MITCH DANIELS, GOVERNOR OF INDIANA: Oh, I think at the moment it‘s worrying about folks who are out of work or vulnerable to that, where our state‘s been hit suddenly and hard. And trying to make certain we‘re doing right by them while protecting taxpayers at the same time.

But the difficulty of the job, its chores shifts from year to year, sometimes month to month.

LAMB: What was the best training for the job of all the political jobs you had in the past?

DANIELS: It wouldn‘t have been any of the political jobs. The best training I had was the years I spent in business, trying to learn how to help other people do their best work in large numbers, manage or lead a complex organization for results, and keep an eye on every dollar. I would say by far that was the best preparation I had.

LAMB: You ran an ad I want to show in your campaign, and I will ask you about it when we get back.

(VIDEO BEGINS)

DANIELS: Whatever your outlook on politics, here‘s some good news. This is the last time you‘ll have to watch me in an ad like this. You see, governor is the only office I‘d run for or ever will. I have no ambition except the one we started with to tackle Indiana‘s problems head-on and he is a better place to our kids and there‘s.

We‘d like to devote four more years of hard work to strengthening education, putting a permanent lid on property taxes, recruiting new jobs and making college affordable for all.

Rehire us, and we will.

(VIDEO ENDS)

LAMB: Why did you say what you said on that ad about never running ever again for any office?

DANIELS: I try to do my own work, whether it‘s speeches or including advertisements that we ran. I always want to speak my own words if I can. I wrote that ad probably 10 months, Brian, before the election. I always knew what the final – the final statement and summation would be.

And I suppose I said it because I wanted to people to know that we‘re not on the make for anything else, that we really sincerely wanted a chance to improve our state, and that we‘d give every bit of effort to that, and, well, maybe to reassure people they wouldn‘t have to you know deal with us anymore after then.

LAMB: Are you still of the same mind, no matter how often people are writing these days, ”Oh, we think we‘re going to get them back in in the 2012 race for president?”

DANIELS: I am for many reasons. Yes, I am.

LAMB: Not going to go back on that under any circumstances.

DANIELS: I‘ve painted myself in about as well, I think, as a person can. I‘d say I‘ve got lots of reasons for it, I suppose, both negative, but I want to concentrate on the positive reasons, and that has to do with doing what we said we‘d do.

We have made a very determined effort for getting on six years now to tell people in our state about the big changes we wanted to make, all the things we‘d like to do. And we are almost religious about trying to live up to those words.

And I would like to complete eight years in – in that fashion and have – have – I hope the citizens of my state feel that, well, here for while a group of people came and – and went from public service, who meant exactly what they said and really didn‘t have any other agenda.

LAMB: So what are the negatives?

DANIELS: Oh, I wouldn‘t subject myself and my family to what I see as the savagery of presidential politics. If that‘s cowardly, then it is, but you know I just – really not for me. There‘s a lot about the way people campaign for president right now that I find a little superficial and ...

But I just – I think principally that I‘ve – I‘ve hired on for four years. I‘m duty bound to fill out those four years, and it‘s a very fulfilling thing to work on, by the way, if – if you can see progress being made. And so far we have.

LAMB: So when did you decide – and the last thing I read was that you went to 92 Indiana counties three times. Did you – did you ...

DANIELS: Minimum, yes.

LAMB: Three times in 92 different counties.

DANIELS: When I first ran, yes. And I‘ve – I‘ve never really stopped traveling at all. I travel all the time, but, yes, we – we went to each of our counties. I remember we said, ”Well, we‘ll cover them all with lap one in the first 100 days,” and we did it in about 98.

LAMB: How‘d you do it?

DANIELS: Principally, in an Indiana-built RV that ...

LAMB: Was it built in Elkhart?

DANIELS: Yes, it was. It was. And pretty much your entry-level model, but sort of a rolling fraternity house with two young guys and me, and that was it, and on the road all the time.

We went to all those places that – where people say, quote, ”No one ever comes here,” and stayed overnight in people‘s homes, which I still do. I stayed overnight in Yorktown, Indiana, just last week, and probably about the hundredth family that‘s allowed me to mooch.

But it‘s just been our – it‘s been our MO, and I‘ve learned a lot, and I‘ve – I can name a whole list of – of issues or problems that I first heard about doing that that we later were able to go do something to solve or address.

LAMB: Give us an example and personalize it, if you can.

DANIELS: OK, sure. I remember the – the barstool I was sitting on in Clay City, Indiana, with a couple of single moms when they told me how terrible a job the state had done for years helping them enforce their rights to child support.

And I went back and dug into it and found out that‘s right, that some court would award a mom or maybe a dad money, and only 50 cents of the dollar ever got collected on average. And so we‘ve worked really hard on that. We‘re pushing 60 cents or 61cents now.

I remember the – the diner in Muncie, when I find out about how many kids were waiting on the autism – for treatment for autism on a waiting list sometimes for years. Still a problem, but we‘ve done a lot about it.

I remember the highway worker who first told me. He said, ”You know it‘s a joke. We don‘t have a third of the money we need to build all these roads people have been promised.” There was a golf tournament out not too far from where you grew up, some charity outing, and I went out and checked, and he was right, and we went and did something big about that.

So you know I just recently saw a man I admire a whole lot, Lamar Alexander, former governor and now senator from Tennessee. And I told him early on in this adventure what I was doing. And he said, ”That‘s exactly what you should do.” He said, ”It‘ll probably make you a more successful candidate, but it would definitely make you a better governor.” And he was right.

LAMB: Let‘s quickly go through the different things you‘ve done. Monongahela, Pennsylvania, you were born. What you did you come to Indiana?

DANIELS: The family arrived in Indiana in ‘58 or ‘59, I guess. I was about 10 years old.

LAMB: Lived where?

DANIELS: We had lived around the south, actually. I never lived in Pennsylvania -- just mom wanted to hatch me in her hometown hospital, same – for the record, same hospital room as Joe Montana. That‘s where the athletic resemblance probably stopped.

We lived in Tennessee and Georgia and moved to the Indianapolis when I was 10.

LAMB: Went to high school where?

DANIELS: North Central High School -- certainly at that time I believe one of the handful of best public high schools in America. We were all so fortunate to go there. It showed me that you can have uncompromising excellence in the public schools if we have the right elements.

