Differences over education philosophy--more than money--loom as a major stumbling block toward reaching a final agreement on the budget when White House and congressional negotiators meet again today.

Officials are tackling many issues--including buying more public land and hiring more police officers. But one of the most contentious issues is whether Republicans are willing to pay for the second installment of President Clinton's plan to hire 100,000 new teachers over five years.

The two sides are relatively close in terms of money--Republicans have appropriated $1.2 billion to reduce classroom sizes, Democrats want $1.4 billion. But they bitterly contest how it should be spent.

Democrats want it spent on more teachers. The GOP plan gives a preference to hiring new teachers, but would allow school districts to use the money for teacher training, technology or other initiatives if they saw those needs as more urgent.

House Speaker J. Dennis Hastert (R-Ill.), who taught high school and has a master's degree in education, said in an interview last week that he decided early this year to devote more money to education while moving more "decision-making back to local school districts."

"I have a pretty simple philosophy of education. It's put good people in the classroom who can communicate with kids and know their subjects, and probably good education will take place," Hastert said. "So 'one shoe fits all' doesn't help everybody. As a matter of fact, it helps a few and penalizes some."

House Appropriations Committee Chairman C.W. Bill Young (R-Fla.) said in the GOP's weekly radio address yesterday: "It makes far more sense to have parents, teachers and local school officials make decisions about the education of our kids than federal bureaucrats."

GOP leaders such as Majority Leader Richard K. Armey (Tex.) and former House speaker Newt Gingrich (Ga.) resisted the 100,000-teachers plan last year but ended up offering some praise for it after it was included as part of a larger budget deal.

This year the GOP took a slightly different tack--devoting $300 million overall more than Clinton to education, but spending the money differently--a move that moderate Rep. Nancy L. Johnson (R-Conn.) acknowledged was "part of a competition with the president."

Democrats remain unsatisfied, saying the GOP plan will reduce the program's impact and undermine more comprehensive school reform.

"You need smaller class size because if you don't, teachers who are being asked to do everything by our society are overwhelmed," said Rep. David R. Obey (Wis.), the top Democrat on the Appropriations Committee. "I don't believe in a single bullet. But this is a very important bullet in the gun to improve our schools, and I don't want it watered down."

Several studies support the lasting value of smaller class sizes, including a Tennessee study that followed 6,000 children from kindergarten through third grade between 1985 and 1989. It showed that children in classes of 13 to 17 students not only outperformed their peers then, but follow-up studies showed they continued to score higher on standardized tests through high school.

The Education Department released a study by the Council of the Great City Schools showing that more that 40 of the nation's largest school districts have used federal money from the program to hire 3,500 teachers and give development training to more than 22,000.

Educational experts are also divided on how federal funds should be directed, with some supporting a focus on class size and others advocating a more flexible approach.

"Both sides of this argument are perfectly plausible," said William Dickens, a senior fellow at the Brookings Institution.

Paul Hill, a professor in the University of Washington's Evans School of Public Affairs, warned of unintended consequences. He noted that when California dictated in 1996 that all first- and second-graders learn in classes of no more than 20 students, the best qualified inner-city teachers were lured away to suburban schools that had more money to hire them.

"That has a disastrous effect," Hill said. "It's a case of a federal mandate that sounds awfully good until you look beneath it."

Johnson noted that some of the poorer schools in her district do not have the space to build more classrooms and hire more teachers, so they would lose out on the new funds altogether.

"I want them to get the money," Johnson said. "They need to make the decision, do we need teachers, or teachers aides, or more technology."

But Democrats argue there is no substitute for new teachers, who could address problems ranging from youth violence to simply disruptive students. House Minority Leader Richard A. Gephardt (D-Mo.) has been holding a series of "education dinners" for members of his caucus, according to his spokeswoman Laura Nichols, and the consensus was that the 100,000-teacher program remains their highest priority.

"Not only in our polling, but in members' experience in talking to constituents, to parents and to educators, the issue of class size is the number one issue," Nichols said.

But Sen. Arlen Specter (R-Pa.) and Rep. John Edward Porter (R-Ill.), who oversee the labor, health and education spending bill and will likely meet with Clinton officials today on the issue, indicated they were committed to keeping the funding flexible.

"It's simply a matter of choosing priorities," Porter said. "Under the Constitution it's up to us to dictate policy. The president can say what he doesn't like about our policy, but he doesn't get to dictate policy."

CAPTION: Speaker J. Dennis Hastert pushes local control of decision-making.