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Mitch Daniels on Budget & Economy

Republican IN Governor


Desperately alarmed about national spending

I am desperately alarmed about the condition and direction of the American republic. What recently seemed a secure, ever more prosperous, internationally dominant nation is now endangered in a way it never has been before. As a people, we have discovered the ability to vote ourselves largesse from the federal treasury in such vast sums that we are destroying our own chances at prosperity.

The level of government spending we are engaging in may soon leave us with a defunct, bankrupt, destitute economy. If we don't find a way to restore the goose to good health, we will soon run out of golden eggs.

The risk is even higher than lost jobs, income, or hope for a better future and higher living standards. Our position of world leadership could be eclipsed and with it the power of our free political system as a model for other countries. It's not out of the question that the American republic could undergo a full economic and social collapse, with consequences beyond our ability to imagine.

Source: Keeping the Republic, by Mitch Daniels, p. 3&19 , Sep 20, 2011

Spend less money than you take in

Halfway through my second term [as Indiana governor], a reporter asked me how we had turned things around. "Prepare to be dazzled," I said, "We spent less money than we took in." Total state spending had been held almost flat, growing at about 1% per yea for 6 years, 1/3 the rate of inflation, while revenue caught up & surpassed it."

One tool that I had at my disposal was the power not to spend money budgeted by the General Assembly. On the federal level, this tool is called the power of "impoundment" or "rescission." It is a powerful tool because it enables the chief executive to react to changing budget circumstances and stop agencies from spending money the government doesn't have. Unfortunately, Congress effectively stripped the president of this power along with others, in the post-Watergate period. I appreciated the power to save unspent funds--which in Indiana is called the power of "reversion"--because it not only made budgetary sense, but also changed the politics of government spending.

Source: Keeping the Republic, by Mitch Daniels, p.107-109 , Sep 20, 2011

Downsize federal employment: freeze hiring & freeze pay

Major reductions in federal spending are likely to cause far less discomfort to the general public than is commonly claimed. Every newspaper story about even the most modest cut includes the word PAIN. That is usually nonsense. If massive government spending prevented pain, we wouldn't have had so much of it in the past few years. Today's grossly oversized and overly expensive federal government is itself a major source of pain in America, through the jobs and opportunity it stifles. Left in its present shape, it promises to bring far worse pain than anything we have recently endured.

An obvious starting point is a major downsizing of federal employment. This should be accompanied by a hiring freeze, which should last for years. Reductions in head count should be coupled with a federal pay cut, followed by a long-term pay freeze. This is only secondarily a matter of debt reduction; it is even more about reasserting the principle that the private sector comes first.

Source: Keeping the Republic, by Mitch Daniels, p.209 , Sep 20, 2011

Reinstate impoundment: spend less than appropriated

When a pro-solvency Congress and president are elected, they would be well advised to reinstate the power of impoundment, to spend less money than Congress has made available through appropriations. Stop and think: In what other context in life does an enterprise lock itself into spending money it does not have?

In the hands of an administration willing to use it aggressively, some version of impoundment authority would produce billions in savings immediately. Impoundment ought to be part of an urgen strategy to bring the beast back to a size the nation can afford.

Impoundment can be limited--for example, by providing opportunity for a prompt congressional disapproval vote before each reduction took effect. Or the authority could be granted on an emergency basis; our current debt condition certainly qualifies as one. But the degree of surgery required to bring the federal budget back within even hailing distance of balance more than justifies the use of this tool.

Source: Keeping the Republic, by Mitch Daniels, p.212 , Sep 20, 2011

Our "raisin' debt": survival-level threat of red ink

In our nation, in our time, the friends of freedom have an assignment, as great as those of the 1860s, or the 1940s, or the long twilight of the Cold War. As in those days, the American project is menaced by a survival-level threat. We face an enemy, lethal to liberty, and even more implacable than those America has defeated before.

I refer, of course, to the debts our nation has amassed for itself over decades of indulgence. It is the new Red Menace, this time consisting of ink. No enterprise, small or large, public or private, can remain self-governing, let alone successful, so deeply in hock to others as we are about to be.

If a foreign power advanced an army to the border of our land, everyone in this room would drop everything and look for a way to help. That is what those of us here, and every possible ally we can persuade to join us, are now called to do. It is our generational assignment. It is the mission of our era. Forgive the pun when I call it our "raisin' debt."

Source: 2011 Conservative Political Action Conf. Keynote , Feb 10, 2011

Automatic taxpayer refund when reserves exceed 10%

I ask you to vote for lasting spending discipline by enacting an automatic taxpayer refund. When the day comes again when state reserves exceed 10% of annual needs, it will be time to stop collecting taxes and leave them with the people they belong to. Remember what the Hoosier philosopher said: "It's tainted money. 'Taint yours, and 'taint mine." Beyond some point, it is far better to leave dollars in the pockets of those who earned them than to let them burn a hole in the pockets of government.
Source: 2011 Indiana State of the State Address , Jan 11, 2011

Growth-friendly tax cuts reverse Indiana’s economic decline

The top priority for Governor Mitch Daniels is to begin to reverse Indiana’s economic decline, because future success in every other area depends upon it. During Governor Daniels first year in office, Indiana became a much more growth-friendly place. Taxes on research and development and small business were reduced. The Daniels Administration reordered state government to become an ally and not an obstacle to growth. And, a new public-private job-seeking agency replaced a failed state bureaucracy.
Source: Gubernatorial website, www.in.gov/gov, “Issues” , Nov 11, 2006

Other governors on Budget & Economy: Mitch Daniels on other issues:
IN Gubernatorial:
Mike Pence
IN Senatorial:
Daniel Coats
Joe Donnelly

Newly elected Nov. 2012:
IN: Mike Pence (R)
NC: Pat McCrory (R)
NH: Maggie Hassan (D)
MT: Steve Bullock (D)
WA: Jay Inslee (D)

Re-elected 2012:
DE: Jack Markell (D)
MO: Jay Nixon (D)
ND: Jack Dalrymple (R)
UT: Gary Herbert (R)
VT: Peter Shumlin (D)
WI: Scott Walker (R)
WV: Earl Ray Tomblin (D)

Up for re-election 2013:
NJ: Chris Christie
VA: Bob McDonnell
Up for re-election 2014:
AK: Sean Parnell
AL: Robert Bentley
AR: Mike Beebe
AZ: Jan Brewer
CA: Jerry Brown
CO: John Hickenlooper
CT: Dan Malloy
FL: Rick Scott
GA: Nathan Deal
HI: Neil Abercrombie
IA: Terry Branstad
ID: Butch Otter
IL: Pat Quinn
KS: Sam Brownback
MA: Deval Patrick
MD: Martin O'Malley
ME: Paul LePage
MI: Rick Snyder
MN: Mark Dayton
NH: Maggie Hassan
NM: Susana Martinez
NV: Brian Sandoval
NY: Andrew Cuomo
OH: John Kasich
OK: Mary Fallin
OR: John Kitzhaber
PA: Tom Corbett
RI: Linc Chafee
SC: Nikki Haley
SD: Dennis Daugaard
TN: Bill Haslam
TX: Rick Perry
VT: Peter Shumlin
WI: Scott Walker
WY: Matt Mead
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Page last updated: Apr 25, 2013