OMB Director Daniels Resigns . . . to Run For Indiana Governor?

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U.S. Office of Management and Budget (OMB) Director Mitchell E. Daniels Jr., announced yesterday that he will step down from his post within the next 30 days. He is expected to soon launch a bid for governor of his home state of Indiana.

Nicknamed "the Blade" by President Bush for his budget-cutting penchant, Daniels was popular with the President and Republicans, but mocked by Democrats who clashed constantly with the diminutive, spirited budget director. Sen. Robert Byrd of West Virginia, the ranking Democrat on the Senate Appropriations Committee, called him “big mouth” and "Little Caesar."

It is expected that Daniels, 54, a former aide to Ronald Reagan, will be replaced by Bush's Texas chief of staff and longtime friend, Clay Johnson, who was recently appointed to be Daniel's deputy.

"The president appreciates his service to the nation," White House Spokesman Ari Fleischer said of Daniels. "The president will miss him."

Democrats were less friendly. "By OMB's own estimates, Daniels has presided over an era which has seen a projected $5.6 trillion [surplus] in 2001 turn into a $2.2 trillion projected deficit today," said David Sirota, Democratic spokesman for the House Appropriations Committee. "In short, Mitch Daniels is the clown that turned our fiscal house upside down. Let us pray that the era of deficit creation and fiscal destruction are over."

By all accounts, Daniels appeared to enjoy the battles with lawmakers, once quipping that their motto is, "Don't just stand there, spend something."

With this departure, most of Bush's economic team has turned over. But unlike the departures of Treasury secretary Paul H. O'Neill and economic adviser Lawrence B. Lindsey, Daniel's decision appears to be entirely voluntary.

A former Eli Lilly & Co. executive, Daniels has been flying home on weekends to Indiana where his wife and daughters live. There is continued speculation that he will challenge former congressman and 2000 nominee David McIntosh for the GOP Indiana gubernatorial nomination. Democrat Frank L. O'Bannon is retiring.

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