Keeping the Republic, Mitch Daniels, Sentinel (2011)
From this book, Mitch Daniels is more interested in finding solutions that will work than conceptual purity. If the best solution is not politically feasible, he will settle for #2 or #3 instead of waiting for a more opportune moment that might never come. If he tries something and it fails, he will say “oops,” pull the plug, and try something else. And he disarmingly characterizes some of his ideas as common sense, notably how to balance the budget.
Halfway through my second term [as governor of Indiana], a reporter asked me how we had turned things around. “Prepare to be dazzled,” I said. “We spent less money that we took in.”
At the national level, Daniels was a staffer in the Reagan Administration and a Budget Director for Bush 43. He references key learnings in these assignments, including the speed with which the then projected surpluses evaporated. I appreciated the admission that some of the tax cuts in which Daniels participated helped to bring about the current situation in which 50% of Americans pay essentially no income tax.
In 2004, Daniels ran for governor of Indiana and eked out a victory. The state had deep fiscal problems. Many steps were taken, such as: outsourced prison meals to catering services, speeded review of environmental permits (some of which had been pending for years), radically reduced wait times at the department of motor vehicles, raised billions for state roads by leasing the Indiana Turnpike to a private operator, cut local property taxes, abolished government union agreements that had made it virtually impossible to reorganize operations, and permitted parents to send their children to schools in any district. There was ample opposition, but the reforms worked and voters reelected Daniels by a wide margin in 2008. When the recession hit, AAA-rated Indiana rode out the downturn very comfortably while most states were struggling.
At the national level, as Daniels sees it, the key challenges are: (1) Balance the federal budget – and forget ideology, because the need to tame the “Red Menace” is a matter of arithmetic. (2) Support rather than block economic growth, because without growth it will be tough to balance the budget or accomplish much of anything else. (3) Reconcile the regulatory mindset and environmental purity with the practical realities of a robust economy.
We have lost the luxury of being able to saddle our economy with a million Lilliputian restrictions, delays, and mandates. The giant has fallen, and he will not struggle back to his feet if we continue to burden him as we do today.
In terms of solutions, his most telling point is that the public needs to demand a change in attitude. From a government that wants to be in charge of everything to a government that is trying to help people succeed. From “yes, we can” to “yes, you can.” From, “change you can believe in” to “change that believes in you.” Otherwise, elitist government officials will be all too happy to treat people like children and make their decisions for them – effectively ending the American experiment in self government.
As for specific policy changes, the idea of deliberalizing Medicare benefits by means testing, raising the retirement age, etc. seems rather pedestrian. While a value added tax might raise more revenue, and a “negative income tax” could replace more targeted benefits (food stamps, earned income tax credit, low income housing subsidies, etc), such measures would confirm rather then rein in the burgeoning welfare state of which Daniels complains. Empowering the president to impound unspent funds (as Daniels was able to do in Indiana) might involve some pluses, but given the history with Nixon it might not be an easy sell.