LAMB: College?

DANIELS: Princeton University.

LAMB: Law school?

DANIELS: Night school, on and off. Finished at Georgetown while – while working out here.

LAMB: First thing you did in politics?

DANIELS: Volunteer – well, no, sorry. Lowest person on – on the totem pole for a campaign for Bill Ruckelshaus.

LAMB: Sixty-eight.

DANIELS: Yes, unsuccessfully – close race for the senate in our home state and then went on to renown as – in the Nixon administration, resigned in the Saturday Night Massacre you‘ve ...

LAMB: What were you doing?

DANIELS: First head of EPA. Oh, I was ...

LAMB: You worked for him when he was first – Ruckelshaus – when he was first head of the EPA.

DANIELS: No. Just when he ran unsuccessfully for office.

LAMB: And then what was next?

DANIELS: Well, I finished school. I – I fell in with – with then boy mayor of Indianapolis, Dick Lugar, now distinguished – our distinguished senior senator and the finest public servants I ever expect to see.

And he was an idealistic and an active, a very active young mayor at a time when the cities were at the forefront of really American consciousness, and he was making great transformations in my hometown. I went to work for him a couple of summers, and he talked me into sticking around for a little while – namely, 13 years.

LAMB: Now, you just turned 60?

DANIELS: I did.

LAMB: So how old were you when you started working for him?

DANIELS: Oh, 20.

LAMB: And then what? After you worked for him as mayor, what was next?

DANIELS: He got elected to the Senate, and I‘d been part of all that. He asked me to come along, and I did. And I spent the next eight years organizing his affairs here.

LAMB: Working for him at the Senate.

DANIELS: That‘s right.

LAMB: And what did you learn about all this business when you were in the Senate?

DANIELS: Oh, how – how patient and how difficult one has to be in the legislative process. Incidentally, although I‘m so incredibly grateful that great people like Dick Lugar, Lamar Alexander serve in – in the Congress, it would probably never be for me.

The difficulty of – of making a major difference requires, as I say, great skill and great patience, but I – I saw that it can be done, and he did.

LAMB: What year did you leave Senator Lugar?

DANIELS: In ‘84. I was on my way home. By that time Cheri and I had three girls, and we‘re very intent on raising them in Indiana. I had never really expected to stick around Washington as long as I did, but Senator Lugar is a very persuasive person.

I felt – I really felt every day working for him was a day of graduate school as well as a day of work, and – but I got a call from friends in the Reagan White House, and they asked me to go down there, and the next three years were spent there.

LAMB: Doing what?

DANIELS: I was assigned to work with sort of the federal system so governors, mayors, local officials – I had had at least some background in local administration – later on they added the political office, and so I supported the president in those two ways.

LAMB: So that came to an end what year?

DANIELS: Eighty-seven.

LAMB: Then what?

DANIELS: I went straight. I went home, went into private life, where I thought I would stay the rest of my working days, and had great, great experience for the next more or less 15 years.

LAMB: Doing what for whom?

DANIELS: I was CEO of a research organization called the Hudson Institute for a few years, and then as I sometimes say, malpracticed some law on the side part-time. The legal profession was spared my – the embarrassment of my services for very long.

And then I – one day the phone rang, as phones do, and it was Eli Lilly & Co.

LAMB: Based in Indianapolis.

DANIELS: Yes, and what I consider the single biggest piece of – of many good pieces of good fortune that I ever – that ever came my way, and I went to work over there for 11 years.

LAMB: Back to politics in what year?

DANIELS: The phone rang in December of 2000, and it was an inquiry about coming to be part of the incoming Bush administration, which I accepted.

LAMB: You mean that George Bush administration.

DANIELS: Yes, so – so ...

LAMB: And you accepted. Did they offer you a job as director of OMB right there?

DANIELS: Not initially. The first call was about a different job, which I said, ”Oh, thanks, but no thanks. I‘m productively occupied here, and you can get someone better for that.”

Then they called back, and I went whole and told – told my wife. And I said, ”Cheri, now we have a problem. Now they‘re calling about the one jobs they‘ve got I‘d probably be interested in,” and that was -- that was OMB.

LAMB: Here‘s a piece of tape a few testifying back on September the 6th, 2001. It‘s not very long. We‘ll just watch this.

(VIDEO BEGINS)

BYRD: The president is the biggest spender hands down in this town. The administration with its tax cut is the biggest spender hands down. That‘s money that‘s being spent going out of the treasury. So when you‘re talking about spending, big spenders, that‘s the administration. They could all of them look into a mirror.

Now, what‘s – what‘s to be done here? We‘re facing a crisis.

(VIDEO ENDS)

LAMB: That wasn‘t much from you, but I remember watching that, back then you were at the time being called the ”Blade.” And if I remember right, you are trying to cut spending.

DANIELS: Yes.

LAMB: But Bob Byrd, among others, told you, ”Not on my watch.”

DANIELS: I still own that tie, by the way. I had it on the other day.

Well, I‘ve been curious to see what I – I said. I – I know what I hope I said, which was, ”Respectfully, Senator Byrd, when you let people keep money and spend it themselves, that‘s not government spending.”

And so I would‘ve – I would‘ve taken exception to his characterization but – well, there were a number of interesting encounters back in those days. I – I enjoyed jousting around a little bit with members of the legislative branch.

LAMB: You got up beat up pretty badly back then when you wanted to cut. I mean you would go up there and testify, and they would – they were in your face. I remember watching it.

What was your reaction when you were going through that?

DANIELS: Well, I try to take it has some good humor. There‘s an element of – of stagecraft in what they do, particularly when you folks are there and cameras are rolling. So you sort of discount a little bit for that.

But it was said, I know, at the time that I was a little more combative and answering back then some folks do. I mean it wasn‘t you know -- Brian, I remember thinking at the time that by that time I wasn‘t a spring chicken or a – or a kid anymore, and I didn‘t intend to stick around Washington.

And so I wanted to – I certainly didn‘t want to do anything that would be counterproductive for the administration, but I probably felt a little less constrained than some folks do.

