The man behind the budget

Bush's chief number cruncher's thrifty ways

When Mitchell Daniels, President Bush's budget chief, took up golf a decade ago, he wasn't sure he was going to like it. So rather than buying a $10 leather golf glove, he did something friends say is vintage Daniels: He rifled through his garage and arrived at the clubhouse ready to play - with an old rubber garden glove.

This soft-spoken Indiana native, who holds one of Washington's most influential posts, is famously frugal. He sold extra wedding presents for cash. He once scooped coins from a toilet to pay a bar tab.

His thrifty ethic extends to his philosophy that government shouldn't be a big spender, either - partly because it is unable to address many of society's needs. In fact, the former drug-company executive is downright spendy on things he believes can remedy social ills: In Indianapolis, he devoted big chunks of time and money to help start an inner-city Christian elementary school that teaches Latin and Greek.

Now, as the official author and chief cheerleader of Mr. Bush's budget, Mr. Daniels is playing a key role in reshaping the size and scope of the federal government.

Two of his guiding political lights are former bosses: President Reagan, and Sen. Richard Lugar (R) of Indiana.

As chief of staff to Senator Lugar, Daniels's penny-pinching ways helped the office do something it became famous for: returning part of its annual operating budget to government coffers. The reputation was politically useful: It helped Lugar appeal to Hoosiers' thriftiness and get reelected.

Daniels's political smarts then got him a job in the Reagan administration, where he became a political director. But there, his Midwestern sense of propriety got him in trouble. In the wake of the Iran-Contra affair, Daniels confronted White House Chief of Staff Donald Regan, saying he had become a liability to the president and should resign. Daniels lost that battle - and left the White House, settling back in Indianapolis.

But he retained his sense of ethical savvy. Upon returning to Washington this year, he sold off some $8 million in stock options - thus avoiding the kind of controversy Treasury Secretary Paul O'Neill kicked up when he refused to do the same. Mr. O'Neill later reversed himself amid criticism.

During his time in Indianapolis, Daniels took the helm of the Hudson Institute, a conservative think tank. A constant reader, he listens to history lectures on tapes in his car. Lugar - who is still a close friend - refers to Daniels as "brilliant."

Daniels also did a stint at the biotech firm Eli Lilly, becoming a top executive. This background could lead to charges of a conflict of interest if, as expected, the Bush team takes up the issue of a prescription-drug benefit for seniors. Drug companies oppose the idea, fearing government price controls. Daniels says he'll recuse himself from decisions involving Lilly - though not from those about the drug industry in general.

All this background melds into what longtime friend Mark Lubbers calls an "intellectual Reaganism" in Daniels - a philosophy of optimism and progress.

Likening the Bush White House to the Reagan White House at a recent breakfast with reporters, Daniels cited plans for "the biggest tax cut in a generation" and "modernization of national defense." Yet his political savvy - given the close election - showed as well. This year's budget is "far less bold" than Reagan's early budgets, he said.

But critics say the budget is indeed Reagan-like. Robert Greenstein, head of the Center on Budget and Policy Priorities, says that by not calculating the cost of several big-ticket items - such as a prescription-drug plan, military modernization, and the so-called Alternative Minimum Tax problem - the Bush team is deliberately setting up a future choice between either budget deficits or more spending cuts.

But forcing government to focus on fewer things fits the Daniels philosophy. One thing friends mention most about him is his work with The Oaks Academy. Daniels and a group of fellow Presbyterian church members started the school in 1998 in an Indianapolis neighborhood known as "Dodge City" for its gunshots and crime. "We didn't need government action to do this when we in the neighborhood could to it," says board member and friend Don Fisher.

The school now has 140 kids. Half are black. Half are white. Most are on scholarships. Kids get a "classical Christian education," including grammar, logic, rhetoric, and values.

Projects like these can impart such values more effectively than government, Daniels implied in a 1996 commencement speech at a Christian college. "Those of you who took the opportunity to sharpen these spiritual tools are already wealthy in a way the poverty statisticians do not measure."

(c) Copyright 2001. The Christian Science Monitor

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