Steven Hayward fails to refute my case against Mitch Daniels


I am the author of the “Case against Mitch Daniels”, which Steven Hayward dismisses here. His article is ludicrous and suggests that he hasn’t even read the Case, but has rather only skimmed it.

Firstly, my article does NOT begin with an invocation of the ranking of states by CNBC. Rather, it begins with a reminder that Daniels is being billed as a fiscal conservative who can rescue America from its fiscal problems. The evaluation of his record as Governor begins with a FACT which Stephen Hayward conveniently omitted: the fact that Daniels, contrary to the popular myth, has failed to balance the state budget and that the state now has a $1.4 bn budget deficit projected for FY2011 (the current FY).

Mr Hayward then defended Daniels’ lousy record as OMB Director, claiming that he isn’t responsible for the record deficits of the Bush era. Granted, the Congress did make matters worse (as it usually does), but this doesn’t change the fact that the NCLB law and the prescription drug benefit were both key planks of Bush’s electoral platform and they were Bush’s ideas. Daniels joined the Bush Administration as OMB Director in 2001 knowing this, and he voluntarily enacted (and budgeted for) these policies once they were approved by the Congress. Daniels was under no obligation (other than Bush’s orders) to enact them. But he did.

Mr Hayward invoked 9/11 and the 2001 recession in Daniels’ defense. But he’s wrong. The fiscal costs of 9/11 to the federal government, and shrinking revenue as a result of the recession (which ended in Nov. 2001 and was a shallow recession) were not large enough to explain a swing from a large budget surplus at the beginning of FY2001 to a budget deficit at the end of that FY.

What Mr Hayward also conveniently omitted was that Daniels remained the OMB’s Director until 2003 and was responsible for federal budgets for FY2002-FY2004. Each of them had a bigger budget deficit than the previous one; the FY2004 deficit was the largest in post-WW2 history until FY2009. It was Daniels’ succcessors who reduced budget deficits.

The key argument that brilliantly debunks Mr Hayward’s ridiculous claims is that during the Bush era, Daniels himself said that “[eliminating] the budget deficit was not the highest priority.”

Finally, regarding Daniels’ unacceptable calls for defense cuts: the AT did not rebuke them superficially. What I wrote in my AT article is the truth, and everyone can verify it on the Internet. Defense cuts would weaken the military, and they would not save more than a pittance (you could abolish the DOD entirely and there would’ve still been a $1 trillion budget deficit every FY) – and only in the short term, because in the long term, defense cuts would embolden America’s adversaries, encouraging them to engage in coercion or even war. Then, the US would have to either rearm and fight a new war it didn’t want – at a high fiscal and human cost – or do nothing and tolerate the resulting costs.

By the by, while making calls for defense cuts, Daniels has revealed his utter ignorance about America’s defense spending, asking if the defense budget was $800 bn per year. No, Governor, it isn’t. The FY2011 military budget, including GWOT costs, is $685 bn.

Mr Hayward likes to invoke the CATO Institute in defense of Mitch Daniels, but again conveniently omitted the fact that just a few weeks ago, on the NRO’s pages, CATO Institute analyst Michael Cannon exposed Daniels as a Big Government liberal, explaining in brief the rules of the road under which Daniels’ socialized medicine scheme, the Healthy Indiana Plan, operates. It provides government coverage (i.e. a public option) to people up to 200% of the federal poverty level (Obama’s scheme covers people only up to 138% of the federal poverty level), dependents up to the age of 24 (Obama’s – 26), and has enrolled additional 62,000 Hoosiers in the Medicaid program at the same time that this entitlement program (like its cousins) is going broke. In other words, Daniels has made an additional 62,000 people dependent on the state government. Moreover, he has financed this Big Government scheme with a huge hike of cigarette taxes (just like Obama at the federal level). So Daniels believes he is authorized to tell people whether or not they are allowed to smoke, and to tax them heavily if they don’t live a lifestyle he considers healthy. That’s a classical nanny-state belief.

By the by, the biggest problem with Mitch Daniels is not any one of his single, particular policies. The problem is his liberal nanny-state philosophy.

And Daniels’s HIP will make it impossible to honestly argue for repealing Obama’s scheme should he run for the Presidency. Obama has already admitted that he plans to spend $1 bn on ads reminding the American people about the big government schemes instituted by some Republican Governors he considers potential presidential rivals. Obama’s socialized medicine scheme is Obama’s Achilles Heel, a key issue that can cost Obama the Presidency. Only Republicans can remove that issue from the table – by nominating Mitch Daniels (or Mitt Romney). (By the by, as Governor, Daniels has begun implementing Obama’s scheme in Indiana, ignoring the rulings of 2 different federal judges rendering that scheme unconstitutional and thus null.)

Daniels’s plan is not identical to Obama’s or Romney’s, as Cannon himself acknowledged, but it is undeniably a huge step towards socialized medicine.

The key question that Mr Hayward and others should answer is: how can Daniels credibly argue against Obama’s huge budget deficits, bloated federal budgets, statist government programs, socialized medicine scheme, and policies causing high gasoline prices, when he has implemented or endorsed similar policies? The answer is he can’t, and if he’s nominated, Obama will have unlimited financial resources with which to make that point.

My points still stand. They are correct. I stand by everything I wrote in my article. Mr Hayward’s article attacking mine is illogical, based on mere tiny fragments of my article, and factually wrong. He owes me an apology.

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