Children's stories have always held a special place in Indiana. Raggedy Ann and Andy were invented here and James Whitcomb Riley, "The Hoosier Poet," enchanted kids with his homespun rhymes.

If you were making up a children's story about Indiana today, you might start by imagining the state as a stalwart but hollow tree, the kind where an animal might seek shelter for his long winter's nap.

Let's say that animal is a bear. Bears were driven from Indiana long ago but, for the sake of our story, a bear seems right. A critter, that is, who tends to be disoriented and grumpy when roused.

I would cast our governor, Mitch Daniels, as the bear.

The governor's tree got a heavy shaking last week. It must have been a rude awakening.

First came the news that the health care reform bill could include a significant expansion of Medicaid, allowing more low income people to qualify for benefits. Under the proposal, the federal government would pick up the additional costs of the expansion for three years and about 95 percent of costs after that.

Gov. Daniels has made it known for some time that he's not a fan of current health care reform efforts. In this case, he reacted as if he'd been poked with a stick. "If that bill passes in anything like its current form, it is a disaster for taxpayers in this state," he growled. "I think it would be terrible for the health care system in America."

The problem, as none other than Sen. Evan Bayh pointed out, is that the alternative, "to have individual Hoosiers and Indiana businesses continue to indirectly pay the costs of treating the uninsured," is likely to be even worse, since, no matter what happens, Medicaid rolls are expected to increase over the next decade. So we can address the problem at the federal level now, or go back to sleep and deal with it when things get so bad they are impossible to ignore.

Daniels' tree received another jolt a couple days later. The Environmental Protection Agency ruled that greenhouse gases "threaten the public health and welfare of the American people." This finding clears the way for regulations that are bound to place limits on the amount of carbon dioxide we spew in the air. This is a big deal for Indiana because we get more than 90 percent of our energy from coal. We're the only state that ranks in the top 10 for both largest amount of carbon dioxide produced from fossil fuels and the largest amount produced from fossil fuels per capita.

We've known for a long time that this can't be good for our health. I once worked in a library a few blocks from a coal-burning power plant. We had to dust the soot off the stacks on a regular basis. Otherwise, if you ran your finger across a shelf, your fingertip came up black.

That was 20 years ago. We could have been acting on this kind of common-sense evidence, working to find cleaner, more efficient ways to turn on the lights and run our technology. But coal in Indiana is plentiful and cheap. Our dependence on it has kept our energy bills among the lowest in the country, a good thing in a state where household incomes have failed to keep pace with the rest of the nation. The state's business leaders and politicians have not been inclined to push for change, arguing that cheap energy, like daylight savings time, would spawn a business boom that has never materialized. Instead of cleaning up our energy act, Hoosier leaders have rolled over and kept on dreaming.

The EPA announcement amounted to an intervention, the kind that happens in a family when one member is addicted to crack and making life miserable for everyone else.

Unfortunately, we know how Gov. Daniels probably took the news. Last spring he made a well-publicized series of attacks on attempts to impose clean energy standards, saying they would double electric bills, kill jobs and do little to improve the environment.

Daniels seems to have awakened from a deep sleep and mistaken this time for the 1980s. His arguments against cap-and-trade legislation are a virtual echo of arguments made in the late '80s against instituting a similar system to cut acid rain. Yet, when that legislation passed in 1990 it effectively cut sulfur dioxide pollution at a cost lower than predicted.

"There is a tremendous risk in being pushed into an unfair and ultimately counterproductive national energy tax that will cost us dollars today and jobs tomorrow," Daniels snarled last May. But the governor has been overtaken by events. Rather than grumble about fairness, he should be working to accelerate the renewable energy economy that's taking hold here with initiatives like wind farms.

Indiana's story continues. The question is whether we will write the next chapter ourselves, or have it written for us.

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