If they were talking rot, sometimes I told them so and – and really argued back, because I didn‘t particularly – I wasn‘t looking for fights, but I didn‘t particularly care. I never was expecting you know to be up there lobbying are asking favors from – from someone I might‘ve ticked off.

LAMB: During George Bush‘s presidency for eight years, the debt increased $5 trillion. He did not veto a bill until September I think of 2006, and in the end is the – less vetoes then anybody had seen at least since Franklin Pierce or something like that.

Did you ever recommend a veto that he said no to? And why did he not use that veto to keep the spending down?

DANIELS: I didn‘t. Came close a time or two, but I generally felt that if a bill had got all the way to the president that was a candidate for veto, it meant that we somehow – somehow we as a staff had failed. So I didn‘t.

Now, later on I certainly saw some that I probably would‘ve made such a recommendation about, but I think it was long-term a bad thing in multiple ways that – it‘s interesting you know that President Bush was attacked so relentlessly as – for being somehow divisive, and yet he didn‘t veto bills.

He was constantly trying to work with the Congress. You won‘t have any – I bet you could ransack the C-SPAN archives. You won‘t find a foot of tape in which he disparaged somebody personally or called someone a name.

And just one of those ironies, but, yes, I think certainly in – in the rearview mirror, a tougher position on spending would have served him well, and later on the Republican Party well.

LAMB: There‘s a point of controversy back in the early days when Lawrence Lindsey was asked how much it would cost in Iraq, and he said $200 billion, and everybody said that‘s a bunch of baloney. And you were in the middle of all that, and you defended it. How does it look from this point of view?

DANIELS: Well, I‘ve got a very thick file to confirm what actually I said at the time. You know we were asked – we at OMB were asked to cost the first supplemental to pay for the Iraq war.

And it‘s very, very clear on the historical record what the assumptions were. We weren‘t war fighters. We were estimators. So we said, ”OK, what kind of war are you going to fight and how long are you going to be there?”

And the question was how much would it cost to defeat the Iraqi army and be out six months later? And we gave a number, which turned out to be very much on the mark.

Larry has a different, more macro approach. He just looked at past conflicts, compared them to GDP, and said, ”Well, it could be $200 billion,” but you know this wasn‘t going to be World War II or Vietnam or certainly not – that wasn‘t the supposition that the time.

LAMB: Were up to about $700 billion at least. What‘s your opinion on all that?

DANIELS: Well, I think that I‘m not going to second-guess anybody‘s decision either at the outset or along the way. I will just say that it‘s had profound consequences. I think is the single biggest reason why the last election was lost, just fatigue of it all. It was turning around, but not – not in time to really make it obvious.

And $700 billion is a lot of money. But you know I – I was there. There‘s some things that people so easily forget. I was in many, many meetings after September 11th, the National Security Council, Homeland Security Council.

The only question was where and when will the next attack be? There was no doubt in anyone‘s mind. No one they‘re would‘ve ever forecast – dared to forecast we‘d go another eight years without an American life lost to terrorism here.

And we all know the history of all the intelligence all of the world that believed there were weapons of mass destruction inside Iraq. And so people should be a little more charitable I think. Try to put yourself in the position of the decision-makers who – who had to make that very difficult call.

LAMB: What date did you leave the OMB job?

DANIELS: June 6th, ‘03.

LAMB: Why?

DANIELS: Family, principally. I had been commuting with the job. We weren‘t about to uproot the girls with three in high school at the time that this all came up. And I had missed most of high school for my – my youngest, Maggie.

And so I had to decide whether to serve out the term. We were approaching the point in any White House where I think people have to ask themselves, ”If I‘m going to go, I should go now.” If you get any closer to the next election, you really owe it to the president I think to step out, and not – not be breaking somebody new in in that year.

So I decided to go home, went and asked for my honorable discharge.

LAMB: What did you do then?

DANIELS: Then, and it was in sequence, I turned my attention – having made that decision, I turned my attention to these – I won‘t call them friends; I‘ll just say well-meaning people back home who are after me to become a candidate for governor. And so I made that decision after – after first deciding about coming home at all.

LAMB: Just a couple of days ago you gave a budget address. This is a little clip from that on June 1st.

(VIDEO BEGINS)

DANIELS: If you‘re a taxpayer, ask your legislators to put the general public interest first and say no to the special interests, who demand money we just don‘t have right now.

When some lobbyist or legislator promises more spending on some favorite cause or project, ask him, ”Which of my taxes are you proposing to raise and why do you want to do that?”

Across America people are asking how Indiana has kept its head above water while everyone else is drowning. It‘s because we‘re Hoosiers, of course. We have this quaint custom of not spending money we don‘t have.

If we keep our common sense now, we‘ll get through this very tough patch and come out ahead of other states.

(VIDEO ENDS)

LAMB: What‘s a Hoosier?

DANIELS: Well, we debate that you know. We debate the etymology of the word, and no one‘s – no one knows for sure. But in my judgment it‘s a – it is a person of basic decency and – and compassion and common sense. That‘s the way people tend to be.

You know this. We think you represent as well, by the way. So folks across America want to know what a Hoosier is? I‘d – I would say, ”Look at Lamb; you pretty much get the picture.”

LAMB: I‘ve seen a definition of a Hoosier is a hick.

DANIELS: Yes, I know that in – in Missouri this is the – this is the parlance. I learned that reading the biography of Jesse James. So it goes back there somewhere. But to us it has a more positive connotation.

LAMB: So the circumstances for you in this state – I‘ve heard somebody say, and I‘ve tried to find the actual figure but couldn‘t, that Indiana‘s only one of three states with a surplus?

DANIELS: Well, I don‘t know how many are left, but there aren‘t too many. We still – yes, we still have about 10 percent of the year in reserve, and that‘s only been because we‘ve been extraordinarily careful about spending all along the way.

But you know revenues dropped 8 percent last year. You can‘t take too many years like that and still having a savings account, but we do.

LAMB: And you say in your message that you‘re going to increase – or going to decrease then by 2.5 percent ...

DANIELS: Yes.

LAMB: ... and still increase education.

DANIELS: Well, you set priorities, just as any family or business does, and that‘s – that‘s our suggestion, and I hope that we can get the legislature to go along with it.

