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Indiana Governor Mitch Daniels on state reform, education reform, and why Mitt Romney

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HH: Joined now by the governor of Indiana, the Honorable Mitch Daniels. Governor, welcome back, good to have you back on the Hugh Hewitt Show.

MD: I’m so grateful for the chance to be here, Hugh. Say, as it happens, I got a book to recommend to you. I just finished a great book called In, But Not Of.

HH: Oh, you’re very kind.

MD: I can’t remember the name of the guy that wrote it, but I’ll tell you, it’s worth your time.

HH: I don’t know how you came across that one, but thank you, Governor, I like the plug. Governor, I’m going to start this out of order, because when we last were together at the Republican Governors Association, you started to leave and I had a hard break. I had to get back on the air, and we were talking about the fact, what you did with the Turnpike in Indiana. And I’ve never been able to finish that conversation. So it’s out of the blue, but would you tell people that story, because I think if Governor Romney becomes President Romney, a lot of federal assets are going to have to go the way of the Indiana Turnpike.

MD: I’ll give you the shortest version I can. We had an existing toll road with politicians running it. It was losing money, which was an amazing feat, but they pulled it off. And we saw, meanwhile, we had a big problem, which all of America has. We really do need to rebuild our infrastructure in this country. I’m a small government guy, Hugh. But I do believe that creating a strong backbone, roads and bridges and rail and so forth on which the free enterprise system can operate, is a core function of government. So this is how we addressed Indiana’s problem. We had an auction, we got an unbelievably fortunate bid, a group is running it as a regulated utility. The state still owns it. But they paid us a very large amount of money, several billion dollars, for the right to run it. We control the tolls and all the terms of this, and we’ve got the best toll road we’ve ever had. But in the meantime, they paid us billions of dollars that we have reinvested in rebuilding Indiana. So all the states around us are crumbling right now, and can barely fix a pothole. And we are in a ten year period where every single year, we’re breaking the all-time record for new investment in the long term future, economic future of our state.

HH: Now I’m sure you’re not referring to Ohio when you mentioned all the states around you, but we’ll let that pass, Governor. Is that model applicable to federal assets that are managed by federal bureaucrats right now, Mitch Daniels?

MD: Yes, in fact. I mean, that model and many variations. Government is, first of all, most governments, I guarantee the federal government’s like this. They don’t even know what assets they own. And many of those would be so much more productive in private hands. And so whether it’s, as in our case, leasing it to someone else to run for you, or in other cases, simply selling it so that somebody can try to put it to a job creating, wealth creating purpose, is something they ought to be looking at. You know, in order to try to fend off a debt disaster in this country, we’re going to have to do everything we can think of. That means, as you know, reforming the safety net programs, it means downsizing government in a bunch of places. And I also believe a big contributor to that would be asset sales and disposition.

HH: I think that’s got to be part of the platform in Tampa Bay. Another part of the platform to which I think you’re uniquely situated to speak is the education part. Now that has not been very high on anybody’s radar, because our fiscal crisis is so extraordinary, and our foreign affairs challenges so profound. But we can’t stop working at what has been a less than spectacular success over the last 12 years of federal policy. What have you done in Indiana, again, parting shot, you said hey, did I tell you about the idea we’ve got to let students finish high school in three years, and then give them the fourth year of costs that they save, and I didn’t get a chance to follow up on that one, either.

MD: You remember that? I appreciate it. Well, we passed that bill, and in fact, this fall, the first kids that took the money we were going to spend while they cruised through senior year, these are young people who had the diligence and the smarts to complete their credits, required credits in less than 12 years, and these days, in Indiana, if you’re such a student, you can earn that money, and we’ll give it to you to, as long as your reinvest it in some kind of further education. No, we ran the table on education reform out here in 2011. It included reform of collective bargaining in our schools so that principals are free to run the schools now, not be hemmed in by pages and pages of contract language. We completely took the lid off of charter schools. We, now tenure will be earned as opposed to just based on longevity. And maybe most important, we created a universal choice program so every kid, every family, regardless of means, regardless of income in this state, has a complete choice of public or private education now.

HH: A friend of mine named Richard McKenzie, just retired from the graduate school of business at University of California, Irvine, spent a lot of time in Indiana, actually, because of the Liberty Fund. His final two words of his retirement ceremony was incentives matter. And I think that we will give you your 12th year cost is about the most interesting education reform I’ve heard of in ten years. How many kids have put their hands up for that, Mitch Daniels? And do you expect that you’re going to see all the smart kids take a look around and say hey, instead of going deep into debt for that first year, I’m just going to finish my 12 years of public education in 11?

MD: Right, well this is the first full year. In other words, there were a few who were qualified, but they were well along to doing that before we passed the bill. So the incentives have only just begun to operate. You know, it’s very interesting you’d asked me. I had a young man in my office about an hour ago, one of the smartest young guys I have met in a long time, and he was here to get a little college and career advice. And I asked him if he’d heard of this program, and he had not. And so he’s going back to his school, and take a little survey from me that I think our problem here now is to market it, because I guarantee you the schools don’t, they’re not going to run around telling all their kids this. They’d rather have the money themselves as opposed to have the young person earn it and take it off to college.

HH: Sure, and your coaches are not going to like you too much, because you’re going to be sending, they’re going to be losing their athletes, because mom and dad are going to like this program a lot, Mitch Daniels. Did you get opposition to passing this?

MD: Yes, we did. You know, I can’t say that the schools were too enthusiastic. Once again, they like things the way they are, and they would not like it if a significant number of young people began finishing in 11 years. There were some folks who said oh, well, kids aren’t ready for college at that age, to which the answer is no, but some might be.

HH: Yup.

MD: And you know, let every family decide. Yeah, there was some opposition, but happily, we overcame it, and now we’re embarked on an exciting new experiment.

HH: All right, we’ve got a minute left. Let’s do a little politics. One, is Senator Lugar going to win? Number two, is Mike Pence going to win? And number three, is Mitt Romney going to be the next president?

MD: Well, two and three, I think the answer is yes. I mean, Mike Pence is going to be a great governor, and I think he’s off to a terrific start. I see no reason he shouldn’t succeed. I do believe that Mitt Romney will win this fall, because the need for a major change in economic policy and in dealing with our debt problems before they overwhelm us, and kill the American dream, is going to be apparent, and he’s going to make a great positive case for how we succeed there. And on the first question, I don’t know. We’ve got a very competitive primary between two good friends and allies of mine. And not sure who’s going to come out ahead, but we’ll continue to have a great senator regardless.

HH: Mitch Daniels, Governor of Indiana, thank you, Governor. Always a pleasure to talk to you, enjoy the spring and the Harley time.

End of interview.


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