While there is broad consensus on Capitol Hill that the No Child Left Behind Act needs improvement, questions about federalism are dividing the two parties as Congress moves forward on reauthorizing the Bush administration’s signature education program, which expires at the end of fiscal 2007.

The 2002 law sets performance standards for schools with a goal of having all children reading at their grade level by 2014. At a joint hearing today, the Senate Health, Education, Labor and Pension Committee and the House Education and Labor Committee began work on rewriting the legislation, and partisan differences were already evident.

Democrats called for more federal guidance and funding for schools to help them meet the 2014 goal, while Republicans argued for curtailing federal guidelines and giving state and local communities more flexibility to meet those goals.

Senate Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.) called for additional federal funding for education and said, “If we shortchange our schools, we shortchange America,” Kennedy said.

But Republicans, led by Rep. Howard McKeon (Calif.), ranking member of the House Education and Labor Committee, and Rep. Pete Hoekstra (Mich.) disagreed, calling instead for greater state authority and a larger role for parents.

Too much federal involvement undermines states’ freedom and parents’ rights, Hoekstra said. Efforts to implement greater federal control would make the educational system “beggars to Washington, with more rules and regulations,” he added.

To that end, Hoekstra and McKeon are introducing legislation that would make major changes to the act.

McKeon’s bill, the Empowering Parents Through Choice Act, introduced during the hearing, would grant school districts greater flexibility to offer scholarships for students to leave non-performing schools for another public or private school of their parents’ choosing. These non-performing schools would include institutions that fell short of federal performance standards for five consecutive years.

“If we are truly serious about strengthening NCLB, then we must get truly serious about giving parents more tools so their children can thrive under it,” McKeon said in a statement. “And that starts by empowering them with more choice.” States, school districts and private organizations also would be able to compete for additional dollars to fund supplemental educational services, such as after-school tutoring.

Meanwhile, Hoekstra is due to introduce legislation on Thursday that would also grant states and parents more control over school performance. The Academic Partnerships Lead Us to Success Act, which also has the support of Sens. John Cornyn (R-Texas) and Jim DeMint (R-S.C.), would “offer states and schools flexibility to improve student achievement outside of burdensome federal regulations,” according to a press release.

But Rep. George Miller (D-Calif.), the Education and Labor Committee chairman, dismissed Hoekstra’s criticism of federal involvement in education.

“It’s been that way for 50 years,” he said.