President Bush signed into law Tuesday the most sweeping education reform bill in decades, the result of a bipartisan agreement that ultimately requires new reading and math tests, employs the first step towards implementing a school voucher program in failing school districts, and raises teacher standards.

"We owe the children of America a good education and today begins a new era, a new time in public education," Bush told students and teachers at Ohio's Hamilton High School.

Bush extolled the virtues of the bipartisan cooperation that allowed him to produce such a sweeping overhaul of education. He praised Sen. Edward Kennedy, chairman of the Senate Health, Education, Labor and Pensions Committee, who helped shepherd the $26 billion bill.

"The folks at the Crawford Coffee Shop would be somewhat in shock when I told them I actually like the fellow," Bush said, recalling a conversation about Kennedy that Bush had last week with his hometown residents. "He is a fabulous United States senator. When he's against you, it's tough. When he's with you, it is a great experience."

The president emphasized the local benefits of the bill, which he said places the freedom to spend resources where they may be used most wisely — as well as the responsibility of those funds — with the teachers, districts and parents at the district level.

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"In Washington, there are smart people there, but the people who care most about the children of Hamilton are the teachers here," he said. "We believe the best path to education reform is trust the local people. Hold people accountable and liberate the school districts to meet the standards.

"I can't think of any better way to say to teachers, 'we trust you,'" he added.

Federal control of resources and regulations that dictate public school policy have been the root of contention between Democrats and Republicans. Bush said this bill expresses interests of both parties: Requiring federal accountability to and increased resources from Washington, but handing over responsibility for testing structures and funding uses to local authorities.

Both parties, however, want to fight illiteracy in poor communities, and Bush said that with this package, there is no excuse for failure.

"We have money in there to make sure that teachers know what to teach to make it work," he said. "There are no excuses, in my opinion," not to ensure that "no child is left behind," he said, referring to his 1999 campaign promise and the legislation's given name.

Bush was holding education events in three separate states, beginning in America's heartland, and then setting off to New Hampshire and Massachusetts. He is joined in all three locations by Kennedy, D-Mass., Sen. Judd Gregg, R-N.H., Rep. George Miller, D-Calif., and Rep. John Boehner, R-Ohio, all credited with pushing the bill through Congress.

In New Hampshire, home of the first presidential primary, Bush planned another speech and a private meet-and-greet with 250 campaign donors. Bush lost the New Hampshire primary by 16 points but said he holds no grudges.

"I appreciate so very much my friend Judd Gregg from the state of New Hampshire being here. He was my campaign manager in the New Hampshire primary. I still invited him to come with me," he joked while in Ohio.

It was Bush's first trip to New Hampshire as president and his third to Ohio, the nation's seventh-largest electoral prize.

The return marks the triumphant fulfillment of the president's campaign pledge to ensure that "federal money will no longer follow failure." However, some of the president's proposals did not survive the final draft.

Bush had proposed testing students each year. The bill requires annual state tests in reading and mathematics for every child in grades three through eight, beginning in the 2004-05 school year. In 2005-06, schools will have to add science tests.

Public schools where scores fail to improve two years in a row could receive more federal aid, but if scores don't improve, students could receive tutoring or transportation to another public school. The compromise is a shift from a Bush proposal to allow students to use federal funds for private education vouchers if the public schools were failing.

According to the bill, a school in which scores failed to improve over six years could be re-staffed.

Schools must raise the percentage of students proficient in reading and math and reach 100 percent within 12 years. Schools also must close gaps in scores between wealthy and poor students and white and minority students.

The bill requires states to ensure that within four years all teachers are qualified to teach in their subject areas.

Schools also must develop annual "report cards" that show their standardized test scores compared with both local and state schools.

The Associated Press contributed to this report.