FORTUNE -- Indiana Governor Mitch Daniels still hasn't decided whether he's running for president, but he knows time is running out. "I have to make a decision within a few weeks," he said in an exclusive interview with Fortune.
Of the many possible Republican contenders, Daniels has attracted the most speculation because his success fixing Indiana's fiscal mess positions him best to address the nation's looming debt crisis. Pundits, including Time magazine's Joe Klein and the New York Times' David Brooks, have publicly urged him to run, and many Republicans have beseeched him privately. He has said he'd make no decision until after the Indiana legislature concluded its session -- which it did at the end of April -- and the demands of fundraising probably require that any candidate declare his or her intentions by June. So Daniels knows the clock is ticking.
It's far from clear whether Daniels burns to be president, but he is genuinely passionate about the fiscal threat to America's future. He's a fan of Paul Ryan's multi-year budget proposal: "I think it's terrific. It's clear and visionary and courageous -- the boldest and bravest effort that we've seen. It's already improved the debate, so it's a real contribution." Ryan proposes fundamental changes to Medicare, and though they wouldn't take effect for a decade, some seniors are already beating up Republican representatives who've backed Ryan's plan. Is Medicare still an issue that elected officials can't touch? "Better not be," Daniels says, "because it'll wreck America if that's the case."
To Daniels, changing Medicare as Ryan advocates is good news, not a painful sacrifice: "What people will eventually understand is that the real enemies of Medicare, the real enemies of Social Security, are these people who are saying leave them as they are. They will explode, or implode. Ryan and people who want to go a similar direction are out to save the safety net."
As a candidate, Daniels would make a near-perfect anti-Obama. He scorns President Obama's signature policy triumph -- health care reform -- which Daniels calls "a travesty." Asked why, he says, "How much time do I have? All the claims made for it were false. It's going to balloon the federal deficit, not tame it. It's going to raise health care spending, not lower it. It's going to cost a lot of people the coverage they have -- that was supposedly not true. It doesn't reform anything."
While Obama has expanded the federal government, Daniels has shrunk Indiana's to the point where the state now employs fewer government workers per capita than any other state. Washington is running record deficits, but Indiana now runs a surplus; the U.S. Treasury's credit rating is under threat, but Indiana's has improved under Daniels, to triple-A.
More contrasts: While Obama has made federal regulators far more activist, Daniels says, "I'm in favor of at least temporarily setting aside some of the regulations that make it almost impossible to start a business and hire people in this country -- making sure that we still protect vital interests like the environment and worker safety." While Obama has been extraordinarily friendly to labor unions, Daniels reduced the bargaining rights of the Indiana government's unionized workers six years ago, long before the recent controversies in Wisconsin and Ohio. (Granted, it was easier for him because he could do it by executive order.)
Daniels (Princeton '71) seems every bit as smart as Obama. He has also shown promise against him politically: In 2008, when Obama won Indiana, Daniels won reelection in a landslide.
But Daniels still has work to do making voters feel the urgency that he feels about America's fiscal peril. Asked how he can do it, he says, "Look, debt and its consequences became very concrete and very personal for tens of millions of Americans recently. I don't know what could be more real than the experience many Americans have had, having gotten over-extended themselves, or someone in their family, or the business they once worked for. There's a lot more concern that the nation could go broke, with terrible consequences, especially for low-income people." But exactly what those consequences might be, he doesn't say. If he wants voters to feel good about changing Medicare and means-testing Social Security, he'll have to create a vividly burning platform, and he doesn't seem to have found the words yet.
Daniels is an attractive candidate on paper. The big question is whether he wants the presidency bad enough to go through the experience of running for it. He has been perfectly clear that his real passion is preventing a national financial disaster, and he'll run for president if he decides that's the best way he can help do it. But that's not the same as a deep desire for the office. In today's political environment it's hard to see how anyone gets there without that.