- How to fix the Republican Party, education, and the national debt, this week on "Firing Line".

[light music] He was an avid motorcyclist and a two-term Governor of Indiana.

- I, Mitchell E. Daniels Jr. solemnly swear.

- [Margaret] Mitch Daniels balanced the state's budget year after year.

- Change just won and won big in the state of Indiana!

[crowd applauding] [crowd cheering] - [Margaret] He was re-elected with more votes than any governor in Indiana's history.

Daniels then went on to serve as the president of Purdue University, where he didn't raise tuition for a decade.

He's a pragmatic Republican and a fiscal conservative who was tapped to rebut President Obama's 2012 State of the Union Address.

- The status of "loyal opposition" imposes on those out of power some serious responsibilities.

- [Crowd] Run, Mitch, run!

Run, Mitch, run!

- [Margaret] But so far, Daniels has resisted calls that he run for President, or the Senate.

- [Reporter] You helped lead the efforts to overturn the 2020 election results- - [Crowd] No!

- [Margaret] Amidst America's fractured politics.

- Shut up!

- [Margaret] And with political discourse at a low.

- [Protestors] You're the terrorist!

- From the river to the sea!

- [Protestors] From the river to the sea!

- [Margaret] What does former Governor Mitch Daniels say now?

- [Narrator] "Firing Line" with Margaret Hoover is made possible in part by: Robert Granieri, Vanessa and Henry Cornell, The Fairweather Foundation, The Tepper Foundation, The Asness Family Foundation, The McKenna Family Foundation, Charles R. Schwab, and by The Rosalind P. Walter Foundation and Damon Button.

Corporate funding is provided by: Stephens Inc. - Governor Mitch Daniels, welcome back to "Firing Line".

- A treat to be here.

Thanks for having me.

- When you gave the Republican response to the State of the Union in 2012, you denounced divisiveness.

You even had a few flattering words for President Obama.

What would happen if you gave the exact same version of that address in today's Republican Party?

- It probably wouldn't be as well-received as it was back then.

I was raised to, in a tradition of the loyal opposition in which you might disagree very strenuously in the party out of power, but that you owed, first of all, some respect to the occupant of that office, or any office, and to our institutions.

If anybody stuck around at the end of that, whatever it was, seven or eight minutes, they were under no illusion that I was anything but an opponent of the administration's policies.

But I tried to do it in a way that I thought was consistent with our traditions.

And I hope one day will be again.

- Well, those traditions included things that Republicans and the modern American conservative movement had stood for for quite some time: lowering taxes, reforming education, balancing the budget.

- I don't think anyone who looked objectively would find our time in that job as anything but staunchly what we call conservative and pro freedom.

But there's always the question of how you get there.

We had at that time a highly competitive state.

Half of our eight years there was a Democratic Speaker of the House and majority.

And so, it just seemed to me practical to try to handle that job in a way that brought people together.

I used to say to our folks all the time, "We're here to make big change.

We're not here to shoot BBs, you know.

We're going for big game."

So if you're interested in results, not just, you know, a temporarily satisfying Tweet that you launch at somebody, then I think you're obligated to think about ways you might persuade, attract, and certainly not drive away people of good will who might come to agree with you about the change you want to make.

- Is there room for that brand of conservatism in the Republican Party anymore?

- I think there could be again.

You know, I don't think it's irreversible that our parties remain captured by their edges.

Ultimately, political parties exist, to win elections and to capture the middle.

And that incentive hasn't gone away.

- I want to get to a little bit of the topics that have happened this week.

The Republican conference was unable to agree on a new speaker for the last three weeks.

What message does it send?

- That they're more interested in internecine politics, personal advantage and publicity than they are in building a better America.

And it's not happening at a quiet time, to say the very least.

You know, this country's facing dangers, you don't need me to tell you, that are as large as any we've seen in a very long time.

Many people wiser than I am will say the biggest danger since World War II.

So this is no time to show the rest of the world, the leading country can't even get the furniture in the right place in order to sit down and act.

- You have been a fiscal hawk for many, many years.

And you've been upfront with the public that entitlement programs like Social Security and Medicare are simply unsustainable without significant reforms.

