year of the presidency. - and so one of the reasons that president obama pushed the recovery and reinvestment act and even though he spend 1.5 trillion dollars, pushed the health care because he was told, you're not going to have as many democrats in congress the next time around. this is your best bet. use the momentum from the election. use your perceived mandate and the leadership position and move in before people energy trench themselves. this is the time when the media seem most interested. after a first year or so, media sort of have the view of the president and their story about the president and they fit a lot of things into the story and it's been played over and over again for three or 7 more years. host: steven wayne government pro ste sore from georgetown university. thank you for your time.

we'll begin the show tomorrow with clark kent irving, homeland security inspector and donna edwards about her new role heading up the red to blue program targeting open house seats, gop seats considered vulnerable in 2010. after that we'll end with the president and ceo of the american association of homes and services for the aging to just talk about the so-called, class act of community living assistance services and support that. thanks for being with us this morning. we'll be back tomorrow morning. .

>> governor daniels is a republican governor and has a long time in washington before returning home to run for governor. governor daniels, here in washington we're trying to parse the jobless numbers in the united states, and they run fairly similar to what you are seeing in the state of indiana. what's it look like on the ground at home? have we turned the corner? what do you see as happening? >> stabilize might describe it. i would be very cautious about seeing anything else. i don't see it yet on the

ground. i talk to businesses all the time, tend to put a little more stock in what they say than in the statistics. and while here and there i do find firms that say their orders are a little stronger and see some improvement, they're also pretty cautious. very few are hiring at this point. if they are, it tends to be temporary or part-time workers. and i think we're going to need to see more evidence before we can conclude that anything like the recovery we need is under way. >> i've got to ask you about the politics of this. we saw nationwide on friday an increase of 16 2,000 jobs in the country. that has been parsed and disputed on some of the nuances on it. but net-net on the politics, do you think if we have a plus number going forward that changes things for barack obama in washington in terms of the political dynamic? >> we couldn't even have two

substantive questions before we start with before we get into politics? >> politics is substance. >> i suppose. i really don't know. if you had a sustained run of significant improvement, i would be glad for one. i don't know about the politics. i suspect that there will still be a very healthy debate this fall even if we've seen some economic improvement which has been a long time coming. there will be a lot to debate, the health care bill for instance. but i will speak for myself and i think most people in our state, we are rooting hard for an economic recovery and let the politics be what they will be. >> you were critical of the climate change and energy bill that the house passed last year for what it would mean for indiana's economy. are you any more optimistic about the approach that the group of senators are taking where they are looking at a national cap on carbon but

applying it to different seg ypts of the economy. do you see an approach there or some other approach that you think would help us in terms of climate change and energy efficiency and consumption reduction without hurting the economy and the state? >> you couldn't do worse than the original legislation. i think either in terms of our national economy. certainly combrin, which would have been ground zero, that bill was a form lar to higher costs, driving jobs offshore, and for much higher utility rates on people in it at this stage who could ill afford them. so any alternative to that would be prefer rabble. i still think we ought to proceed with extreme caution before we pile yet another set of costs on an american economy which is staggering now and which is about to be hit with the new cost of the health care plan. so i would commend these folks for looking for a new and perhaps better way, but i do hope they will be very, very

careful and remember that we don't have a long period of very strong sustained economic growth in this country. we don't have a prayer of paying our bills let alone lifting the intolerable burden that has been placed on younger americans already. >> is your preference for congress to do nothing this year either on the climate change or energy efficiency side? >> energy efficiency has a lot to recommend. and if they're careful about how they do that -- the best way i believe, maybe everyone could agree to address our energy issues and our environmental issues is effective conservation. but in terms of climate change, i think that well, everyone would be well advised to take a substantial time out. there's been nothing but dubious news about the science of all this now for about a year, including parent scientific wrong doing.

and meanwhile, we're still left with a situation which, even if the zell lots had their way and the most extreme measures were taken, by their own computer models we don't move the world thermometer at all. so simply on effectiveness grounds, in addition to those i mentioned before, i think conservation is a better topic to work on right now than the so-called climate change approaches. >> you mentioned health care. that's been such a bruising fight here in washington. do you stand with those in the republican party who say they want to run on a campaign of repealing the president's health care plan altogether rather than just modifying it or tweaking it in some way? where do you think that should shake out? >> i think you have to answer first in terms of policy but also in terms of tactics. as a matter of policy, this bill is a disaster. it takes the worst features of the health care system we know, the ones that make it cost too much and makes them all larger and therefore more expensive.