You know elsewhere in that speech, I put up maps that showed how many states – more than 2/3 – that have cut education, sometimes vary drastically. We haven‘t had to do that.

I put up a map that showed how many states have raised taxes, and it‘s getting close to 40, and we haven‘t had to do that.

I said to my fellow Hoosiers that in business the best, the strongest businesses tend to improve their position – market share, maybe – in tough times. Weaker competitors tend to fall back. And I want our state to think about it the same.

If we are able to keep services up and taxes down while everyone else is going the other way, businesses will come to Indiana more often when – when they‘re ready to invest again.

LAMB: Current population of Indiana?

DANIELS: Six point three million.

LAMB: Where does it fit among the 50 states in size?

DANIELS: About 16th or 17th.

LAMB: In the legislature, the senate and house, made up Democrats and Republicans – what‘s the break?

DANIELS: You have around six and three – Democratic. Sorry ...

LAMB: No, I‘m – I‘m sorry. I did mean the state – I didn‘t mean the U.S. legislature. I mean in your state house.

DANIELS: Yes. The Republican – the senate is Republican by a fairly significant margin. The house is Democratic by two seats. So we have divided government.

LAMB: When you read about your history as governor, everybody writes about two things, and you know what they are. I won‘t even – you tell me what they are.

DANIELS: The toll road and daylight savings time.

LAMB: All right. Start with the toll road. Where did you get the idea to sell the toll road for $3.5 billion? And what toll road is it?

DANIELS: We have, across the northern part of the state, an Indiana toll road for 50 years, and it‘s about 157 miles. It crosses Indiana from border to border and connects to the Chicago Skyway.

You know as I‘ve often said, I didn‘t get up one morning and say, ”Boy, wouldn‘t it be fun to you know lease the toll road?” I got up many days. I told you about that highway worker who said, ”There‘s a sham here. There‘s a fraud. People have been promised roads we‘ll never build.” And he was right.

And so I got a lot of – I stayed up a lot of nights thinking, ”How are we going to solve that problem?” You know the nation is now aware of the big infrastructure issue.

The president rightly tried to center his so-called stimulus bill on infrastructure. I wish more of that had – had dealt with that, as opposed to what Congress did. But he was right about that.

Well, Indiana got a three-year head start on this problem. And we looked at more than 30 options for how you might find more money to invest in our future. And I finally realized there was – we could do the other 29 and probably not have enough to really address our problem. I thought I‘d try what we did try.

We had an auction. Our timing was good, a lot of bidders and just an unbelievable bid. We got probably three times what the – this toll road was losing money. You say why? Politicians ran it.

And many, many people are now writing that the successful bidder overpaid. Well, I wish them well. I hope they get their money back, but Indiana got almost $4 billion free and clear, not a dollar of taxes, not a dollar borrowing, and we‘re reinvesting all of it, and so in – in our future.

At it was absolutely the best thing probably we will ever do. No matter how many other reforms we pull off, I don‘t know what we could do that would touch this. The benefits will be there for generations, and the payoff will also come in the jobs that located Indiana because of that infrastructure.

Somebody asked about you know was it a good deal. I said, ”It‘s the best deal since Manhattan for the beads, except this time the natives won.”

LAMB: And what has happened? Who bought it, first of all? Who leased it?

DANIELS: Yes, well, an Australian bank organized the financing, and a Spanish operating company – you see, this is very conventional in Europe.

It strikes some Americans as new, but there isn‘t anything remotely new about this. Some of the earliest roads in Indiana were privately built toll roads. And all over the world today there are many others. So these people know what they‘re doing.

By the way, we not only got $4 billion. They‘re putting billions into the road. This road had no electronic tolling and probably wouldn‘t have for another 10 or 20 years in political hands. But it got it within the first few months of – of their operation.

LAMB: And so what do they – what‘s happened to the fee – fees that people pay.

DANIELS: Oh, it‘s a – it‘s a regulated utility. They can‘t raise the tolls except under the terms of the contract, basically limited to inflation.

LAMB: Do you think they got a good deal?

DANIELS: Oh, yes.

LAMB: They – not you.

DANIELS: You‘ll have to ask them. But the world – the world financial press says Indiana clipped – took them to the cleaners. You know my mother won‘t – will come down from heaven and smack me if I – if I act like I‘m gloating.

I would just say that we were very, very pleased with what happened and with the benefits from – from investing this money.

LAMB: We‘ve got a couple of clips here. I want you to explain what these are, but this is one where the toll road comes up, and you tell me what we‘re looking at after we finish it.

(VIDEO BEGINS)

UNIDENTIFIED PARTICIPANT: I‘m not a Mitch fan.

DANIELS: Well, that‘s allowed. Not everybody is.

UNIDENTIFIED PARTICIPANT: I‘m not a Mitch fan.

DANIELS: Anything in particular?

UNIDENTIFIED PARTICIPANT: Huh?

DANIELS: Wasn‘t anything in particular?

UNIDENTIFIED PARTICIPANT: I just wondered what we‘re going to give away next.

DANIELS: We didn‘t give away a thing. I got you the best deal you‘ll ever get.

UNIDENTIFIED PARTICIPANT: But where are we going to be 10 years from now on our highways? Where are going to make those ...

DANIELS: You‘re going to – you‘re going to – in the ground. You‘re going to have four billions of roads you would never have had, and you didn‘t pay a nickel of gas tax for it. Would you like to pay a triple gas tax? Would you like to not build the roads? That‘s the choice we had.

We could not build the roads. We could triple the gas tax. Or we could borrow a lot of money and Kyle could try to pay it back the rest of his life.

Kyle: I‘m too poor.

DANIELS: Yes, so I didn‘t thing that was a good idea. And – and don‘t let anybody tell you we gave anything away. We – we got $4 billion, and you didn‘t have to pay a nickel for it.

But I appreciate your point. And, listen, I respect your point of view. OK.

UNIDENTIFIED PARTICIPANT: OK. I just kind of ...

(VIDEO ENDS)

LAMB: What do politicians mean when they say, ”I respect your point of view?”

DANIELS: Well, the gentleman lacked some information, but you know I – I respect anybody who is an active enough citizen to pay attention to these things and take a point of view.

LAMB: What were we watching there?