And you wrote in 2021, even, in a "Washington Post" column, that we had actually now passed the point of no return in terms of being able to make fundamental changes to these programs while still being fair to the people to whom we have made these promises.

What is the real truth about what the future of Social Security and Medicare look like right now?

- I'll start with an admission.

Maybe a dozen years ago, I wrote a book full of optimism, about the problem we were building for the future, about the fact we were borrowing, even then, enormous amounts of money.

And I thought if we talked about it, we could work our way through this.

But a lot of time has passed since then.

We not only haven't acted against those problems, we've made them worse.

We've had two presidents who made them worse, not better.

We have another who has pledged himself to the same.

- They've been Republicans and Democrats.

- That's correct.

And so I don't like facing up to this, but we have not shown ourselves to be the sort of self-governing people who make a grown-up decision.

And one day I think history will judge harshly.

We passed through a period where I thought we could have managed and probably kept most of the commitments.

We've arrived at a point where, when the moment of reckoning comes, we'll not only do things that are very unjust and unfair to vulnerable people.

I think we will create a moment of enormous social betrayal.

If you think folks are upset now, wait for that moment.

- Well, this is something you've been talking about for a long time, but so have people on the right.

William F. Buckley Jr. welcomed Ronald Reagan to this program many times throughout the course of his public career.

And after he was president, Reagan came onto the program and spoke about the national debt.

- And there's another thing also that we should have, and that is a constitutional amendment preventing the government from running a deficit.

Now, the first man who ever proposed that was the founder of the Democratic Party, Thomas Jefferson.

- [Interviewer] Yes.

- When he first read the Constitution, he said it had one glaring omission.

It does not have a clause preventing the federal government from going into debt.

- It's hard to get a constitutional amendment about anything these days.

But are you concerned that we're past the point of no return?

- I think we are with regard to many of the commitments that we've made.

And that's why I think it's so sad that we've put ourselves in a position where the arithmetic is, to me, just irrefutable.

We're not going to be able to do it.

Now we're going to have to do some things that aren't fair.

And we just have to at some point get started and try to minimize that.

- You've most recently been the president of Purdue University, and university campuses have witnessed incredibly heated debates around the October 7th attack by Hamas on Israel.

Harvard faced criticism for being too passive when pro-Palestinian student groups blamed Israel for the Hamas attacks.

In addition to that, I mean it wasn't just Harvard.

There were several universities who initially made statements and then had to change their statements, update their statements, to clarify that Hamas had attacked Israel.

If you were still Purdue's president, how would you have responded to the events of October 7th?

- Purdue has, under a by law first passed in 1968, observed the so-called Calvin principles which said basically that universities should not take institutional positions on matters that don't deal with their own business, or business of higher-ed at least.

I think that's a very good rule.

So I thought the appropriate approach, and there's no easy answer to this, was strong personal statements, as many presidents made, particularly to the Jewish communities on their campus, but to stay away from institutional statements that set a precedent that then you'll be challenged to talk about other things in the future.

- So then what is your view about the responsibility of universities to speak out about events?

- The fundamental responsibility of universities is to vigorously, in an uncompromising way, protect people's ability to speak.

They've been violating that, either actively or tacitly, in way too many cases.

And so that's the real task is to clean that up.

I think I see some positive signs.

The excesses, the cancellations, the shouting down, the dis-invitations, seem to be diminishing a little bit.

People who did know better all along in capacities of leadership are starting to assert that a little more.

The university exists to advance and transmit knowledge.

And knowledge only advances through the collision of ideas.

John Stuart Mill said, "Both teacher and learner go to sleep at their posts when there's no enemy in the field."

It's essential to the progress of knowledge and to the learning process.

And so young people, unfortunately, many of them, have not heard that on their way to college.

And I think they need to.

And when they do, I think they tend to respond pretty positively.

I've just come from a campus which has attracted some criticism for some failures in the past.

But it was a very civil and appropriate conversation that I had with some very interested in engaged students.

And it can still happen, and I hope will happen more often.

- In the wake of the October 7th attack by Hamas on Israel, Governor DeSantis has encouraged Florida officials to direct state universities to disband groups with ties to the National Students for Justice in Palestine Organization.

And he cited the group's activities, saying that they amount to support for terrorism.

What about student groups on campus and their rights to free speech?

- I think you have to protect them.