so tweaking it or working around the edges of this approach i just don't think has anything to recommend it. far better of course would have been or would still be to replace employer provided health care with its subsidy that helps the rich more than low income with its encouragement to overconsumption and higher prices, to replace it with an individually-based system, which enables every american to be covered and to make their own decisions and to act like good consumers. but i don't think you can get to that more sensible position without at least repealing large portions if not the entirety of this thing that just passed. of course, always, whether it's this or any other subject, the responsible course for our party or any party is to have a better answer. and in the case of health care, i think we do. and so to -- i would approach it tactically in terms of

replacement as opposed to repeal for its own sake. >> but of course you've got president obama in the oval office who would veto presumably any major change that could get through congress. do you think it's worth republicans' time to try and get something through on capitol hill maybe after the election if they have increased majorities or even take one or the other chambers of congress? >> i do. because it might set up an eventual replacement of this i think tragically wrong-headed and expensive bill later on. help the american people to understand a much better way, frankly, a way that is vastly more reformist and different than the current system. the obama bill, as i may say, preserves the worst of the current system, makes it larger and more expensive. so i think it's an argument, it's a debate worth having even in the face of the obvious tactical hurd 8 you just

pointed to. >> i want to ask you about medicaid since you've been critical of the impact of the bill on the role of medicaid in idaho. and the estimates you got are much higher than what cbo has projected the increase will be for the medicaid rolls nationally. the difference seems to be that your actuaries estimate that nearly everyone who become eligible for medicaid will sign up. that's not happening now. about a third are not on medicaid and half of those people get coverage through their employer. so why do you think that under this system that will change, that everybody who will become eligible for medicaid will sign up for it? >> of course, if they don't it would expose another falsy of this bill. they claim everybody is going to be inshurd under this bill. so i think our act wary simply took the administration at its word. if they want to confess failure, then the bill should have said that. we think we've made, unfortunately, conservative estimates at this point, we're

continuing to discover new costs. it's not just the costs that will be visited on some future governor to pick up hundreds of thousands of new people on our medicaid system. we've already been hit with 25 million dollar bills because the federal government is going to confiscate pharmacy rebates. we drove a very good deal out here with the drug companies, but now they're going to take the benefit of that bargain away starting immediately. we also see huge administrative costs coming when we have to supervise a huge expansion of medicaid and, as we understand it, shoulder the administrative costs of the new exchanges, so it's going to be a very expensive thing for taxpayers here and in every other state, and that hidden cram-down tax increase that this bill will neffstate is just another example of the dishonest accounting with which it was

sold. >> have you begun to decide how you'll pay for it? >> well, we're beginning to think about it. again, we're confronting some immediate cost impacts that we didn't see coming and we're trying to figure awa to deal with that. our state happens too be in more solvent state than most. we still have reserves. but this didn't make it any easier. but we're beginning to think at least about recommendations we can leave to our successors in a few years as the biggest impacts of this bill are visited upon us. >> you're obviously opposed to this bill and the attorney general of the state has joined those challenging the constitutionality. given your opposition and the attorney general's opposition, how is that going to affect, if it is, the approach you're going to state in the state's role in implementing this legislation? >> i don't think it will affect

it at off we'll do what we're commanded to do and we'll do it as well as we can by the citizens of our state. if this bill is still in place, i'll be serving another two and a half years, as you know the taxes start immediately but the so-called benefits of this bill don't. so for whatever it's worth, there's a lot of time to plan for its implementation. >> i've been out to indiana with president obama, who sort of made elk hart something of a touch stone for the economy and the jobs picture nationwide. i wonder what you think people there think about the economic turn around and president obama's performance, and throughout indiana, whether they're starting to see something in washington that's being effective in terms of the economy, or if they see a total separation between the economy on the ground and what's going on in washington. >> i don't think they see much impact, at least of a positive nature, from anything that's happened nationally. i can give you the good news, which is that unemployment has

dropped several percent. i don't think you can trace any of it to activities fiscally at least in washington. what those who just visited our state may not have known is that elk hart came to everyone's attention not because it's been down a long time but because it was so suddenly hit. it was at full employment less than two years ago. i hope it's on its way back. but i think it's much more about the indiana economic environment and the long-time advantages than about anything washington has done. >> talk about, as a governor you're dealing with state budget problem. states across the country have enormous fiscal challenges, and they can't deal with them the same way as washington, largely by borrowing money from the chinese. how do the states get their fiscal house in on the other hand at a time when unemployment is slow to turn

