Mitch Daniels: Americans ought to be scared

A lot of Republicans wanted Indiana's popular Governor Mitch Daniels to run for President. But he decided NOT to. Daniels sat down with CBS News chief White House correspondent Norah O'Donnell for some Questions and Answers:

Well, folks, here we go again ...

With the 2012 presidential election just 14 months away, the Republican challengers are off and running.

With unemployment above 9% and the economy reeling, they're lining up for a shot at the White House, which they believe is up for grabs.

But as the candidates scuffle for attention, there's one would-be contender who turned heads and made headlines ... by choosing not to run: Indiana's popular governor, Mitch Daniels.

"You weren't teasing people that you were going to run for president, were you?" asked O'Donnell.

"Honestly, no. No, I wasn't," Daniels said. "And I think I irritated a lot more people because I didn't go for it. But I did look at it seriously, eventually."

And why not? Daniels is a rising star, a former adviser to President Reagan, and President George W. Bush's director of the Office of Management and Budget.

He was elected governor in 2004, and turned around a struggling economy.

"The state was broke when we got here, and we fixed that in a great, big way," Daniels said. "We have re-shaped our economy here to be, by all accounts, one of the most attractive to investment and growth and opportunity in the country. We've built roads at record rates, and then lowered property taxes to the lowest in the country. We made government work well."

And he did it by slashing government spending and balancing the budget.

In Indiana, Daniels said, "We have fewer state employees than the state did in 1976. You'd be amazed how much government you'll never miss!" he laughed.

Daniels seemed the perfect presidential candidate for these deficit-obsessed times.

But when party leaders came calling, his response was stunning.

"I remember saying to them verbally, 'I love my country. I love my family more.'"

It was a remarkable concession for an ambitious public servant.

Daniels and his wife, Cheri, have four daughters. When they sat down to discuss a presidential run, as the governor puts it, the "women's caucus" won.

"Well, I think our family was really concerned about the lack of privacy," Cheri Daniels told O'Donnell. "And that it's not just for four years or eight years, but for the rest of your life. Mitch has given 12 years to public service. And, you know, now it was our turn to get him back."

"I said to somebody, 'There's one sentence for which a father has no reply,' which is, 'Daddy, please don't,'" Gov. Daniels said.

"They really did not want you to run for President?" O'Donnell asked.

"That appeared to be the consensus!" he replied.

"You seem a little emotional about that; do you feel caught between being a father, and a husband, and pursuing something like a higher office, where you feel like you could really make a difference?" asked O'Donnell.

"No. I mean, I'm not complaining about a thing. I'm the luckiest guy I know of," he said. "And, you know, you can't have everything in life. And sometimes you have to choose."

But political insiders whispered there was another reason: Daniels wasn't running, they said, because he and his wife would face difficult questions about an intensely private episode in their marriage.

"Well, what happened was a happy ending. And I always say if you love happy endings, you'll love our story," said Daniels.

After 15 years of marriage and four daughters, they divorced in 1993. Cheri moved out, briefly re-married, divorced her second husband ... and then re-married Daniels in 1997.

"Cheri, people said that when you guys got divorced, the suggestion out there was that you had abandoned your four girls," said O'Donnell. "Was that hurtful, when people wrote that?"

"Well, it was, because it wasn't true," Cheri Daniels replied. "I didn't move to California. I lived within, what, a quarter-of-a-mile of the house, and so that simply didn't happen."

They insist there are no dark secrets preventing him from running.

Either way, Daniels isn't a candidate, but that doesn't mean he's going quietly - the roar of his motorcycle not withstanding.

Not running, he says, has its advantages ... Among them? He's free to speak his mind about our nation's problems.

O'Donnell asked Daniels what he thought of Texas Gov. Rick Perry calling Social Security a "Ponzi scheme."

"As far as it goes he's not the first" to call it that, he replied. "As far as it goes, that's not inaccurate. A Ponzi scheme is something where you take money from people today they may think they're investing and it's being given out to the back door to somebody else."

"You agree with Governor Perry?" O'Donnell said.

Daniels doesn't shy away from controversy. In Indiana he's been called anti-union for restricting collective bargaining.

He passed a law withdrawing funds for abortion providers, and he angered immigration rights groups which fining employers who hire illegal immigrants.

"What matters is not winning the next election. It is acting while there's still time to save our republic," he said.

America, he says, has some tough choices to make. He discusses our problems and offers some possible solutions in a new book, "Keeping the Republic" (Sentinel).

He said he wrote the book because he was "alarmed about the country."

His assessment is sobering: America is on the brink of becoming a failed nation.

"I read this book and I was scared," said O'Donnell. "Is that what you meant it to do, to scare people?"

"Yes," he replied. "People ought to be scared. If we don't make changes, we will ruin the American project. By that, I mean the dream that has attracted millions to these shores - that a person can start with nothing and rise to the top."

He's worried that our staggering debt, if un-checked, could signal the beginning of America's decline.

"There is a long, clear history of nations rising to greatness and leadership, and then falling. And interestingly, I quote an historian who says, 'It always starts with the money.' You know, first they spend themselves into a corner, borrow themselves into a corner. And the rest of the fall, including military defeat sometimes, flows from that."

Daniels says we urgently need to balance our nation's books - as he did in Indiana, by taking big government OUT of the equation and letting free enterprise take over.

"The heart of American society is the private sector," he said. "Government should be there not to dominate it, to dictate to it, make all the decisions, but to do those things we have to do together to make private life flourish."

Sit in on a few meetings with him, and his focus on the bottom-line is hard to miss, whether he's tackling an environmental project, welfare reform, or child protection.

For now, he'll continue working on Indiana's problems. And as for what the future may hold? While he won't be our next president, who knows what the next phone call may bring?

"I always say that one day the phone rings, and something interesting that seems useful is on the other end," he said.

"To be Vice President?" asked O'Donnell.

"That wasn't the call I was hoping for!" he laughed.

"But you wouldn't rule that out?"

"Oh, I don't ... you don't rule anything out, I suppose," Daniels said.

For more info:

• "Keeping the Republic: Saving America by Trusting Americans" (Sentinel)