That doesn't mean you condone.

You're free to condemn.

But I would be very, very hesitant.

The students involved, at least many of them, don't think that's what they're doing.

- Right.

- I think they have an incorrect and a warped view, even, of the facts on the ground in Israel, the history of Israel and so forth.

I think they're just profoundly wrong about all that.

- Then what should Harvard have done about the student groups?

- Well, condemn in unequivocal terms those, I mean, this is something that happened on their campus.

This is not a university expressing opinion or pontificating about events elsewhere.

And so I do think that was something was called for.

And their rather tepid initial reaction, of course, I think spurred a fairly interesting backlash that may be helpful.

Too bad it happened, but it may be somewhat helpful over time.

By the way, I think the statements by some employers that, you know, we're not interested in hiring somebody, an individual like that, doesn't say that group should be banned, but they're perfectly, should feel perfectly free to make an individual judgment.

And that seems to have gotten the attention of people in what could prove a helpful way.

- You think it's perfectly appropriate?

- [Mitch] Yeah, sure.

- For employers to have the ability to rescind those offers.

- Absolutely.

You know, somebody who blamed all of this on the victims.

That's what the statement said.

They not only said something supportive of Palestinian rights or something.

They blamed this miniature holocaust on the Israelis.

All right, well, that shows both a lack of moral sense and a kind of judgment that I wouldn't want on my payroll somewhere.

So, of course they had every right to do it.

And, again, it may...

If it caused some people to stop and think and reflect on their reflex action here, maybe that has some long run benefit.

- Let me ask about the cost of higher education.

You've spent the last several years as the president of Purdue University.

And in your first year there, you set out to pause a rise in the cost of tuition.

And that one year pause turned into a pause that lasted for your entire tenure as president of Purdue, and continues.

You attribute the success, you say, to cutting inefficiencies, reforming the health care and pension systems, and increasing the size of the student body.

There aren't any other universities of Purdue's size who have not seen dramatic rises in the cost of college education.

Is what you did at Purdue translatable to other universities?

- I have to believe it is.

You're quite right.

When I got there, and Purdue was, in keeping with the rest of higher ed, they'd raised tuition 36 years in a row.

And when I said, "Why don't we take a one year pause just to show that we're sensitive to this?"

The most fascinating reaction came from the very talented woman who was the head of admissions who said, "Oh Mitch, if we do that, people will think we don't have confidence in our product."

Meaning that when everybody else is going up, and if we don't, people were associating- - The cost with the quality.

- The cost with the quality.

And so I remember I said, that's not what they're saying.

They're saying, they're beginning to say, with good cause, "Why does it cost so much?

And are we really getting value for that?"

I was wrong as to how long it took.

It was several years, really, before I think the clamor got to the point where schools that had kept on going up began to really feel pressure.

And today they really are.

And that people now are really questioning whether they need to go to a four year school at all.

So I was glad we acted, you know, before we got near that reef.

- You've said that you could not, quote, "Think of a less defensible act of public policy than President Biden's student loan forgiveness program," which was struck down by the Supreme Court in June.

And you argued that it rewarded the wealthy, would add to the government's debt, and was unconstitutional.

- Well, you left out a couple arguments, but yeah.

- Is there a role for the federal government handling mounting student debt, which is now $1.7 trillion?

- When you say handling, you know, the federal government took over lending.

Whereas once upon a time it supported it.

It in essence, nationalized it.

- Subsumed it, yeah.

- Under President Obama.

At the time, the nation was told it is going to save a lot of money, it will even be a money maker.

And of course, it turned into quite the opposite.

So there was an experiment that didn't work out very well.

I worked for a university where 99-plus percent of our graduates who borrowed the money paid it back.

We know that with each increasing subsidy of higher education by the federal government, that it's been a driver of the higher costs.

The most authoritative estimates say, you know, 2/3 or more, you raise the subsidies a dollar, the colleges have been pocketing 2/3 or something like that.

People used to ask me these questions all the time, you know, this problem of student debt.

I said, well, you could start by not charging so darn much in the first place.

- Well, that's what you do.

- Yeah.

You know, I have always favored putting, you know, the schools at some risk.