around, tax rolls are down and there's economic challenges? >> you do what you have to do. you do what any family or business does. we entered this recession having come from a bankrupt situation four or five years ago. and thank goodness we were in the shape we were in. we had paid off preexisting debts. our budget was in structural balance when it started and we had about 10% of a year's budget in the bank in reserves. we are using those rainy day reserves now and believe they will last to the end of this budget cycle. but we're operating right now with a 9% less revenue than a year ago. even if there's a pretty decent recovery, when we write the next budget a year from now, we'll be dealing with fewer dollars, nominal dollars than we were in 2005. so you know, you'll understand that when we watch washington add spending on top of spending

on top of spending prove completely incapable of saying no to anyone, borrow the money, pass the bills on to our children, i think you know why governors of both parties take a fairly jaundyissed view of what washington in both its branches is doing to us financially. >> on a wider note i want to ask you about the economic impact of having the final four in indiana. and did you not choose butler as being in the final four? >> i have been a butler fan since the age of 10. i had them in the 16, but even i had trouble believing they would beat the top back to back. we're thrilled about it. we're old hands here. we think nobody does it better and think the ncaa agrees so it's here every two years. but it's a very, very special thing to have it not just a

home-grown team but a team of student athletes, genuine student athletes, two all- american academic, math majors, computer engineering majors, finance majors. this team was in class monday after winning the biggest game in school history and in class friday the day before the final four game. that's what college athletics ought to be. >> it's early in washington to ask this question but it's never too early to ask it. we're turning our attention to the 2010 election cycle but also the 2012 election cycle. you were mentioned as somebody who might be among the republican candidates for president. do you see yourself in that field? 2012? >> i told one of your colleagues there has never been a president in the united states in my bathroom mirror and there wasn't this morning, either. it's almost a surrealistic question to be asked or to have

suggested to you. i don't expect to run and i'm not planning to run. i've got a duty here. and as we've been discussing, any governor today has his or her hands full. i've got some views about how our party might make a more positive presentation to americans. i've got some very deep views and alarms, frankly, about the condition and direction of our country. but there are other ways to try to have some impact on those things other than running one's self-, and i don't think i'll have a different answer. but ask me in a year. >> so you're leaving a little bit of wiggle room. don't expect to run is not the same as i will not run. >> i gave an answer like that a month ago, and somebody back here interviewing my wife said, it sounded like mitch cracked the door a little bit. and she said, when he gets home tonight the door may not be

cracked. >> there's a lot to consider there, i guess. >> while we're talking about politics, you mentioned about the way your party can present itself. the republican national committee has had a rough week once again with some scandals over spending and the way in which money was spent, including perhaps receipting expenses for a nightclub with questionable acts in it. and i'm wondering just overall how you think that affects people's image of the party, and also if you would comment on mr. steele's leadership. >> well, it's embarrassing, of course. and nothing more to be said about it than that. it's not very important in the larger scheme. i think the biggest issues facing our party right now are what will we stand for? what will we present to americans? are we prepared to step up in an adult fashion to the unconscionable and frankly i

think nation-threatening debt that has been presently en route to our children. are we prepared to explain how we will keep this country truly safe in a world of implagueable terrorism and new technologies that are -- could literally men yass millions of us. and that's really where our emphasis should be. and anything that distracts from that i think is pretty unfortunate. >> but do you agree with some of the conservative christian leaders in this country that have said that their followoers ought to not donate money to the republican national committee and instead find individual candidates that they like and support? do you think it's time for donors to stop supporting the rnc and look for folks in campaigns across the country that they might prefer? >> i would hope not.

