No Child Left Behind (NCLB) gives states wide discretion to define what students must learn, how that knowledge should be tested, what test scores constitute proficiency, set standards for high school graduation rates, teacher qualifications, school safety and many other aspects of school performance. As a result, states are largely free to define the terms of their own educational success and some have taken advantage of this autonomy to make their educational performance look better than it really is. In March 2006, the latest in a series of annual reports was submitted to the U.S. Department of Education, detailing progress under NCLB, ranging from student proficiency and school violence to school district performance and teacher credentials. For every measure, a significant number of states used their standard-setting flexibility to inflate the progress that their schools are making and minimize the number of schools facing scrutiny under the law, even though this progress is not confirmed by independent analysis. Policymakers and the public will not continue to support an education system that is not truthful. Federal lawmakers, therefore, have no choice but to confront the issue of how to balance federal and state responsibility for setting education standards. Unless steps are taken to bring state standards in line with reality, NCLB's credibility and Viability may be at serious risk. (Contains 14 endnotes and 8 tables.)