If you're going to accept students whose education is being somewhat in part paid for by the federal government, and they don't pay it back, if the schools just had a little skin in the proverbial game, 10% or something, some small share of the amount defaulted, they'd just be much more careful.

They wouldn't want the reputational risk and they wouldn't want to lose the money.

I think that's a far better approach, honestly.

- I do need to ask you about the next presidential contest.

Former President Trump remains the front runner for the GOP nomination in 2024.

And you have admittedly stayed away from partisan politics for the better part of the last decade.

But you have not refrained from criticizing President Trump from time to time.

As the field shapes up for 2024, what are you hearing from the candidates?

- Look, I'll just say, you say, what am I hearing?

I'll just tell you things that are visible.

Of course I watch as an attentive citizen should.

Here's something I see.

I see, I think, an ahistorical moment, with the parties who have historically competed for the middle now very much dominated, I won't say totally captured, but dominated by their more ardent extremes, and an unprecedented percentage of people across age groups and geography and elsewhere who express little or no confidence in the two parties.

On top of that, I see an election in which, until something changes, seems destined to be between two octogenarians.

That's new.

- Yeah.

- And raises questions of its own.

And so, I'm not predicting this, but I don't for a moment agree with those who say, "Well, third candidacies just never, they never work out."

I know the history.

But, you know, every so many decades, something does change.

- Since you mention it, there is an independent group called No Labels, which continues to lay the groundwork for a third party candidacy.

Now, you have said that you have no interest in being such a candidate, but you've also defended the strategy.

And I've heard you say, you know, you don't buy that this is mission impossible.

Why not?

- Well, for the reasons I just gave you, I just don't.

I think we are in a moment that is unlike the past.

I think a lot of, a majority of Americans might feel a sigh of relief if we didn't have either of the current front runners.

But, you know, then what?

And I think that's a question that nobody's tried to answer yet.

- Are you saying you think a third party challenge would be healthy for our democracy?

- Well, first of all, there's no third party.

I mean, if there were really a viable third party with a program, and the ability perhaps to implement it.

I mean, the No Labels folks are trying to behave responsibly.

They produced a little list of issues that people can agree or disagree, but they're not crazy.

But, again, take that to the Congress we have now, what are the chances that you could actually enact or effect those changes?

So it might have some therapeutic value to get us past the moment we're in, but it won't solve our problems.

- I mean, what you're doing is you're really reflecting negatively on our ability as a self-governing democracy to self-govern.

- I hate to, I hate to, I'm not ready to give up on the question.

I will just say that that book I wrote 12 years ago, I couldn't write today.

- You couldn't write it.

- I think in view of what we've done or not done it does not validate the idea that we're ready to make what I consider adult long-term decisions in the interest of the nation's future and the interest of the future of our kids.

- If you were advising the next President of the United States, what would you advise them to focus on?

- I would certainly encourage that person to try to use the office to appeal to Americans to, you know, lay down your cudgels.

We've got problems that we share here.

You know, President Reagan, there were times when I was working for him that a few of us hotheads, I was sometimes one of those, you know, would get a little too boisterous about things.

And he used to say, "Well, no, no, no.

We have no enemies, only opponents."

And, you know, maybe somebody, maybe at some point someone will decide that that's not bad practice.

- Keep hope alive.

- Sure.

So, you know, I'm sort of raised to be an optimist.

Life has taught me to be an optimist where this country is concerned.

And I'm struggling more than before because you can't blink away the facts that are sitting right in front of you.

But, you know, I still believe that nobody's going to find a better formula than one based on ordered liberty, and human dignity, and individual freedom, political and personal.

And I hope those are going to be enduring principles, even if we have to go through some sort of a wringer and reorder the institutions that serve us.

- Governor Mitch Daniels, thank you for joining me on "Firing Line".

- Enjoyed it.

[light music] - [Narrator] "Firing Line" with Margaret Hoover is made possible in part by: Robert Granieri, Vanessa and Henry Cornell, The Fairweather Foundation, The Tepper Foundation, The Asness Family Foundation, The McKenna Family Foundation, Charles R. Schwab, and by The Rosalind P. Walter Foundation and Damon Button.

Corporate funding is provided by: Stephens Inc. [light music continues] [light music continues] [light music continues] [light playful music] [soft music] - [Narrator] You're watching PBS.