Special Report

Blade Runner

Indiana Gov. Mitch Daniels is one Republican who will win reelection tomorrow.

By 11.3.08

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Given his previous stint as George W. Bush' first budget director and ties to John McCain's blundering presidential campaign, Mitch Daniels shouldn't be winning a second term as Indiana's governor. After all, several polls -- including that conducted late last month by SurveyUSA -- shows that the Republican presidential nominee may be the first to lose the Hoosier State's electoral votes since Barry Goldwater's landslide loss to Lyndon Johnson five decades ago.

Daniels' occasionally Spitzer-esque pugnacity and his notoriously sharp tongue often ticks off the many Hoosiers who generally prefer their vicious partisanship to be veiled in rumor-mongering and outward gentility. Newspapers such as the Fort Wayne Journal-Gazette gave him the business early on in his tenure after he proclaimed that Democratic legislators "car-bombed" a series of his proposals. Lingering resentment over his successful effort to place the state on Daylight Saving Time should also make him a one-term wonder. 

Yet Daniels is one Republican who will win reelection this year. And not by a squeaker. So far, he leads his Democrat opponent, former congresswoman Jill Long Thompson, by as much as 31 percentage points, according to a poll conducted last month by political columnist Brian Howey, and Gauge Market Research, an Indianapolis pollster.

Thompson's lackluster campaign, along with disarray among state Democratic Party leaders -- who all but abandoned Thompson after she beat out their favorite for the nomination six months ago -- has aided Daniels' re-election. So has the tendency among voters to let all governors serve two consecutive terms. But Daniels has also earned respect (if not admiration) from many Hoosiers for effectively managing state government, keeping a tight lid on spending, and challenging the insular political and social culture from which he began his career.

As fellow Republicans such as Senate Republican leader Mitch McConnell and California's Arnold Schwarzenegger pay dearly for abandoning small government principles, this most unlikely of politicians could compete for the party's vice presidential nod four years from now, if not for the presidency itself.


A PRINCETON, HARVARD, AND GEORGETOWN law grad, Daniels parlayed his father's ties to the political machine of Sen. Richard Lugar into behind-the-scenes stints with the Republican Senatorial Campaign Committee, the Reagan Administration, and the Hudson Institute. During his tenure in the Bush Administration, Daniels earned two monikers -- "The Blade" and "Mitch the Knife" -- and the ire of pork-loving congressional leaders for his aggressive spending cut proposals and efficiency efforts such as the Program Assessment Rating Tool.

After winning the Indiana governorship -- and ending a 16-year string of Democratic control -- Daniels lived up to both his nickname and his reputation as he looked to cut an $800 million structural budget deficit and cut back a bloated state government of 74 agencies and 319 different boards. On his first day in office in 2005, he cribbed from Ronald Reagan's playbook by rescinding collective bargaining agreements with government employee unions. He then passed a two-year budget that cut back spending, implemented a plan to base employee raises on performance improvements, and allowed him to be more aggressive in improving government efficiency than he could ever do during his White House service.

An overhaul of the state's notoriously inefficient Bureau of Motor Vehicles later that year, which included shutting down 27 of its branches, angered legislators, who have long-used the agency as a patronage tool. They raised even more flack after Daniels began a wave of privatizations, including handing off prison cafeteria services to food services giant Aramark, contracting Medicaid operations with firms such as technology consulting giant IBM, and leasing the newly built New Castle state prison -- which the state couldn't afford to operate despite spending $135 million to build -- to the Corrections Corporation of America.

Then in 2006, Daniels struck a deal to lease the Indiana East-West Toll Road for $3.8 billion to Macquarie-Cintra, an Australian-Spanish consortium. This enraged Democrats, citizens who lived along the highway in Northern Indiana, and even some Republicans, who accused him of placing a precious state asset into foreign hands. Legislators approved it by a narrow margin. A year later, they rejected his plans to privatize the state lottery and contract with private firms to build and operate another state highway.

Despite facing re-election this year, Daniels couldn't keep himself from riling another faction of the state's political establishment. As part of a property tax reform plan, he proposed to eliminate the state's 1,008 townships, whose officials control the patronage that fuels statewide politics. Although Daniels didn't win that battle, he eventually succeeded in eliminating 964 township tax assessors; on Tuesday, voters in five counties will decide whether to eliminate 44 other such positions.


ANGERING FELLOW POLITICIANS and citizens usually isn't a formula for political success. But a stop at a motor vehicles license office in the tony Indianapolis neighborhood of Nora offers one reason why Daniels is all but assured of winning re-election.

Four years ago, the average visitor could expect as much as an hour-long wait to simply renew a license or take a written driver exam. These days, a customer will zip in and out of the office; others can get vehicles titled at their auto dealership and renew auto registrations at a discounted price. Average wait times at a typical motor vehicle branch declined from 28 minutes in 2006 to nine minutes this year.

Even as states such as Nevada and New York face billion-dollar budget deficits, Indiana remains in the black. The current two-year budget still runs a $192 million surplus, according to data from the state's budget agency. The state has repaid nearly all of the $700 million in subsidy payments to local governments and universities it had delayed during the recession earlier this decade. An effort by Daniels to clamp down on the state's penchant for lavish public school construction spending is resulting in some $127 million in savings thus far.

Even the lease of the Indiana Toll Road -- still reviled in some quarters -- is being applauded by residents in many communities. The proceeds are paying for long-promised (and oft-delayed) highway and road projects that would improve traffic in those areas; the hand-off also got $226 million in delayed maintenance -- for which taxpayers would have had to pay -- off the state's books.

This isn't to say that Daniels has completely adhered to Republican principles. Among his less-stellar efforts: Taxpayers in Indianapolis and six nearby counties will foot $2 billion in construction and debt costs for the expansion of a convention center and the building of Lucas Oil Stadium on behalf of the NFL's Indianapolis Colts. As part of the property tax reform, he approved a 1-percent sales tax increase, which will be used to pick up local school costs.

But for the most part, Daniels has stuck to small government principles of fiscal frugality and stellar management of the most necessary activities that even all but the most left-leaning Democrat can embrace. This should serve as a lesson for all politicians --especially congressional Republicans and President Bush, whose abandonment of those precepts has resulted in a string of Election Day defeats.

Meanwhile, Daniels' efforts aren't just paying off for taxpayers. Earlier this year, Daniels' name was bandied about as a possible Republican vice presidential nominee before the selection of Alaska Gov. Sarah Palin for that spot. Four years from now, he could join the seven other Hoosiers -- including Dan Quayle -- to have been nominated or elected to the job. And, though unlikely, depending on how the GOP housecleaning goes, the former presidential adviser may end up heading up the presidential ticket himself.

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About the Author

RiShawn Biddle the editor of Dropout Nation , is co-author of A Byte at the Apple: Rethinking Education Data for the Post-NCLB EraHe can be followed at Twitter.com/dropoutnation.