When the cost of inflation is taken into account, the cut is almost $2 billion in real terms for schools, colleges and libraries.

I compare it to playing a musical chairs game. There is not going to be a chair for everybody.

The federal deficit is a concern, but education should not be cut. Increased education investment must be an essential part of the strategy to reduce the deficit. Education investments will more than pay for itself by increasing economic productivity and innovation and reducing the incidence of costly social issues like unemployment, poverty and crime. When our students succeed, our nation succeeds.

There are risks that inflation could heat up at bit and therefore the risk that the Fed might have to be a bit more vigilant than the market expects is the thing that makes me the most cautious.

I think that fears of inflation are overblown, and that when we consider energy prices have pulled back a bit, there doesn't seem to be a lot of evidence that inflation has propagated in the economy beyond energy.

The really surprising thing is the lack of inflation given this kind of growth.