Monitor Breakfast: Mitchell Daniels

"It is pretty hard for the president to have created a recession which was waiting for him as he took the oath of office. I don't think he would want to get into a debate about whose it is. In a large extent it is Osama bin Laden's recession. As the NBER [National Bureau of Economic Research] said, there are good signs it might not have finally matured into a recession if not for 9-11."

"[It is] not just in the homeland security area but we will be urging things in the next budget – we have got all kinds of misplaced furniture in the federal government. It is really unbelievable. We have got departments dabbling in things that are the core mission of some other department. There are a lot of things we ought to move around. Any common sense of view of it will agree with that. But it becomes difficult because somebody's subcommittee doesn't want to let go."

"The day that is true I will leave if the president hadn't already asked me to. ...I think that any difficulty I have caused or that have arisen are very narrowly limited. I regret that and I am working on that. These are fine people. I think anything I have ever said was institutional but sometimes misunderstood as personal. And I will be more careful about that. I have been in the middle of all kinds of negotiations and arrangements – other than the appropriations committees – that have worked out just fine and I think in general have been very well treated by members of congress. But there are a few exceptions, I am partly to blame for that, and I'm being more careful."

"We have obligated somewhere in the neighborhood of $6 billion. There are studies done to suggest military action might reach a level of about $1 billion a month but they are not there yet."

"Discretionary spending, by the time we are done this year, is going to wind up growing something like 13 percent. ...It would be a very serious mistake to let those kind of growth rates – underlying growth rates – continue and pile the guns on top of butter. That will not be responsible and we will propose [in new budget year] something other than that."

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