States Could Lose Out On Stimulus Cash

The Obama administration warned states it may withhold millions of dollars if they use stimulus money to plug budget holes instead of boosting aid for schools.

Education Secretary Arne Duncan made the threat last Thursday in a letter to Pennsylvania Gov. Ed Rendell, but his words could have implications for Texas, Arizona and other states.

And they raise the stakes for the White House, which will come under intense pressure from Congress if Duncan does hold back some money.

In the letter, Duncan wrote he is displeased at a plan by Pennsylvania’s Republican-led Senate to reduce the share of the state budget for education while leaving its rainy-day surplus untouched. To do so “is a disservice to our children,” Duncan wrote.

View the complete article.
(USA Today 06.22.09)

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