Arne Duncan, Education Secretary, Discusses Need For Reform On MSNBC (VIDEO)

WATCH: Arne Duncan Talks Education Reform With MSNBC's Andrea Mitchell

Education Secretary Arne Duncan sat down with MSNBC's Andrea Mitchell to discuss the challenges facing public schools and the need for education reform.

With federal spending devoted to defense and the economy, schools have limited resources, he said.

"We have to continue to invest...budgets reflect our values, they reflect our priorities."

Duncan also warned that cultural values may be partly to blame.

"As a society, we don't value whats truly important. We value celebrity, we value athletes, we value movie stars. We don't value what I would argue are some of the most important if not the most important people in our country. Those are the teachers who are teaching our children every single day," he said.

Explaining how some schools can thrive despite tighter budgets, Duncan said, "You see some states and some districts that in these tough economic times are being very creative and doing some really innovative things, others are paralyzed...this is a test of leadership."

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