DANIELS: You were watching a piece of a long series of reality shows. Some filmmakers got wind of what I was doing, traveling the state, and – and they asked to come along and just record it, and whatever would happen would happen.

I thought – I – I humored them. I said, ”As long as you don‘t spend much money, because this is going to bomb.” And secondly, I said, ”I don‘t want anybody to feel like a prop. The first time somebody feels like you know this is some kind of stunt, then you‘re out of there.” No one ever did, and so there was something like 20-some shows, and you just see ...

LAMB: Where‘d they put them?

DANIELS: Oh, on cable stations, I guess. Eventually, it became so popular they had to put them on – oh, Sunday mornings next to the talk shows and things like that.

LAMB: Let‘s look at another one just so we can get an idea.

DANIELS: Yes.

(VIDEO BEGINS)

DANIELS: First thing you need to know about this is that wasn‘t my idea – only in the most indirect sense. I am the one who said that if I was going to become a candidate for public office, I wanted to do things very differently, spend all my time on the road with the people of Indiana, and more than anything, be authentic, say just what I thought, be just who I am, let the people decide.

JANICE HOODIK : Are you Mitch Daniels?

DANIELS: I am.

HOODIK : Nice to meet you. I‘m Janice Hoodik .

DANIELS: Hi, Janice . How‘re you doing?

HOODIK : I‘m fine.

DANIELS: So you actually know who we are, huh?

HOODIK : No, I don‘t.

DANIELS: Still. When some of my old friends asked if they could come along with a movie camera and later if they could make a show out of it, I thought it was the craziest idea I ever heard.

DANIELS: Thank you so much for coming.

UNIDENTIFIED PARTICIPANT: No, thank you. You‘re quite welcome. I think you know my husband?

DANIELS: Well, I guess I don‘t – I don‘t know. But if I don‘t, I guess I‘m about to, so.

UNIDENTIFIED PARTICIPANT: And what‘s your last name?

DANIELS: Daniels.

UNIDENTIFIED PARTICIPANT: Daniels.

DANIELS: Right.

DANIELS: For those who watch the show, for better, for worse, you‘ll get a close-up first-hand look unplanned and unscripted.

(VIDEO ENDS)

LAMB: Did she really not know who you were?

DANIELS: Oh, we had them all the time for while you know. Those were from ‘03 and ‘04. Nobody knew who the heck I was for a long time, so there were a lot of fun moments like that.

LAMB: And you didn‘t – you say you didn‘t think this up. This wasn‘t your idea.

DANIELS: No, I thought it was – as I said, I thought it was probably a bad idea, but it was in keeping with something we were trying to do.

I just remember now that I said in that little intro, if we‘re going to -- if we‘re going to do this whole thing, I wanted to try it in a – in a different way and try to put the personal contact back in politics, get it off the tarmacs and – and TVs – out of the TV studios. And that‘s just been our practice.

I want to stress, fine, that it wasn‘t – we did it on a sustained basis for 16 months. It wasn‘t a you know one weekend listening tour thing. And I‘ve never really stopped. I mean it‘s become – it – I‘ve traveled as often as I can consistent with the job.

You know I was – I was unemployed then, so it was easy to travel every day, but even now as often as I can. Now it‘s a lot of times on my motorcycle now.

LAMB: I‘ll come back to that, but you are the first Republican to win in 16 years in Indiana.

DANIELS: That‘s right.

LAMB: First time around, you want by how many percentage points?

DANIELS: About six.

LAMB: Second time around, Barack Obama won the state – first Democrat to win the state presidency since ‘64, Lyndon Johnson?.

DANIELS: That‘s correct.

LAMB: And he won by a point. You want by how big?

DANIELS: Eighteen.

LAMB: How did that happen? And why did he win?

DANIELS: I think President Obama earned his victory in our state. I mean he – first of all, he invested a ton of his own time and an incredible amount of money.

I think it helped in that we had a competitive primary. Indiana hadn‘t had one probably since Bobby Kennedy won in ‘68. And because we have a late primary, it‘s usually over.

But because of the unusual dynamics of the nomination context, we had a terrific primary. It was great, really. A lot of excitement. Finally, our state got paid some attention to.

So we had a little bit of a head start from all of that, and they never let up, and give them credit. It was a hard-earned, a hard-earned victory.

LAMB: The motorcycle?

DANIELS: Yes.

LAMB: How much do you use it?

DANIELS: Well, I‘m using it more and more. I mean I‘ve – I‘ve written them since I was a kid, but there was some – Cheri threw me off them for a while when the girls were little. But it‘s – it‘s something I enjoy.

And I‘ve – each year I‘ve sort of pressed it out there little further, you know expecting sooner or later someone would come along and say, ”You know hey you know this is not very gubernatorial.” But it hasn‘t happened. People seem to accept it, and it gives you a way to have a little fun on the job.

LAMB: What‘s the farthest you‘ve ridden since you‘ve been the governor and you take a security detail everywhere you go?

DANIELS: Oh, hundreds of miles. We‘ve done days you know where we might have multiple stops and write a couple hundred miles in between.

The security – I am a little problem for the security folks. They have not had to follow somebody into saloons and all the impromptu stops that we make, and let alone motorcycle travel. But they‘re – they‘ve – they‘ve put up with it pretty well I think.

LAMB: Here‘s another clip on something called cow bingo.

DANIELS: Yes.

LAMB: Let‘s watch.

(VIDEO BEGINS)

DANIELS: And we‘re all waiting expectantly for a cow to unload on – on the – the right bingo square. You know – you know about this? This is called cow pie bingo, and some lucky guy – and I hope it‘s me – wins five grand if – if a cow deposits on your square.

UNIDENTIFIED PARTICIPANT: What‘s your number?

DANIELS: Eight hundred and fourteen. I got 13 here. I got 12. Keep buying her tail. If it moves, let me know. Incidentally, who‘s the – who‘s the judge? What is it – what if it like falls on online somewhere, huh?

UNIDENTIFIED PARTICIPANT: Yes. It falls on the line ...

DANIELS: Yes? Is that a foul, or ...

UNIDENTIFIED PARTICIPANT: No way, no.

DANIELS: So the feet?

UNIDENTIFIED PARTICIPANT: No. You put out with a little foul.

