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Chief of Budget Office Not Called 'The Blade' for Nothing

Thursday, 17 May 2001 12:00 AM

Daniels was called to Washington from his post as senior vice president of Eli Lilly & Co., but he’s an old Washington hand, having cut his teeth in government as political director in the Reagan White House.

In a recent interview with Business Week magazine he explained why he left his family back in Indiana and spends two weekends a month at home: "I always say it's probably better for a budget director to live where people still think a trillion dollars is a lot of money,” he said, providing a glimpse of his down-to-earth view of Government spending.

New to his job, he’s already had a huge impact on the federal budget, having pitched in to keep increases in the government’s discretionary spending around 5 percent rather than last year’s 8 percent increase, deflecting Democrat demands for higher spending on social programs with a shrug of the shoulder.

And when Senate Minority Leader Tom Daschle, D-S.D., bragged that Congress’s decision to fund only $1.25 trillion of the president's $1.6 trillion tax cut was a big win for his side, which had adamantly opposed anything but the most minuscule tax cut, he got slashed by that sharp Daniels tongue: "There are some jobs - and I guess Senator Daschle's is one - that require you to say silly things from time to time," he told CNN.

Among Daniel’s priorities at OMB, according to Business Week, are getting ready for the Baby Boomer retirement wave by boosting Social Security returns, dealing with the explosion in Medicare costs, and taming Congress’s gluttonous appetite for feeding lavishly at the federal trough.

He also plans to help the president keep his promise to roll back regulation of business by applying stringent cost-benefit analysis to proposed rules.

"These are very ambitious goals," Daniels told Business Week. "One of the reasons I went to work for President Bush is that he was prepared to go after big game."

Daniels said he had "an immensely important mission” to choke off the flow of new regulations. He’s been going over a torrent of last-minute Clinton regulations, many of them seemingly designed to make Bush look bad if he chose to overturn them. "The place was booby-trapped," says Daniels.

"Regulatory review is an immensely important mission,” he said in his interview with BusinessWeek. "By some estimates, federal regulation imposes three quarters of a trillion dollars of taxes on the economy each year. That's a third as big as the budget. So we want to have the best staff of the regulatory office scrutinize new and existing regulations as carefully and professionally as we can.”

He is determined to use OMB to stymie any proposed regulations that could stifle economic growth. He named as his chief antiregulatory cop, John D. Graham, director of the Center for Risk Analysis at the Harvard University School of Public Health, who BusinessWeek notes is a controversial choice because critics think his Harvard center provides "rent-a-scientist" testimony on behalf of business interests. More important, Graham wants to roll back health, safety and environmental safeguards, critics charge.

The magazine says that Daniels "dreams about reforming entitlement programs. But prospects are dicey, at best. The stock market meltdown has pushed Bush's plans for private Social Security accounts off into the future. And Medicare, which the OMB chief says is ‘headed for Niagara Falls, financially,’ could prove tough to revamp. Democrats want a costly new prescription-drug benefit for seniors added to the program, but the White House fears that it won't be able to push through structural reforms if it agrees to this goodie up front.”

"I think that a drug benefit, poorly constructed - characteristic of a separate, free-floating drug benefit - is likely to cost a terrifying amount of money. That alone may sober people up,” he added.

Asked about the administration’s policy on privacy issues, Daniels said: "Privacy will be a very important theme of this administration. The president is very personally committed to this.

"In fact, a person who has been with him a long time said to me a couple of weeks ago that one area where [Bush] is consistently underestimated is in the intensity of his commitment and interest in personal privacy. I want to make sure that, particularly in the regulatory area, we have accountability and we are alert to opportunities to extend privacy protections.”

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Daniels was called to Washington from his post as senior vice president of Eli Lilly & Co., but he's an old Washington hand, having cut his teeth in governmentas political director in the Reagan White House. In a recent interview with Business Week magazine he explained...
Thursday, 17 May 2001 12:00 AM
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