U.S. President Barack Obama is introducing a $4 billion effort to make America's schools more competitive with those in other countries. The president is calling the iniative the "Race to the Top."

President Obama says the U.S. education system is falling short, and he says that is endangering the country's economic future. "In an economy where knowledge is the most valuable commodity a person and a country have to offer, the best jobs will go to the best educated, whether they live in the United States or India or China," he said.

Mr. Obama is challenging states and schools to raise their educational standards. He says the ones that do will have a better chance of receiving part of the more than $4 billion in the Race to the Top Fund.

"This is one of the largest investments in education reform in American history. And rather than divvying (dividing) it up and handing it out, we are letting states and school districts compete for it," he said.

The president says the states and school systems that apply for the grants will be judged consistently on their efforts to hire good teachers, adopt strong standards, and link student performance to teacher pay.` "Better standards. Better teaching. Better schools. Data-driven results. That is what we will reward with our Race to the Top Fund," he said.

The criteria for the "Race to the Top Fund" will also include lifting the cap on the number of charter schools allowed. Charter schools are public schools that must meet certain standards and have fewer constraints thatn traditional public schools.

The education fund is part of the economic stimulus legislation enacted in February.

Mr. Obama has increased education spending by $100 billion overall, and is calling for more money for community colleges and an increase in grants for college students.