UNIDENTIFIED PARTICIPANT: Then we weigh it.

DANIELS: Really?

UNIDENTIFIED PARTICIPANT: No way. The heaviest part wins.

UNIDENTIFIED PARTICIPANT: Oh, did it do it? It‘s going.

DANIELS: You mean we have a winner?

(VIDEO ENDS)

LAMB: Were you really asleep there?

DANIELS: Yes.

LAMB: You know how many ...

DANIELS: This is a great way to raise money for charity, by the way. It‘s low overhead.

LAMB: How many of those people that you‘re hanging around out there know that you‘ve got a degree from Princeton?

DANIELS: I don‘t know.

LAMB: And is it – is it work to be in that environment in Indiana?

DANIELS: Is it work?

LAMB: Compared to I mean you‘ve lived – you‘ve lived the high life. You‘ve been you know you‘ve been ...

DANIELS: Oh, it‘s a lot more – it‘s a lot more comfortable, a lot more. I know that this – this mode is very comfortable for me. I‘m – it‘s the one thing I enjoy most about the job.

People say you know, ”Do you like the job?” I usually say, ”I like the work and I can tolerate the life.” But there‘s one thing about the life I live, and that is particularly now that I do have this title temporarily, anywhere I go people do want to talk, and it means something to them if they spend a little time with them.

It‘s a wonderful gift to have just a few years. I‘ve had so many grown men, let‘s say, say, ”I‘ve never talked to anyone important before.” And you want to go, ”You know come on, Brian. It‘s just you and me.”

But then you stop and think, no. When he gets home or back to work, he can tell people. I don‘t care if he says, ”I told that SOB what I thought.” I mean it‘s a moment for him, and I like – I like doing it. And I know that not everyone would.

I mean staying overnight in people‘s houses? I‘ve had a lot of people say to me, ”How – I couldn‘t do that.” I enjoy it.

LAMB: Here‘s one of these reality shows talking to some good old boys.

DANIELS: OK.

(VIDEO BEGINS)

UNIDENTIFIED PARTICIPANT: You running for the governor?

DANIELS: Yes. Not till next year. I just worked for George – for George Bush for the last 2-1/2 years, so ...

UNIDENTIFIED PARTICIPANT: Poor guy. You see my sign here?

DANIELS: Where? Which one?

UNIDENTIFIED PARTICIPANT: Bush lied, the troops died, and the rich got richer with the tax cut.

DANIELS: Yes, well, who do you think would have done a little better? Would you like Gore over there? Would you like Gore in charge the last couple of years?

UNIDENTIFIED PARTICIPANT: Well, that‘s hypothetical, but that‘s who I voted for.

DANIELS: Well, it was pretty close.

UNIDENTIFIED PARTICIPANT: He won.

DANIELS: It could‘ve happened. No, he didn‘t win.

UNIDENTIFIED PARTICIPANT: Chandler is my name, David Chandler.

DANIELS: David, I‘m Mitch.

UNIDENTIFIED PARTICIPANT: I‘ll shake your hand, though.

DANIELS: Well, I‘ll shake your hand.

UNIDENTIFIED PARTICIPANT: I always like to…

DANIELS: Well, a man‘s entitled to his opinion. I respect your opinion.

UNIDENTIFIED PARTICIPANT: I‘m the Democrat precinct committeeman for our township.

DANIELS: Well, then, good. You know you‘re in there doing – you‘re in there doing what you‘re doing.

UNIDENTIFIED PARTICIPANT: I‘m doing what I‘m supposed to be doing.

DANIELS: That‘s all right. Listen, I like – I like people who get involved in it you know.

UNIDENTIFIED PARTICIPANT: I‘m tickled to death that you stopped, because if you hadn‘t stopped, I‘d have talked about you. Listen, if you get to be governor, I want you to remember this place.

DANIELS: I will remember this place.

(VIDEO ENDS)

DANIELS: I‘ve been back to that place several times.

LAMB: You have?

DANIELS: Oh, yes.

LAMB: Why?

DANIELS: Well, because I said I would and you know I kind of got ...

LAMB: Any of those good old boys vote for you?

DANIELS: Well, hard telling, but – but I‘ll tell you old David there became a recognizable figure around the state. I was asked about him many, many other places.

LAMB: The last thing I saw, 69 percent popular in the state of Indiana right now. Is that true?

DANIELS: Well, somebody counted that, yes.

LAMB: How can you resist all these people? I‘ve got a – here‘s a ”National Review” – big cover story, ”National Review.” The Blade, they call you here.

DANIELS: Isn‘t that the most hideous picture you ever saw in your life?

LAMB: And they‘re all talking about this business of running again you know for president. How can you resist it when you‘re popular in the state and have a surplus.

DANIELS: My hometown paper had somebody ask you know had I seen that inflicted I think. And I said, ”You know I‘ve been having trouble killing this presidential talk.” That – that picture will take care of it, yes. No one would vote for someone who looked like that.

Oh, I guess that‘s my story. I‘m sticking to it.

LAMB: One more. One more little video. Let‘s watch.

DANIELS: Yes. OK.

(VIDEO BEGINS)

UNIDENTIFIED PARTICIPANT: Those big tall tennis shoes…

DANIELS: Oh, those were – those were truly dorky. That was one time you went over the dork line. I mean...

UNIDENTIFIED PARTICIPANT: Dad goes over the dork line every day. He‘s officially cut off from this conversation. I don‘t – I think ...

DANIELS: That happens a lot.

(VIDEO ENDS)

LAMB: Who were they?

DANIELS: That‘s the apple of my eye, young Margaret Daniels, now just had her 23rd birthday, but that was a few years ago. I think she was with me – I think it was primary day possibly of – of ‘04. But you know that – something else a little different with us.

You almost never see Cheri or one of the girls with me. It‘s my job. That‘s what I do. We had discussion at the very beginning. I almost didn‘t run because Cheri had great misgivings. She likes private life, and she likes our privacy, and the family comes first with her.

And I came this close to not running for that reason. But I said, ”Look, honey. We don‘t have to do this like other people. I will never ask you, let alone pressure you, to take part in any event.” And I haven‘t. I‘ve kept that for six years.

