A judge threw out a lawsuit Wednesday that sought to block the No Child Left Behind law, President Bush's signature education policy. The National Education Association said it would appeal.
The NEA and school districts in three states had argued that schools should not have to comply with requirements that were not paid for by the federal government.
Chief U.S. District Judge Bernard A. Friedman, based in eastern Michigan, said, "Congress has appropriated significant funding" and has the power to require states to set educational standards in exchange for federal money.
The NEA, a union of 2.7 million members and often a political adversary of the administration, had filed the suit along with districts in Michigan, Vermont and Bush's home state of Texas, plus 10 NEA chapters in those states and Connecticut, Illinois, Indiana, New Hampshire, Ohio, Pennsylvania and Utah.
The school districts had argued that the law is costing them more than they are receiving in federal funding.
The law requires states to revise academic standards and develop tests to measure students' progress annually. If students fail to make progress, the law requires states to take action against school districts.
Reg Weaver, president of the NEA, said his group would appeal.
"Parents in communities where school districts are financially strained were promised that this law would close the achievement gaps," he said. "Instead, their tax dollars are being used to cover unpaid bills sent from Washington for costly regulations that do not help improve education."
The lawsuit alleged that there was a gap between federal funding and the cost of complying with the law. Illinois, for example, will spend $15.4 million annually to meet the law's requirements on curriculum and testing but will receive $13 million a year, the lawsuit said.
Friedman said that the law "cannot reasonably be interpreted to prohibit Congress itself from offering federal funds on the condition that states and school districts comply with the many statutory requirements, such as devising and administering tests, improving test scores and training teachers."
Education Secretary Margaret Spellings said, "This is a victory for children and parents all across the country. Chief Judge Friedman's decision validates our partnership with states to close the achievement gap, hold schools accountable and to ensure all students are reading and doing math at grade-level by 2014."