WASHINGTON - To prod schools and states to innovate and improve, President Barack Obama is putting more than $4 billion into the hands of Education Secretary Arne Duncan to reward successful reforms and those who think outside the box.

Obama said America's educators must innovate because the status quo just isn't doing the job.

"Our education system is falling short," he said. "We've talked about it for decades, but we know we have not made the progress we need to make."

He added that it is a crisis for the entire country, not just its students.

"Countries that out-educate us today will out-compete us tomorrow," the president added. "The future belongs to the nation that best educates its people."

Duncan said they are looking for people "willing to break the mold."

"To push a very strong reform agenda (and) to recognize and reward excellence," he said.

One such innovator is Mike Feinberg, co-founder of the Knowledge is Power Program (KIPP)-- one of the country's largest, most successful charter school networks.

"The basic recipe of why KIPP works is great teaching and more of it. It's as simple as that," Feinberg said. "If there's any secret sauce, it's how you build a culture so students, parents and teachers want to be there, choose to make a commitment to each other and feel motivated to do this work."

Still, Duncan and Obama are courting controversy with key constituencies, saying the money will only go to states that allow more charter schools and link teachers' pay to their students' performance.

"Success should be judged by results and data is a powerful tool to determine results," Obama said. "We can't ignore facts."

Some teacher unions and backers of the status quo will balk at such demands.

"But we have to have a set of players around the country who can lead us as a nation where we need to go," Duncan added. "Status quo simply isn't good enough."

Obama said the money is not meant to impose Washington's ways on the states, but truly reward the best ideas.

"The most effective and innovative approaches will be developed outside of Washington in communities across this country," he said. "The best ideas will come from educators."

Many say the program provides an unusually large amount of money for an education secretary to disperse.  It's more than the discretionary funds given to all the education secretaries in the last three decades combined.