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Right Turn
Posted at 08:30 AM ET, 09/26/2011

Daniels warns America: Save our republic

In a conference room at the Heritage Foundation on Friday afternoon, Indiana Gov. Mitch Daniels (R) spoke to a small group of online journalists. I’ve been in two previous settings with him before he announced he would not run for president. He was, to the degree a straightlaced, immaculately dressed pol with a penchant for budgets can be, more relaxed and at ease than I’ve seen him. He was talking about his passion — warning Americans that we are in fiscal peril and helping to chart a course that will preserve the American experiment in democracy.

Daniels is out with a new book: Keeping the Republic (a reference to Benjamin Franklin’s answer when leaving the Constitutional Convention to what kind of government we would have — “A republic, if you can keep it”). It is not a light read The better part of the book is spent spelling out the extent of our fiscal problems and the responsibility of both parties for our worsening condition, which threatens our standing as a superpower and even the idea of self-government.

Daniels told us on Friday, “The book is not a polemic and not a tome about the debt.” He said he is trying to ask “the big questions.” What kind of society do we want to have? What do we want government to do? And how big should government be?

It’s clear he is dismayed by the lack of political leadership by both sides. I asked whether it is possible for presidential candidates in a heated primary to lay out specifics. He answered, “That’s my preference. You can’t start soon enough. These are big problems.” He is particularly concerned that his Republican Party not duck the hard issues in the 2012 campaign. “It is increasingly likely the president will be in desperate political shape. I could see where our nominee would play it safe.” That, he said, would be a terrible error, “if you accept the premise we’re in a real jam.” He told us it would be a waste “just to win without trying to rally America.”

He’s not shy about laying out his recommendations. On Social Security, he said, “The place to start is means testing.” He doesn’t mention privatization in his book because, he explained, “we have to start with things that will start taking zeroes off” our debt. He said that requires means testing, readjusting indexing and adjusting the age requirement for those who are not currently receiving benefits or are near retirement age. He wouldn’t recommend privatization plans now, in large part, because in this economic environment that would be “less saleable, less certain.” He hopes that with his three suggested measures you would see more voluntary savings by individuals.

He understands those who doubt the public is willing to swallow bitter medicine. He acknowledged, “There is an element of faith. . . . Given the circumstances we ought to assume the best of our fellow citizens.” He does see progress in the idea brought forth by the Simpson-Bowles commission, the national conversation about the debt and the rise of the Tea Party.

He suggested that a true debt crisis of the type we see in Europe could hit the United States much sooner than politicians have suggested. In fact, it could happen any time, given our downgraded credit and the potential for recession in the E.U. and China.

His book, in addition to Social Security changes, recommends Medicare “2.0.” That would look like a defined contribution plan — “a set amount” will await those up to a certain income limit and individuals would look for their own private insurance. His other ideas include tax reform (low rates, very few deductions), a reduction in the federal workforce, conversion of benefits for the poor including Medicaid into a negative income tax, domestic energy development and pro-growth policies.

Conservative hawks will rankle at his approach to defense. He insists our budget woes require “reassessment of the myriad worldwide tasks we have assigned our forces.” This sounds rather like Jon Huntsman, who insists we can’t afford to fight all our enemies. (And of course, it ignores the fact that even massive cuts in defense would not be a drop in the bucket compared with the oceans of debt created by entitlement programs.) However, in his interview Daniels stressed that he is only asking for defense to be considered and emphasized his admiration for armed services and intelligence agencies that have protected us from another terrorist attack.

In any event, Daniels is not running for commander in chief. He is providing a much-needed push to politicians and the public to take seriously our perilous economic situation and to think boldly. Right now that message is carried in the Congress by Rep. Paul Ryan (R-Wis.). But who will lead from the White House?

By  |  08:30 AM ET, 09/26/2011

Categories:  Budget, Economy

 
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