i would hope that immediate final disciplinary action will be taken with regard to whoever it was, and -- that misbehaved here. get rid of them and move forward. but i leave to each citizen, let alone these leaders you speak of, what decisions they'll each make. >> indiana's primary is in about a month, and we've got some competitive primaries in open seats as well as incumbents who are facing real challenges. do you see this year as an anti-incumbent year or anti-party in power year or any dynamic like that, and also wond whear role, if any, you think the tea party will play in the elections, particularly the primary this year. >> i think it's a little of both. although i think democrats have much, much more to worry about. they represent the explosion of spending, the proliferation of debt, the health care bill by

itself that i think is the primary motivator of people. so it may fall out on people who are seen as washington careerists regardless of party. but i think at least for the moment it's much more likely to be a problem for the party that's in total power in washington. as for the tea party, i think anything that brings new people and energy to the process has something to recommend it. and i think that these folks have performed a very important service by focusing the attention of americans, more americans, on the unsustainable fiscal path that our leaders have placed us on. now, that's -- getting riled up is a start, but it's just a start. and what has to happen next of course is we have to come together as americans, everyone who is willing, and talk about a very, very different set of future spending commitments

that we can actually afford. >> let me pick up on that point, because in fact the spending in washington happens because it's popular with the people who send politicians here. and i'm wondering whether or not you feel that there has been a sufficient change in public attitude about the national debt that commands a majority position at this point. and, if not, what will it take? >> ths this is a central issue and most important question facing our democracy in my opinion. we've had skeptics about democracy as long as the word's been around. you can fool around with this government but sooner or later 51% will vote to exploit 2 other 49, sooner or later people will lose their sense of self-reliance and discipline that democracy requires. so we'd better find out i personally am optimistic. in my job, i don't bring these national topics up, but i'm out all the time visiting with

hoosiers and i get asked now and then. and when i say to people that why should we send a pension check to warren buffet, why should we pay for bill gates' health care? it doesn't make any common sense to them. they're prepared to make those kind of changes. when i say to people why don't we bifurcate these systems and provide total protection for everybody who is currently or in the next x years going to benefit but have a new compact for the younger people who are going to pay all the bills that they can afford? this doesn't strike people as radical. tens of millions of americans are already in that situation. here in indiana we had a teachers retirement plan. eventually the act wary said it was unsustainable. it was kept in place for the existing beneficiaries and a new plan came into being for the new hired. many mlts of americans have been through this in their corporations or own states. surely confronting the

arithmetic we're confronting, we can summon the common surps as americans to make changes like that. >> we have about two and a half minutes left. last question from each. >> history doesn't really agree with you on social security in particular. politicians who have tried to do something to rein in social security have faced tough political dynamic after even touching that third rail of american politics. do you think the republican party could run in 2010 or 2012 on a platform of changing social security in the way that you just described and pick up any seats at all? >> we have a saying here in indiana. i was born at night but not last night. i mean, i know of course that third rail realities you are talking about. we have all seen the granny card played and dem gogged and successfully so. i will tell you, i was not proud to see my party talking about this as they did in the

recent debate. we're going to have to spend less on medicare somehow. but i'm not, for the reasons i just gave, pessimist tick that this will always be the case. if so, we're just going over the cliff. and i will say this. i think it's equally obvious. these problems could be best dealt with by the democratic party. they have the positioning, the field position politically to do it and to tell to those who are always demanding more, more, more of somebody else's money, sorry, we're going to have to draw the line. but if they won't do it, then our party, with all the risks that you talk about, will have to step up. this would be our responsibility as the loyal opposition. and if people aren't ready for it, so be it. but that's no excuse for not trying. >> you were president bush's first budget director, and karl rove just came out with his book on his time in the administration. you were not mentioned in the book. i'm wondering if you're

disappointed in that and what should have been included in there. >> i'm always happy not to be mentioned in these things. you know, i would like to think it wasn't because i didn't do some -- perform some useful service while i was there. i haven't read p the book. but i'm sure i'll learn some good things about it. they just won't be about me. >> have a good basketball weekend. thank you for spending time with us. >> thank you off >> let me turn to you for a little context. first, on the questions surrounding the constitutionality of the health plan. if in fact the states attorneys general are successful in challenging the cons tuletnalt, that's only one portion of the larger plan. what is the -- what are we left with as a law if that challenge is successful?

>> the fight here is about whether or not the government can tell every american that you need to have health insurance. we tell people you need to have car insurance. but if you don't have a car, you don't have to buy car insurance. it's not the same on health care. because everybody has got health. so having that individual mandate become extremely controversial. it's structured now as a tax in order to get around some of these constitutional issues. but if that is thrown out, that's going to be sort of the guts of this health care bill. i'm not sure what's left. i'm not sure how you can structure this deal in which they bring in millions of new customers for the insurance companies at the cost of bringing in people with preexisting conditions and other expensive folks. but if you don't bring the healthy people in, the math doesn't work. >> that of course was one of the insurance industry's main arguments. and indiana is home to ll