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With nearly $100 billion to distribute from the economic stimulus, Education Secretary Arne Duncan has had an unusual first year in office. Devising ways to dole out the money -- more than one and a half times the amount appropriated to the department the previous year -- has shaped Duncan's role as America's education chief. Race to the Top, the Obama administration's $4.35 billion grant competition for stimulus funds, sent states into a legislative scramble to boost their chances of getting a share -- 40 states applied last week for the first round of the competition. Signaling a longer-term commitment to the program, President Obama recently announced that he would ask Congress for an additional $1.35 billion.

In 2009, Duncan also conducted a "listening and learning tour" to gather feedback on the reauthorization of President Bush's 2002 No Child Left Behind law, which is three years overdue for renewal. The Education secretary sat down with National Journal recently to reflect on the past year and the next one. Edited excerpts follow.

NJ: Did your listening tour influence the parameters established for the Race to the Top competition?

Duncan: It really helped to shape them. Everybody wants us to raise expectations; they think the bar is too low. Teachers everywhere want to be held accountable, but they want it to be fair, and they want it to make sense. Folks want schools to be doing more, to be open longer hours, and to be community centers. Parents want to be engaged, and everyone wants a more rounded curriculum.

NJ: With the additional funding for Race to the Top, what's the significance of allowing districts -- not just states -- to compete for the money?

Duncan: It's very important. As you know, education in our country is both a state and a local commitment. We have seen this phenomenal movement at the state level, and I couldn't be more pleased with that. But you also need that kind of innovation at the local level, and we are doing everything we can to push both.

So whether it's the Investing in Innovation Fund, which districts can apply for, or the Promise Neighborhoods work that tries to build upon Geoffrey Canada's phenomenal work with the Harlem Children's Zone, we want to push state innovation and district innovation.

We also want to push innovation among universities, nonprofits, local unions, charter organizations -- whatever it might be -- and if we can get all those things working together, then we have the chance to do something extraordinary.

NJ: The competition demands a strategy for improving the lowest-performing schools, but the vast majority of public schools don't fall into that category. What have you learned about improving other schools?

Duncan: I divide schools into three general buckets. There are schools in this country, in virtually every district, that I would argue are world-class. We need to learn from them, reward them, and get out of their way.

There are some schools in the middle, which I think you are referring to, that aren't world-class yet but are getting better every year. I think Washington is never going to have the best answers for how they should improve. What we want to do is empower local school districts, local principals, and local school boards, to continue to work with them. Let's give them tools and hold them accountable for results. But those answers are going to be very different at each school. For us to try and manage that from Washington makes no sense.

One of the things we want to do much better as we reauthorize [the education law] is to recognize excellence. Under NCLB, there were 50 ways to fail and no real rewards for success. What we've argued is that for the bottom 1 percent, those schools that simply aren't working for children, folks should be more tough-minded. We are saying that looking for incremental change there isn't good enough.

NJ: Do you plan on moving ahead to reauthorize the law in 2010?

Duncan: Absolutely, that's our goal. We had a fairly long meeting [on January 20] with the Big Eight, the Republican and Democratic leaders in both the House and the Senate [with jurisdiction over education]. I think we can have great bipartisan support for where we want to go.

Education has to be the one issue in this country where we all put politics, ideology, and egos to the side and do the right thing for our children. We have a dropout crisis in this country. What we are doing now, I think, is morally unacceptable and economically unsustainable.

For me, the meeting was a home run. What you had was the Big Eight all say, let's do it, let's do it together, and let's try and work on it now. It doesn't guarantee success; things could fall apart at any time. But there's a real sense of commitment, a real deep understanding that this has to be done in a bipartisan way.

NJ: What's the worst suggestion you have gotten for renaming NCLB?

Duncan: Leave it the same; some folks say leave it put. Frankly, NCLB is a toxic brand, and we have to change the name. That's a symbolic part; we also have to change the substance of it. I think staying with the current name would not make sense, and I promise you we are not going to do that.

During the tour, you met with mayors, superintendents, governors, teachers, and parents. Who was the most inspirational?

