This report provides an overview of the federal stimulus--also known as the American Recovery and Reinvestment Act (ARRA)--and where California stands in relation to the requirements. It also looks at the thinking behind the four reform areas (teacher and administrator effectiveness; data systems; standards; and turning around low-performing schools); the metrics used to measure progress on them; and the state's initial efforts to address these new federal expectations. The report concludes with a discussion, featuring the opinions of some leaders in Sacramento and Washington, of the short- and long-term implications for California. [Note: As this report went to press, California legislators were meeting in a special session to consider measures that would improve the state's chances of winning a grant from a new federal program called "Race to the Top."]