Below, the folks at Baird summarize the situation well. When the hope for strong accountability measures in NCLB II lies with Democrats, many investors are going to stop and think about whether it might be better to wait until after reauthorization is signed into law.  Your editor expects investors to sit on the sidelines until the situation is clarified.

If you conclude that reauthorization of the kind of law required to let school improvement industry thrive is about the moderates versus the extremes, rather than Democrats versus Republicans, your editor agrees. But this means you want the vote to come early this summer or after the election. The first is unlikely, and the latter is a wild card.

If you are a school improvement provider looking for investment, expect to wait. And if you think the guts of NCLB's accountability provisions are going to be ripped out, it might be time to take another look at that offer from the publishing company.

––––––––––––––––––––––––––––––––––––––––

President Bush persisted in his public advocacy for the reauthorization of No Child
Left Behind this year as Republicans continued to lead the backlash against the law.
President Bush began March by stumping for NCLB reauthorization with changes,
but he warned against excessive changes including weakening compliance
requirements. Over 57 GOP lawmakers endorsed the A-Plus Act, a piece of
legislation that would fundamentally gut NCLB by allowing states to receive federal
aid even if a state opted out of all of the testing requirements. The group of 57
included party heavyweights such as House Minority Whip Roy Blunt (R, MO),
Senator Mel Martinez (R, FL), chairman of the Republican National Committee, and
presidential hopeful Senator Sam Brownback (R, KS). Critics such as Senator John
Cornyn (R, TX), a co-sponsor of Senate version of the bill, view NCLB as a federal
encroachment on state and local control of education. Democrats joined the White
House in attacking the A-Plus Act for removing the accountability standards.

Amy W. Junker, Neil Macker, Class Notes, April 2007.