EXCLUSIVE: Race for School Billions Will Have Winners, Losers, Duncan Says

A Nov. 13, 2008 file photo shows Chicago Public Schools chief Arne Duncan smiling during a news conference in Chicago. Now, as U.S. education secretary, he has $100 billion in stimulus funds to spend on education in the next two years.

President Barack Obama on Friday will unveil the application states must complete for their cut of an unprecedented $4.35 billion in discretionary stimulus funding for education.

The controversial "Race to the Top" program offers one of the first glimpses into how far the Obama administration is willing to go to create reform.

"We have as a country, I think, have lost our way educationally," Education Secretary Arne Duncan told ABC News in an exclusive interview. "We have to educate our way to a better economy. To me, education is the civil rights issue of our generation.

"This is a fight for social justice," he added, "and we want to work with those states that are literally going to lead the country where we need to go."

With more discretionary money at his disposal than all education secretaries in the last three decades combined, and a close personal ties to the president, Duncan may be the most powerful education secretary to date.

Through "Race to the Top," he hopes to prop up states that innovate -- and inspire those that have not. Duncan admitted not all states will qualify, but said that a competitive spirit will drive reform.

"I think there'll be tremendous pressure on states, state legislatures where things aren't happening, by parents saying exactly that: 'Our children deserve a slice of the pie, and we want that pressure,'" Duncan said.

VIDEO: Education Secretary Arne Ducan will foster a program to reward excellence.

The program centers of four basic "assurances" that states must meet to qualify for a piece of the pie -- turning around low-performing schools, in part by expanding charter schools; enacting rigorous, common academic standards; improving teacher quality and beefing up state data systems.

In this race, however, there will be clear winners and losers. States will be judged based on their progress in each of the four areas and -- given the way several states have been using education stimulus money to fill budget gaps rather than to innovate -- it is clear that not all states will be awarded funding.

"This isn't about winners and losers," Duncan said. "This is about challenging the status quo as a country, getting dramatically better and giving every child in this country a chance they desperately need to have a great, great quality education."

Duncan admitted he worries about the students who may suffer because their states will not adopt his requirements, and hopes that the grants will serve as a large incentive for reform.

"We're going to do this in two rounds so districts that aren't doing the right things, that aren't serious about reform, will have a chance to come back," Duncan said. "This is not a federal mandate, this is really just an incentive.

"You'll see some folks who will be sort of business-as-usual and not challenge the status quo," he added, "and you'll see other places where they're really willing to innovate, really willing to push the envelope and get dramatically better -- and that's who we want to invest in."

Some, however, claim that the program is not using nearly enough money to create the kind of reform that this administration is hoping to see.

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