12 in 2012: Fiscal Conservatives Eye Daniels' Dexterity in Managing Indiana Budget

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Fox News:

Some fiscal conservatives are looking to pave the road to the White House from Indiana, where Gov. Mitch Daniels has done what others before him have proven unable -- chopped a deficit-plagued budget and forced the state to live within its means.

The skill has earned the two-term governor a reputation that could attract voters nationwide in 2012, many of whom say -- according to exit polls in Tuesday's election -- that runaway government spending is their top concern.

Elected in 2005 after coming off a stint as President George W. Bush's budget chief, Daniels inherited a state budget that hadn't been balanced in eight years. On his first day in office, he took drastic action -- selling the state's largest toll road and decertifying government employee unions -- and within a year, the Hoosier State books were even.

"We are paying all our bills. We do have money still in reserve. We did it without raising taxes," he told Fox News' Bret Baier in an interview.

Daniels' first year in office was tumultuous for another reason -- he proposed a 1 percent surtax on people earning more than $100,000. The idea, widely rejected, pushed his approval rating down to 33 percent.

But it didn't stay there.

In 2008, President Obama carried Indiana -- and so did Daniels, winning reelection by 18 points and now governing with a 65 percent approval rating.



Daniels calls the debt a national security issue, and says he wants to work on relations with China

“I do believe at this point in our history, the gravest security threats to us will come in a rush if we go broke. We are borrowing now more than the -- far more than the entire defense budget,” He said. .

Daniels’ experience as Bush’s director of the Office of Management and Budget may help or hurt his chance in 2012.

When Daniels entered with the president, the nation had a $236 billion surplus. When he left, the country had a $400 billion deficit.

Daniels argues that he didn’t pass the budget, and doesn’t have a say over how appropriators spend. He also notes that $400 billion would be an improvement over today’s figures. He adds that Social Security and Medicare spending can’t go unchecked.

“We're headed for a really interesting historical moment. Those who are against change in these programs -- are the enemy of Social Security. They're the enemy of Medicare. The rescuers are those who are prepared to make big changes so we have something that'll still work in 10 years or 20,” he said.