And she is – when she does things of her own choosing, people just love her to death, because she so nonpolitical. She‘s the queen of the Indiana State Fair, basically, Brian. By the way she is the defending champion was removed in the cow milking contest and the watermelon seed spitting contest.

LAMB: And where did you meet her?

DANIELS: She was a young working girl when I was working for Mayor Lugar, and – and I went to Washington with things sort of up in the air, and after about a few months she came, gave me the ultimatum, and fortunately I surrendered.

LAMB: How many years have you been married?

DANIELS: Thirty-one.

LAMB: Four daughters?

DANIELS: Yes.

LAMB: What have they all done? How old are they?

DANIELS: Twenty-three, 25, 27, 29 now. And they are – three are in Indiana. I have three working girls there, and young Margaret that you just saw a little slice of is just finishing her first year working in New York City in what‘s left of the investment banking world.

LAMB: You gave a speech on May 9th at Butler University. Where is Butler and why did you give a speech, because you talk a lot about Butler being an exciting place for you?

DANIELS: Butler‘s a great school. It‘s very close to the governor‘s residence. It‘s on the north side of Indianapolis and a fine, fine academic school and a great basketball tradition.

When I was a kid about the only recreation we could afford, I told that crowd, is my days you know you could buy a season ticket for almost nothing. So I‘ve been going to watch their basketball teams for a long time.

I don‘t go looking for commencement speeches, because I find them – I find them challenging to say something innovative at, but I couldn‘t say no to Butler.

LAMB: It‘s – one of the things you had talked about earlier is you talked about Tony Hinkle, who was – who was he?

DANIELS: Tony Hinkle was the legendary the multi-sport coach at Butler for decades, but most associated with the basketball program.

LAMB: Talk about his philosophy ”It comprised of simple and timeless principles: humility, unity and thankfulness.” Did you know that before you gave the speech?

DANIELS: There was an article in the – in the Indianapolis paper this spring. I – I sort of knew that there was a sort of a code around the program, but there was an interesting article, and the minute I saw at I thought, ”Oh.” It was called the Butler way. That‘s the way that it was referred to. And I thought, ”Oh, that would be a good point of departure for the speech.”

LAMB: Here‘s some of what you said. It‘s odd that I read to you what you said, but I want to get it on the record, and then if you can react.

”As a generation you are off to an excellent start. You have taken the first savvy step on the road to distinction, which is to follow a weak act. I wish I could claim otherwise, but we baby boomers are likely to be remembered by history for our numbers and little else – at the least little else that is admirable.”

Where did that come from?

DANIELS: Oh it‘s just a conviction of mine I may have overstated a little bit of a little bit for effect, but – by the way, if one reads the whole speech, there are many, many qualifiers here about the hazards of generalization and all the rest, but ...

LAMB: But something moved you to do this.

DANIELS: Yes. I – I see a contrast between the – the – frankly, the – the values that have made America what it is, the values somewhat summed up in the Butler way, and – and those that too often have dominated American life during what we think of as the baby boom era.

And – and I – I illustrated it here, but you know I don‘t believe as a – we have done as well as they could have. For instance, in the debt we‘re passing on to these young people is a very, very – is going to be a very, very difficult thing for them to – to manage.

And we – we could have shown more political maturity and the way we financed the entitlements that we‘ve – that we‘ve committed ourselves to and that sort of thing.

So I was urging them to be less self-absorbed, think more about others, certainly think more about the future, less about today. And it – it may have been a little too strong a judgment, but I – it is in general I think a point I believe in.

LAMB: ”We were pampered, meaning the baby boomers – we were pampered in ways no children in human history would recognize. With minor exceptions, we have lived in blissfully fortunate times.

The numbers of us who perished in plagues and famine or in combat were tiny in comparison to previous generations of Americans, to say nothing of humanity elsewhere.

All our lives, it has been about us. We were the ‘Me Generation.‘ We wore T-shirts that said, ‘If it feels good, do it.‘ The year of my high school commencement a hit song featured the immortal lyric, ‘Sha-la-la-la-la, live for today.‘

As a group we have been self-centered, self-absorbed, self-indulgent, and all too often just plain selfish. Our current baby boomer president has written two eloquent erudite books, both about himself.”

Expand on that. How much of that is – does that resemble you?

DANIELS: Well, I‘ve probably been guilty from time to time. The you know which of us hasn‘t? I guess I‘m – I‘m just saying with – with all the caveats that generalization should always come equipped with, that I do believe that the next generation ought to aspire to do a little better than this – in this regard and to be more mindful of the future.

I mean just look at where we just come through, Brian, the overspending and over consumption, the under saving. Pretty obviously it‘s not – has not worked out well for a lot of individuals, and certainly not for the – the overall economy. And I think there‘s a lesson in that.

And I was simply trying to say try to – try to learn from those things where we, your elders, might‘ve come up a little short.

LAMB: Did you see what Rich Jackson, the editor of the ”Porter County Post Tribune,” said about this speech?

DANIELS: No.

LAMB: He says, ”As he launched his presidential bid” – that‘s the headline – message, you suck. And he‘s talking about, well, he says, ”Mind you, Mitch was talking to generation of college students who had their college education paid for by what the good governor deems the biggest heap of dung generation ever to traipse American sod.”

He goes on to say some kinder things. Your reaction?

DANIELS: Well, he‘s entitled to his point of view. I mean there are a lot of – an awful lot of people that reacted very positively to it, too.

That – that‘s why I – next year I‘d probably better just discipline myself not to take any commencements, because unless you get up – unless you want to get up and – and spout platitudes, it‘s – there‘s always the risk that – that you‘ll say something that was a little too original for your own good.

LAMB: When did you know that this had struck a chord, because there‘s lots of copy out there on this?

DANIELS: Well, when it started showing up in magazines and ricocheting around the Internet and elsewhere, but ...

LAMB: Did you write it yourself?

DANIELS: Yes. Can‘t blame it on anybody else. I write them all.

LAMB: ”As a generation we did tend to live for today. We have spent more and save less than any previous Americans. Year after year regardless which party we picked to lead the country, we ran up deficits that have multiplied the debt you and your children will be paying off for your entire working lives.

