Indiana Governor Daniels Successfully Leads in Tough Times

Continuing in his rise to the top of a new group of Republican leaders with innovative and successful ideas, Indiana Governor Mitch Daniels is one to watch. The GOP would do well to encourage Daniels to run for higher office.

After the state was governed by three consecutive Democratic governors, Evan Bayh, Frank O'Bannon, and Joe Kernan, Daniels has the state back on track. Nearly bankrupt as Daniels took office in January, 2005, Indiana is in far better shape than most states in today's slow economy. In his recent article in The Wall Street Journal, Daniels points to reforms in state procurement, contracting out jobs, cutting costs, and scrutiny of expenditures by demanding annual improvement in all departments. He also reduced state employees to the tune of 5,000 from the level state employee numbers were in 2004.

Daniels warns that state governments are in for some hard times. After the federal money from the stimulus package is spent, states will likely be right back in the same spot two years from now. "The Obama administration's "stimulus" package in effect shared the use of Uncle Sam's printing press for two years. But after the money runs out, the states will be back where they were. Even if Congress goes for a second round of stimulus funding, driven by the political panic of bankrupt Democratic governors, it would only postpone the reckoning."

"The "progressive" states that built their enormous public burdens by soaking the wealthy will hit the wall first and hardest. California, which extracts more than half its income taxes from a fraction of 1% of its citizens, is extreme but hardly alone in its over reliance on a few, highly mobile taxpayers. Both individuals and businesses are fleeing soak-the-rich states already. Those who remain in high-tax states will be making few if any capital gains tax payments in the years to come. Even if the stock market comes roaring back to life, the best it could do is speed the deduction of recent losses."

Indiana welcomes business investors in a business-friendly environment. "Since January we have welcomed the consolidation of more than 30 firms that closed up shop elsewhere and chose us as the low-cost, enterprise-friendly environment among their current locations."

Daniels left public service in Washington, D.C. - having served as the Director of the Office of Management and Budget for President George W. Bush - to return to Indiana and ran for the office for governor.