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General News    H3'ed 5/14/11

Mitch Daniels, Architect of US Debt Crisis

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Though Daniels' defenders say it is unfair to blame him for all of Bush's policy decisions, Daniels was "a key figure in the administration, helping design policies and pressing publicly for their enactment," Salon.com's Brendan Nyhan reported in a Feb. 12, 2002, article.

Besides citing Daniels's political role in pushing through Bush's deficit-oriented policies, Nyhan noted that Daniels' appointment to run the Office of Management and Budget marked an important evolution in the role of budget director from accounting wonk to political marketer.

"It is another sign of the importance P.R. tactics play in American politics," Nyhan wrote. "The OMB director -- once a budget expert -- is now an operative chosen for his political skills, particularly his ability to sell the administration's economic proposals in the media.

"In August [2001], Daniels admitted as much, telling the Wall Street Journal that '[t]o the extent I bring anything ... to this job, maybe it's an ability to think about how a product, whether it's Prozac or a president's proposal, is marketed.' Predictably, he has displayed a disturbing tendency to make dishonest claims for political advantage on federal budget issues."

For instance, Nyhan noted that Daniels first promoted the Bush tax cuts as a way to "share some of this large overcharge [the surplus] with the American people," but later he repackaged it as an economic stimulus. He also blamed the sudden $1.345-trillion drop in the projected surplus on various economic and technical factors, but the Congressional Budget Office cited the tax cut's $1.7-trillion price tag.

In his hard sell for Bush's policies, Daniels also was not above hitting his opponents below the political belt. In December 2001, he denounced Democratic "tax and spend extremists" as "people for whom taxes can't be high enough and we can never spend too much government money."

Cooking the Books

Daniels also was ready to stoop to accounting trickery to make Bush's budgets seem less irresponsible. Nyhan wrote...

"In the federal budget process, [Daniels'] OMB has employed a number of accounting devices and misleading assumptions to conceal the true costs of tax cuts, restore budgets to balance artificially and otherwise tried to achieve political ends by tricky budgetary means.

"In the Bush budget plan, for example, the administration projects a return to surpluses in 2004 or 2005, but this ignores the cost of extending a provision protecting millions of middle income taxpayers from a tax increase under the individual alternative minimum tax. ...

"It is a matter of serious public concern that the federal budget director has become just another spinner dragging down public debate. Though he is a political appointee heading an executive agency, Daniels is also a public official with a larger responsibility to promote honesty in federal budget debates.

"But after more than a year at his position, he still frequently makes deceptive claims often without challenge. Daniels may not recognize the difference from his previous job [as a pharmaceutical executive], but we must. It is unacceptable to market our nation's economic policies like Prozac."

Yet, Daniels continues to lead a charmed life as far as Official Washington is concerned. From Fox News to MSNBC, he is praised as a "fiscal conservative" who would uplift the debate over the nation's debt crisis. He is widely praised for his work as Indiana's governor and -- although his title as Bush's budget director is mentioned in passing -- his work on some of the most reckless budgets in U.S. history escapes scrutiny.

Much more attention has been spent on his supposedly uncharacteristic deviation as Indiana's governor into enacting some of the nation's harshest anti-abortion rules and other right-wing social legislation. There's also been some coverage of his off-again-on-again marriage and whether his wife wants him to seek the White House.

But Daniels stands today as the latest Republican hailed for his wisdom and courage regarding budget issues.

He follows Rep. Paul Ryan, R-Wisconsin, the House Budget Committee chairmen whose inside-the-beltway reputation as a "serious" thinker only collapsed when the voters got a look at his plan for "saving" Medicare -- by killing the current government-run system and replacing it with a private-sector voucher approach -- while demanding still more tax cuts for the rich.

The fact that the Republicans, including Daniels and Ryan, were major supporting players in George W. Bush's diversion of the United States from its course a decade ago toward a debt-free government -- indeed one with a sizeable surplus -- to one burdened with the largest debt in the history of the world is never mentioned.

Like Ryan, Daniels remains "a fiscal conservative," at least in the boilerplate judgment of Washington's conventional wisdom.

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Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at
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