Far more burdensome to you mathematically, we devoted ourselves increasing levels of Social Security pensions and Medicare health care benefits. We‘ve never summoned the political maturity to put those programs on anything resembling a sound actuarial footing.”

To get back to what I was asking earlier, why is it that George W. Bush, who was supposed to be a conservative, I guess – I mean you‘d tell us if he wasn‘t – allowed his Republican Congress to run up the numbers? Why he – why didn‘t he veto?

DANIELS: Well, I mean it‘s a question best – best put to him. I would just say with so many factors at play, I‘m always – tend to be charitable and sympathetic toward whoever‘s president. They have multiple pressures on them all the time.

For instance, far and away the president‘s first job, and that president‘s first priority, was the defense of America and the protection against another 9/11 or something worse.

And I think that many times they probably chose not to have fights on other issues where he might have in pursuit of trying to keep his main objective intact.

LAMB: By the way, I‘ll never ask you again, but you never told us why on the time change, the daylight savings thing. Why was that such a big issue?

DANIELS: I think I‘d best induct you on it.

LAMB: What did – what did you do?

DANIELS: Well, well, we just got in step with the rest of America. We were the last state except one, I guess, that never went – didn‘t change clocks when the rest did.

And it wasn‘t the biggest deal, but it was – it played havoc with certain businesses. I mean increasingly businesses are wired together, tied together. They‘re working across national and even global markets.

And it was a problem, and it was not without significant cost. The people said, ”What the heck time is it in Indiana this month?” Broadcasting is the perfect example. You have your computers that I had people say, ”Look, my biggest customer has to reprogram his computer twice a year just to deal with me. One day he‘s going to say, ‘I want to work with somebody in Ohio.‘”

So, but it had a lot of symbolic importance to – to a lot of people. And to some folks I think it sort of summed up the fact that this is going to be an era of change, and changes of little difficult for some people but ...

LAMB: How many counties still are on Central Time?

DANIELS: Oh, about 10, the two corners – the corner around Chicago, which basically has to be with Chicago, and the southwest corner. All the rest is Eastern. That basically didn‘t change.

What did change was that now the eastern part does stay in sync – well, we all stay in sync.

LAMB: Another paragraph from your speech.

”Our irresponsibility went well beyond the financial realm. Our parents formed families and kept them intact even though difficulty – even through difficulty for the sake of the kids. To us parental happiness came first. We often divorced at first – at the first unpleasantness and increasingly just gave birth to children without the nuisance of marriage. Commitment cramps one‘s style, don‘t you know?”

What‘s different about your four daughters that – than the boomer generation?

DANIELS: Well, we‘ll have to see how they choose to live their lives.

LAMB: What do you see in them that‘s different?

DANIELS: Well, I see a lot of their mother, and that‘s the best thing I can tell you about them. They‘ll make their own choices, and I‘ll support them whatever those are.

I – I hope that the two, soon to be three, marriages that have begun in our family will be – will last for life, or certainly as long as there are any children.

You know I have enormous admiration and sympathy for single parents. I think I told you how hard we‘ve worked on things like child support. But it just remains an empirical fact. This isn‘t some sort of moral judgment.

You could make it that, but it‘s just an empirical fact that the children of America and – and so many of the problems – poverty in America, every social pathology that tears at your heart would be so much less a problem if we did not – if we had much higher rates of intact families.

And so this isn‘t something you can legislate. This isn‘t something you should ever scold people about. But you can hope and – and encourage people to be very, very careful about the – about this, and especially when children become involved, to please to try to think about placing them ahead of your own happiness, if you possibly can.

LAMB: What are you going to say when you change your mind about running for president after we have all this stuff on tape?

DANIELS: Well, Brian, like I say, if it – I‘ve been painting myself in. You helped me put – put another coat of paint down today. You know in another old song from our era, ”It ain‘t me, Babe, you‘re looking for.”

But I hope that maybe I – I can be of some use. Our party needs, obviously, a lot of work. It needs to think itself, look in it inwardly and think about how it can speak more meaningfully to the problems of today and to the – and to the Americans of today, the young people of today specifically.

Maybe I can be a little part of that. You don‘t have to be a candidate to do that. I can tell you this. In our state Republicans we always say are the party of purpose.

We are the party that for five years now and every year has made change after change after change. We have brought a host of improvements and reforms that we haven‘t talked about here.

And it just says to me that being the sort of – of political organization that really stands for and earns the right to – to represent people is not the province of one party or the other.

And so maybe I can help a little bit, but not – not being the front man.

LAMB: Governor Mitch Daniels, well, thank you, but we also want to end with just another one of these little reality clips that are from your earlier campaigns.

(VIDEO BEGINS)

DANIELS: You‘re part of the company here?

BOB : I just got hired today, my first day on the job.

DANIELS: You just got hired today?

BOB : Yes, sir.

DANIELS: Fantastic. Good for you. What did you get hired to do?

BOB : Accountant.

DANIELS: Accountant?

UNIDENTIFIED PARTICIPANT: Yes, sir.

DANIELS: Do you know these guys?

He just got hired today.

This is Bob, yes.

UNIDENTIFIED PARTICIPANT: Bob.

DANIELS: Meet Bob. This is fantastic. This is your new co-worker.

UNIDENTIFIED PARTICIPANT: Nice to meet you.

UNIDENTIFIED PARTICIPANT: I‘d like to shake your hand. Everybody would like to get a picture.

DANIELS: Absolutely. After you meet Bob.

UNIDENTIFIED PARTICIPANT: Hello, Bob.

DANIELS: This is – well, it‘s his first day.

You are?

LATOYA : LaToya .

DANIELS: LaToya , very good seeing you. So they didn‘t take your picture. Let‘s scoot over. Now, right here.

UNIDENTIFIED PARTICIPANT: I‘ve been had.

DANIELS: Here he is. Here, I‘ll tell you what. You sit still. I‘ll come back here. And take good care of my new friend, Bob, wherever Bob is.

UNIDENTIFIED PARTICIPANT: Bob Bennett .

DANIELS: I guess Bob went to work. I don‘t know. I don‘t see him here.

Come here. They all want to meet you. Come here a minute.

Ladies and gentlemen, this is Bob.

UNIDENTIFIED PARTICIPANTS: Hey, Bob.

DANIELS: See?

END