Sitting at his desk in Indiana’s grand turn-of-the-century state house, Mitch Daniels’ eyes light up momentarily in mid-sentence, like a proud father recalling the deeds of his children.

“I just found out a few minutes ago, by the way, that in nominal dollars, the payroll of the state of Indiana is lower today than it was seven years ago,” says Mr Daniels, the politician Barack Obama could face in the 2012 presidential poll.

The Indiana governor’s record in successful budget management has elevated him to a national political figure at a time when the country is more fiscally focused than it has been in a generation.

It is also why many conservatives are urging Mr Daniels to throw his hat into the Republican ring to win the party’s nomination to challenge Mr Obama next year.

George W. Bush, his former boss, is one of many Republican grandees offering private counsel to Mr Daniels as he mulls a bid. Mr Bush’s wife, Laura, has also talked the issue through with Mr Daniels’ wife, Cheri.

“A lot of people are coming around. There were two this morning and there will be more tonight,” he says.

For a party despairing over beating the president, despite the weak economy and high unemployment, Mr Daniels offers a credible alternative with experience in business as well as in budgets.

In the White House, he advised Ronald Reagan and was Mr Bush’s first budget director. As a senior executive in Eli Lilly, the global pharmaceutical company, he ran its defence of its profitable anti-depressant, Prozac, against a campaign by the Church of Scientology.

He was elected as Indiana governor in 2004 and overwhelmingly re-elected, along with sizeable majorities in the legislature in 2008, even as Mr Obama swept the usually conservative state in the presidential poll.

Mr Daniels has been described as someone whose “very lack of charisma becomes charismatic”. So frequent are cracks about his low-key personality that he has started joking about it himself.

At a speech in Washington, Mr Daniels listed the adjectives used to describe him in the media: “small, stiff, short, pale, unimposing, unassuming, uninspiring, understated, accountant-like, non-telegenic, boring, balding, blunt, nerdy, wooden, wonky, puny and pint-sized”.

In a Republican party that has shifted to the right, however, it is Mr Daniels’ plain-spoken independence that might be his biggest problem.

In office, he has turned a deficit into a surplus, cushioning the state in the financial crisis, and introduced pay-for-performance for teachers, vouchers for schools and efficiency benchmarks.

He has attuned to the symbolism of improving government services, most famously reducing the time to renew a driving licence to seven minutes.

“It is important because it is one service that is encountered by literally every citizen – fixing a service like that helps build confidence in the government,” he says.

But Mr Daniels has annoyed some Republicans by refusing to bow to the party’s prevailing breezes on other issues.

In an interview last year, Mr Daniels irritated social conservatives by calling for a truce in the culture wars, saying “we’re going to just have to agree to get along for a little” and focus on the economy instead.

“I understand the passion of people,” he says. “I am only suggesting that for a time we deal with the [economic] threat that menaces us all.”

He does not back away from his comment, but earlier this month he signed a bill banning state funding for Planned Parenthood, an abortion provider, a gesture that might appease his critics.

Mr Daniels has also refused to back a no-new-taxes pledge that most Republicans in Congress have signed under pressure from Grover Norquist, the powerful head of Americans for Tax Reform.

Mr Daniels praises the budget proposal from the Republican chairman of the house budget committee, Paul Ryan, who caused an uproar with plans to revamp health care for seniors. But a Daniels budget would go further by tackling two areas left out of the Ryan review: defence spending and social security.

If he mildly chastises Mr Ryan, he is scathing about the Democrats, who have leapt on the threat to Medicare and Social Security to claw back voters who deserted them in the past two years.

“The worst enemies of Social Security and Medicare are the people who say don’t touch it. They are going to kill those programs. They are headed for a certain arithmetic catastrophe.”

For all his passion, Mr Daniels still comes across as someone being dragged reluctantly into the Republican race. He says he will decide by the end of the month. “If the nation were in reasonable shape during my lifetime,” he says “I wouldn’t be thinking about it now.”

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