With an emphasis on 21st-century education, President Obama called for better early childhood education programs, tougher teaching standards, and increased pay for outstanding educators and desperately-needed math and science teachers.

Obama stressed the danger in letting U.S. education fall behind, saying the nation’s place as a global economic leader will be put at risk if the U.S. does not do a better job of educating students.

“Economic progress and educational achievement have always gone hand-in-hand in America,” he said.  “Education is a prerequisite for success.”

The U.S. education system is in dire need of an overhaul, he said, and the nation’s ability to compete globally will be severely compromised if education is not reformed.

“Despite resources that are unmatched anywhere in the world, we have let our grades slip, our schools crumble, our teacher quality fall short, and other nations outpace us,” Obama said. “The relative decline of American education is untenable for our economy. … What is at stake is nothing less than the American dream.”

The president outlined four major areas of education reform: early childhood education programs; tougher standards, assessments, and accountability; recruiting, rewarding, and supporting outstanding teachers; and promoting excellence and innovation in U.S. schools.

Education Secretary Arne Duncan will examine and evaluate education programs based on their effectiveness, he said, and funds from ineffective programs will instead be directed to early childhood initiatives.

Studies have shown that children in early childhood education programs are more likely to perform well in school, attend college, hold a job, and earn more in that job. Obama’s education stimulus package allots $5 billion for federal Early Head Start programs.

Under Obama’s reforms, states would be eligible for an “early learning grant” that Obama will ask Congress to approve, provided they develop cutting-edge programs and outline plans to raise the quality of their early education programs and prepare children for kindergarten.