Daniels outlines fix for national debt in new book

Massive entitlement spending reform is needed to avert a national economic disaster akin to the fall of the Roman Empire, Indiana Gov. Mitch Daniels writes in his new book, which comes out Tuesday.

Daniels writes that American leaders will have to increase the eligibility age for Social Security and Medicare and cut benefits for the wealthy. They should also consider replacing the modern welfare system with direct cash subsidies via a "negative income tax," Daniels writes.

The former White House budget director writes in "Keeping the Republic: Saving Americans by Trusting Americans" that both Democrats and Republicans are responsible for building the national debt to monstrous proportions. Although he fills the book mostly with examples of President Barack Obama and Congressional Democrats increasing spending and establishing "shock and awe statism."

When his friends and colleagues were lobbying him last year to write about his personal experiences or his time running the state, he said he wanted to focus on something bigger. Specifically the national debt and unfunded mandates, or the new "Red Menace" as he calls it.

"I said if I was going to write a book, I'd write about what was bothering me about the country and about our national politics," he said Monday in a phone interview from New York City.

The book is not about running for president, he said, which should be obvious from controversial ideas he pushes like ending Social Security for the wealthy and implementing a "negative income tax" which dispatches with the modern welfare system in favor of direct cash subsidies for the poor.

Daniels opted against running for president in May, saying his wife and four girls vetoed a campaign — although he almost slammed the door on the idea with this book.

When he was circulating an outline of his book among friends last year, he intended to open with the statement that he was not running for president.

"The first sentence was 'So many books are written because the author intends to run for the president of the United States. This one is written specifically because I don't,'" he said. "That was going to be the first sentence of the book, but then they talked me out of it."

His goal is to have some of the candidates already in the race adopt his ideas and run with them, he said.

Throughout the book, Daniels likens Social Security to a Ponzi scheme. "If old Carlo (Ponzi) were around today, he'd have made an ideal Social Security commissioner," Daniels writes.

Texas Gov. Rick Perry has gotten into trouble nationally for calling the erstwhile "Third Rail" of American politics to a Ponzi scheme, but Republican opposition researchers have also dug up instances of MSNBC host Chris Matthews and New York Times columnist Paul Krugman making the same comparison.

Daniels said Monday that Perry stopped short in explaining himself and should continue on by saying the results of changing the program will not be disastrous and that seniors already guaranteed benefits will receive the same levels.

The national debate has improved some since he began writing the book last fall, he said. The establishment of the Congressional deficit reduction committee gives him hope that more politicians are taking the national debt seriously.

But the spending reductions the committee are considering are still a fraction of what needs to be done to avert a national catastrophe, Daniels said.