Money  /  Antecedent

The Democratic Program That Killed Liberalism

How Democrats like Zell Miller and Bill Clinton exacerbated inequality in education

On Tuesday, three former presidents — Jimmy Carter, Bill Clinton and George W. Bush — spoke at the funeral of former Georgia senator and governor Zell Miller, who died last week. Obituaries have focused primarily on how, at the end of his career, the longtime Democrat allied himself with Bush and the Republican Party. To date, Miller remains the only person to have delivered the keynote address at both the Democratic (1992) and Republican (2004) national conventions.

Though his conversion left many with the impression of Miller as a Democratic defector and crusty conservative, the most important component of his legacy was actually the creation of the lottery-funded HOPE Scholarship. HOPE, short for Helping Outstanding Pupils Educationally, led to the spread of merit scholarships, first across the South and then to other parts of the country, in the 1990s and early 2000s.

Miller’s advocacy for HOPE in Georgia signaled the decline of Great Society-era Democratic politics and the rise of a new, middle-class-oriented centrist liberalism focused on using the government to foster a competitive meritocracy rather than to enact social justice and economic fairness. While Miller’s rhetoric focused on the opportunity offered by initiatives like HOPE, the new emphasis on competition provided inherent advantages to privileged students, many of whom did not need government aid. In that way, HOPE embodies the transformation of liberalism that reshaped the Democratic Party and, ultimately, exacerbated economic inequality.

In 1990, after 16 years as lieutenant governor, Miller ran for Georgia’s highest office. Victory required fighting off the rising Republican tide sweeping over the South as the region completed its post-civil rights realignment. Amid a state budget crisis, the lottery offered Miller a means of proposing new education programs without tax increases. Voters bought his promises of painless revenue, and Miller secured a tight victory over Johnny Isakson, who would replace a retiring Miller in the Senate in 2005.

After his win, Miller worked to persuade voters to approve a lottery referendum. Rather than tie gambling revenue to the state education budget as a whole, Miller proposed using lottery income for a new program, the HOPE Scholarship, which he announced in September 1992.

The initial criteria for the scholarship were deliberately simple so that even voters who opposed a state lottery might support the referendum. Any Georgia high school student with a GPA over 3.0 and family income under $66,000 (roughly $115,000 today) would receive one year of free tuition at an in-state public college or university. If the student maintained a 3.0 GPA, the scholarship would be extended into the sophomore year.

The scholarship’s focus on merit, rather than need, was crucial to its political viability. Like other Southern Democrats — including then-Arkansas Gov. Bill Clinton — Miller opposed the expansion of welfare. Clinton and Miller sought to turn their party away from the tax-and-spend liberalism of the New Deal and the Great Society. These policies had become a political millstone in the South, partly because the region’s newly affluent suburbanites presumed that increased government intervention meant the redistribution of their taxes to poor and African American families.

Ignoring historical inequities, the scholarship suited the new Democratic emphasis on the class-neutral and colorblind rhetoric of opportunity. Unlike welfare, HOPE rewarded hard work, as students would earn financial aid with their grades. The scholarship placed the onus of responsibility on families rather than on the state to ensure that students were able to attend college. This structure complemented what Clinton in a 1989 address called the government’s responsibility to ensure “equal opportunity, not equal outcomes.”

HOPE was not the nation’s first scholarship based solely on merit, yet it represented the first broad-based, state-run merit scholarship program. Because most Georgia families were eligible for HOPE — the median household income in Georgia in 1991 was $27,212 — Miller framed it as a magic bullet for the middle-class. In a state with a large population of anti-gambling evangelical voters, Miller sought to pass the referendum by appealing to taxpayers’ wallets, giving them a direct financial incentive to vote for a lottery.

Ultimately, the referendum passed by a narrow margin thanks to support from African American voters in Atlanta as well as slight majorities in the state’s suburbs. In its first year (1993-1994), HOPE sponsored $19 million worth of scholarships for more than 55,000 students.

Yet approximately 80 to 85 percent of HOPE scholars were already planning on going to college before receiving the scholarship. The popularity of HOPE among Georgia’s suburban families led to the infamous phenomenon of the “HOPE Mobile,” as parents used money previously set aside for tuition to purchase cars for children who took advantage of the scholarship. One study found the practice so common that HOPE was directly responsible for rising car sales in the richest 25 percent of Georgia counties in 1994 and 1995.

Nonetheless, in 1994, when high lottery sales allowed Miller to expand the scholarship, he applied HOPE to all four years of college and — crucially — increased the income cap to $100,000, which expanded eligibility to include 95 percent of Georgia households. The following year, the governor removed the income ceiling altogether, thus allowing any Georgia high schooler, no matter how wealthy, to receive free tuition at an in-state university provided they met the high school and college GPA requirements.

The scholarship’s focus on merit meant that Georgia’s poorest students — particularly those who did not qualify for HOPE — had few options for tuition assistance. HOPE catapulted Georgia from 21st to seventh in the nation in proportion of students who received state grants, and, by 2003, the state led the nation in aid per undergraduate student. Yet, Georgia provided just $7 in need-based aid per student, third-to-last in the nation. Just 0.3 percent of all financial aid in Georgia was distributed solely on need rather than merit or a combination of the two.

The lack of need-based college aid is particularly ironic, given that the Georgia Lottery attracts gamblers who are disproportionately poor, nonwhite and uneducated, and uses their money to pay for the college education of the state’s richest residents.

Despite — or perhaps because of — the inequity inherent in HOPE, Georgia offered a model for the proliferation of merit scholarships at the state and federal levels. In 1996, Clinton as president launched the Hope Scholarship, a tuition tax credit aimed at making the first two years of college as universal as high school.

Meanwhile, Georgia inspired the spread of lotteries throughout the Bible Belt, and states tied gambling revenue to merit scholarships, some of which even bore the name “HOPE.” Some states — Florida among them — stopped using lottery funding for their general education budgets and siphoned revenue to merit scholarships instead. As of 2011, eight states used lottery-funded merit scholarships and 14 states, mostly in the South, offered large scale, merit-based scholarship programs.

Miller may be best remembered for his later drift toward the GOP, but HOPE represents the most important aspect of his legacy. The politics of his signature scholarship help explain his shifting political allegiances. Like other conservative Democrats, Miller was uncomfortable with using government as a tool to specifically help the poor. His vision of liberalism was rooted in meritocratic competition that offered help to the poor by allowing them to compete for government assistance, and, ironically, he left the Democratic Party not long after it adopted his and Bill Clinton’s economic centrism.

As popular as they are with voters, programs such as HOPE illustrate the damaging consequences of policies oriented toward rhetorical allegiance to “opportunity.” Undoubtedly, the scholarship has provided crucial assistance for countless students in their pursuit of higher education. But if states are going to help students pay for college, they should make an active effort to ensure that those students actually need the aid they receive.

Merit-based education programs provide an inherent advantage to students from better schools and with access to better resources who can more easily meet the 3.0 GPA requirement. If government wants to prioritize scholarships for such students, these programs should not be contingent on poor gamblers losing money.

So, too, while many middle-class voters oppose welfare, they ignore the financial benefits — such as HOPE — that they receive from the government. In Georgia, upper- and middle-class families have long taken advantage of a scholarship designed to win their votes in a referendum decades in the past. Miller did not invent the merit scholarship, nor did he invent the idea of lotteries as a method of public finance. But by tying gambling revenue to merit scholarships, he enabled the doubly regressive nature of the Georgia Lottery and deepened the inequity of the American educational system.