Duncan: I'll get in trouble if I pick one, so I may have to skirt that question. I will tell you that one of the reasons I'm so hopeful is that I'm seeing more courage shown at every level. Part of why education is so complex, and so hard in this country, is because you need such a great alignment among different people. You need the governor engaged, you need the state superintendent, you need the school boards, you need the local superintendent, you need teachers and principals and parents. And all these different constituencies have to work together. But dramatic changes in state laws made this past year to foster innovation, and 48 states coming together to talk about common standards, make me hopeful about the future.

NJ: At the outset of your tour, you cited internationally benchmarked standards, as well as common standards for different states. Where are your thoughts on that?

Duncan: Well, this [common-standards initiative] is not being led by us, which I think would be inappropriate. It is being led, very appropriately, by state school chiefs and by governors working together.

What I have said repeatedly is that our children today aren't competing within a district or within a state for jobs; they are competing with children in India and China. I think our children are as smart, talented, and committed as children anywhere. But our children have been at a competitive disadvantage, and that's very troubling to me. I want to level the playing field. If our standards can tell us whether our children can compete with anybody in the world, then we could feel very good about where our country is going. If we level the playing field, our students will do just fine, they'll do us proud.

NJ: Now that you have had a year on the national stage, talk a little about the trade-offs of working at this level versus the city level.

Duncan: I miss the work in Chicago; I miss the community. But I have to tell you, this is the chance of a lifetime. For me, this work is really personal. My mother started an inner-city tutoring program in a church basement 48 years ago; she is still working really hard every day. And to think of where my family started, and now to have this opportunity. It far exceeded my wildest hopes, but it's also flown by, and I feel this real sense of urgency.

Your time here, by definition, is limited -- you don't have a lifetime. The question for me, every day, is: Can we push the kind of change over the next couple of years that's going to last for the next couple of decades? Anyone can spend some money for the short term; that's not hard. Can we use those resources to leverage change that's going to last way beyond when that last dollar is spent? If we can do that, then we change education in this country forever. That's why we're here.

NJ: Apart from a history teacher in Texas whom you called because of the comments he posted on the tour blog, did you reach out to anyone else who contacted the Education Department that way?

Duncan: Almost every week I'm e-mailing folks back or making phone calls. People have lots of passion and lots of opinions about education. Whether its teachers, principals or local superintendents, or parents or students. I've met some extraordinary students along the way and I've tried to stay in touch with them. Kids that overcome things that would have been, just, I couldn't begin to have gotten through as a child. So, keeping those relationships are just important to me personally.

NJ: Is there an example of a particularly inspirational student or teacher that's worth highlighting?

Duncan: There are phenomenal students. I met with a whole set of students in San Diego who came from extraordinarily tough backgrounds. One had been locked up for a while; one had been homeless for 10 years living in shelters and cars. And these are students who are about to graduate from high school and go to some very competitive universities. [They demonstrated an] extraordinary ability to persevere and overcome the odds. There are literally hundreds of thousands of these stories

NJ: What's one thing you will do differently as a result of the listening and learning tour?

Duncan: One thing we are going to do is keep listening. I think I visited 35 or 36 states -- with the entire staff, we were in all 50 states. It was remarkable; every place you go you learn something or push your thinking. So what we have actually committed to doing -- which was definitely not my game plan coming into this year -- is getting back out to all 50 states. I might do a little less traveling and have my team do a little bit more. But I think it is just so important that we continue to have a national dialogue and continue to learn what's going on. So that was not my anticipation, but it was so helpful that we'd be really silly not to continue that process.

NJ: What was the most unexpected result of the tour?

Duncan: Coming from Chicago, a big city, I really felt I needed to spend lots of time in rural communities. That was a weakness of mine coming into this job; I grew up in Chicago. Whether it was rural Alaska, an Indian reservation in Montana, New Hampshire, Vermont, or West Virginia, I tried to really get out and understand the rural issues. There are some unique challenges there, but at the end of the day, what really hit me was how similar education challenges are across the map.