied that "the lion's share" of the money is to keep teachers on the job.
Duncan said he can come down hard on states that don't comply because he is releasing the money in installments, and because he will award billions of dollars in competitive grants later this year.
"And if we see an instance or two, or whatever it might be, where folks are not operating in good faith," he said, "we will both withhold that second set of money, and we will eliminate them from any possible competition to receive these billions of dollars in discretionary money."
Duncan also said last week he is looking for ways to force money to states where governors have said they would refuse it.
The administration could also face intense political pressure from members of Congress if stimulus money for their states is withheld.
"The jury is really still out on how forceful the Obama administration is going to be on this," said Amy Wilkins, a lobbyist for Education Trust, a children's advocacy group.
"We've heard a lot of secretaries of education talk about rigorous enforcement and, `We are really going to hold them accountable,"' she said. "We rarely get that."
The administration lobbied successfully to attach other strings to the money. In their applications, states must show improvement in teacher quality, data systems, academic standards and tests and supporting struggling schools.
Applications for the stabilization dollars will be available this week, and two-thirds of the money for education, $27 billion, will be released within two weeks of an application's approval. K through 12 dollars are another reason why it may be tough to keep teachers from losing their jobs.
That money goes to states through a formula tied to state spending. The less a state spends on education, the less federal money it gets - and that works against states in the worst financial shape.