AMANPOUR: Why do your wife and your children hate the idea so much?
M. DANIELS: We've got young women, three of them married not too long. They're looking forward to building lives, starting families, and this was just a disruption that they were very, very leery of, and who wouldn't understand that?
AMANPOUR: Does it say something about the way politics is played?
M. DANIELS: If it weren't for the cheap shots and the, you know, personal unfairnesses that would -- that would come with it, there's also just the inevitable loss of privacy, the security, all of that.
AMANPOUR (voice-over): Daniels and his wife Cheri divorced in the 1990s, and she moved to California while he raised their four daughters here in Indiana, but they remarried after several years apart. Unwilling to put his family through a re-airing of that story, he decided to forego the race of a lifetime.
(on-screen): Do you think you could have beaten President Obama?
M. DANIELS: Yes, I think so. I mean, no one can know.
AMANPOUR: Business people and community leaders said that they really felt Governor Daniels could give President Obama a run for his money in a general election. Much has been said about Governor Daniels' lack of charisma, but most people say that his record of success in this conservative Midwestern state speaks for itself.
(voice-over): He tamed the public sector unions and cut the number of state workers. Daniels lowered property taxes and invested in infrastructure projects.
M. DANIELS: I enjoy this centennial version of the -- as we love to say, greatest spectacle in racing. Thanks, John.
AMANPOUR: Just before today's Indianapolis 500 race, he hosted a reception for motor sport executives that he's trying to lure here. Doug Brown runs a local technology company. He's adding more than 100 jobs thanks to Daniels' tax incentives.
BROWN: You don't think of Indiana as a high-tech state, but his policies really are growing jobs in that sector. Indiana had one of the highest job growth rates for private companies in the nation.
AMANPOUR: As the governor of a small state, Daniels mingles easily with his constituents here at the gym.
M. DANIELS: Hello. How are you all?
AMANPOUR: During his last campaign in 2008, he put out a series of videos that he called Mitch TV. This one shows him and his wife, Cheri, at the state fair.
C. DANIELS: Come on, Belle.
AMANPOUR: She came in second in the cow-milking contest, and he won a second term in a landslide. Daniels was budget director under President George W. Bush, and his attempts to control spending earned him a nickname that he still proudly displays.
(on-screen): So you have a lot of memorabilia, including what looks like a samurai sword. What is this here?
M. DANIELS: That's what it is. Because of my alleged thriftiness...
AMANPOUR: Slash and burning?
M. DANIELS: ... well, some said -- I had that nickname for a while, and...
AMANPOUR: The blade?
M. DANIELS: Yes, the blade, and the nicknamer-in-chief conferred that on me.
AMANPOUR: And that was?
M. DANIELS: President Bush.
AMANPOUR: Indiana's magnificent state capitol took 10 years to build and came in under $2 million. That's under budget. Now, of course, that was in 1888, but the governor likes to say it's a metaphor for the kind of fiscal prudence that's needed in today's hard times.