The American Spectator

p> STAYING PUT br> Earlier this year, White House senior staff were predicting that Office of Management and Budget director Mitch Daniels would be one of the first Bush Administration staffers to high tail it out of town. That was in part due to the fact that his family remains based in home state Indiana (Daniels visits weekly), and because Daniels has been touted as a 2004 gubernatorial candidate there. /p>

But lately Daniels has been telling friends and political backers in the Hoosier state that they might have to look elsewhere for a candidate. “With the economy and the budget mess this year, it’s looking like he may have to commit to the Bush team longer than he might have expected,” says a White House staffer. “The president and Rove probably thought that Daniels would be free to run for elective office by now, but things haven’t worked out that way.”

Increasingly, Daniels is being counted on to be a voice of calm on the economic front now that Treasury Secretary Paul O’Neill’s public persona isn’t playing well on Wall Street or Main Street, U.S.A. Daniels has impressed the White House and Republicans on Capitol Hill with his handling of the budget and appropriations debates. “The problems the White House is having on budget and appropriations isn’t Mitch’s fault,” says a GOP Senator. “The problems are up here on Capitol Hill and in White House legislative affairs.”

While Daniels may not be on the hook for the appropriations debacle — federal spending and Congressional appropriations requests are shattering records and putting taxpayers into an ever deeper hole — White House insiders agree that the OMB guru has to find a way to package a message on the spend-a-holic Congress, particularly on the Homeland Security front.

“Mitch has said the president won’t stand for bloated budgets there, and he has to make sure the president is held to that pledge,” says the senator. “I can just see a situation where the president might sign a flawed Homeland Security appropriations bill for the sake of signing the bill, but that would be the wrong way to go.”

p> CODE BLUE br> North Carolina Democratic Senate primary loser Dan Blue continues to mull whether or not he will support his party’s nominee, former White House Chief of Staff