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In his new book, Keeping the Republic (Sentinel HC), Indiana governor Mitch Daniels argues that the United States thrives most when the government cuts taxes and empowers people. On a more private level, Daniels, who serves as an elder at Tabernacle Presbyterian (USA) Church in Indianapolis, acknowledges that his faith is quieter. On a public level, he was involved in helping found the Oaks Academy, an inner-city Christian school. "As a believer, I always felt that the God I know was larger than politics," Daniels said before the 2008 election. "I'm always happy when people of faith decide that they want to be involved in public activity, but it should never distract us from what's primary, from the mission of saving souls." Online editor Sarah Pulliam Bailey spoke with Daniels about fiscal responsibility, whether he had a conversion experience, and how faith played a role in his decision not to run for president.

What drives you to focus on fiscal responsibility?

Much bigger, longer, more scholarly books have been written about debt and how it can ruin a country. That is the immediate threat to the America we've known; it's the symptom of other problems. The book tries to say that other things are involved in repairing our standard of living or even restoring what is shaky right now, and that is the American sense of optimism that tomorrow will be better than today, which has always driven progress in this country. Our free institutions and self-governance are being tested. Erskine Bowles, who co-chaired that debt commission a year ago [with Alan Simpson], has been going around saying this is the most predictable crisis we've ever faced. He means that if you just look at the arithmetic and if we don't do something significant, we will have a much worse situation even than today. But this was predictable in a second, larger sense. As long as the idea of government "by the people" has been around, cynics and skeptics have said that it won't work and sooner or later you'll need a tyrant. People make wrong choices, politicians will promise more than can be delivered and one day the system will go tilt.

How do you pitch these kinds of ideas to a religious audience? Do you see it as a religious and/or moral issue?

I'm very much for the latter. What kind of people will we be? We need to first believe that people can and should be permitted and enabled to make their own decisions in life—where their kids go to school, what kind of health insurance to have, what kind of credit card to have, what kind of light bulb to buy. And this zone of personal dignity and autonomy has been slowly whittled away. Part of reconstructing America and having a successful economy is citizens who do take responsibility and insist on it in their own lives. Every time I argue for a policy, I'm looking for the one that gives people the most leeway to make their own decisions. I don't dwell on it in the book, but where does that dignity come from? Because we're all creatures of God, endowed with inalienable rights—by whom? By our Creator. To that extent, yes of course, there's a very strong moral component to the argument and for the solution.

Some have been concerned by your idea to have a truce on social issues until we get our fiscal house in order. Do you still stand by that?

Yeah, I do, but first of all, I think many people misunderstood it. I talk about the whole spectrum, including gender and race and other arguments that I think are secondary right now. TheWall Street Journal took a poll last summer and they asked that question. The number of Republican primary voters who agreed with my suggestion was 65 percent. All that means to me is that most people see the common sense in trying to bring folks together right now. It'll be a long time before everybody agrees, let's say, with my view about protecting unborn life. We don't have a long time to deal with the threat that we're facing. So all I was saying was, let's try to get people unified, if we can, to address the immediate danger that really, left unaddressed, will crush everything that we hold dear.

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Q & A: Mitch Daniels on the Economy, His Quiet Faith, and a Social ...