Mitch Daniels on Keeping the Republic

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Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Indiana Governor Mitch Daniels talks about national politics and his new book, Keeping the Republic: Saving America by Trusting Americans.

While many voters in the country thought Mitch Daniels might be the next president of the United States, Daniels decided against the campaign trail and in favor of book tour instead. His new book, Keeping the Republic: Saving America by Trusting Americans, is making waves—not least for its use of the phrase “Ponzi scheme” to describe Social Security.

Daniels has said that the debate between front-runners Mitt Romney and Rick Perry over Perry’s use of that same phrase in describing the same program is unproductive. The one-time possible candidate now says he would support a new candidate if one came along who would back his or her policies with math rather than with rhetoric. 

As governor of Indiana, Daniels has been a leader himself, of course, and is credited with closing a big state deficit, going after public employee bargaining rights before Scott Walker, and capping property taxes at 1-3% total property tax. Daniels has been cited by New Jersey governor Chris Christie as a model leader.

To round out that political resume, Daniels also has served as chief political adviser to President Ronald Reagan and budget director under George W. Bush. While Daniels has declined to pursue the presidency in 2012, he has not ruled out the possibility of serving as vice president. 

Daniels said of his property tax cap that a one percent tax is written into the state’s constitution as upper limit of a homeowner’s tax obligation “so that’s not subject to the state reneging later.” He said it is the lowest cap in the country, and was important to his administration to protect homeowners and attract new businesses.

Public schools in Indiana are funded mostly through state taxes. Indiana devotes just over half of its budget to K-12 education, Daniels said, more than any other state in the country. 

As elsewhere in America, what ever the problems are in public schools, it’s not inadequate funding.

While Indiana has increased that funding since, with more increases planned for the future, overall property taxes have become a secondary source of revenue for schools, used mainly for capital projects. 

Indiana’s model for funding schools might serve as a more equitable model, with more even funding across school districts,instead of the property tax model where wealthier neighborhoods can pay more for schools. Daniels said the Indiana model provides higher funding for districts teaching “at-risk kids or disadvantaged populations.” Yet he was hesitant to recommend that other regions follow Indiana’s lead. 

I’m always bashful about promoting any of the changes that we made to other states, it’s best for each state to promote its own interests, but I will say on the equity, it’s certainly a more straight-forward way, I think a more effective way.

Daniels said the use of the same language around Social Security doesn’t indicate that the two politicians are exactly aligned, but possible something more quotidian.

It means we’re pretty darn unoriginal.

In fact, that phrase has been used as an attack on social security for decades before either his remark or Perry’s. Daniels did allow that there is a difference between a Ponzi scheme and Social Security. 

One reason it’s not really a Ponzi scheme is it’s mandatory. You’re not forced to take part in a Ponzi scheme, but of course in Social Security you are.

Though he defends the general proposition that Social Security is a pay-as-you-go proposition, Daniels said the comparison has been overused.

If there’s a problem with what Governor Perry said, it’s not that it’s not true, it’s that it’s trite.

He said he feels it is very important for anyone speaking about overhauling Social Security to be very clear that those who are depending on it will not be cut off from resources.

We need to say… A deal’s a deal…Nothing will change for you, please rest assured, but now will you help us try to craft new modified systems for the generations that are paying for your retirement so that they can have some peace of mind and some backstop too?

Daniels said the way to lower the amount of outflow from the funds is by cutting payments to the wealthiest Americans, lowering the index for inflation, and raising the retirement age. Regarding manual laborers, who might really be worn out at age seventy from working, Daniels expressed confidence that the future would hold fewer of those jobs.

The world we’re in, let alone the one we’re discussing now of ten and twenty and thirty years from now is going to be so completely different, I don’t know. People will have multiple careers. People better be prepared for careers other than construction or heavy labor, which are already.. such a small percentage of the jobs we have today. I don’t think that’s going to be a stopper.

He stressed that he is open to other ideas, but he feels it urgent that some action be taken.

Daniels disagrees with the idea that the Bush administration created the current fiscal crisis by putting costs for the wars off the books while cutting taxes to the wealthiest. He said the cuts caused only a tiny fraction of the debt, and instead points to spending by the current administration.

This is the deadest horse in the corral, but people keep trying to ride it.

Daniels said he might endorse in the current Republican primaries and will certainly support the nominee, but right now he’s focusing on promoting his ideas and policies. He does hope that any winning candidate will work on uniting, rather than dividing, the country politically and will take time to explain to the American public the theories behind the policies.

What you’d like to do is win the next election with a large consensus of Americans ready to make big change.