INDIANAPOLIS - Indiana leaders love to hate and hate to love the federal dollar. That was evident when the state's budget director and lieutenant governor announced in quick succession that automatic federal budget cuts would not faze the state and that Indiana needs to pursue more federal defense dollars.

Former Gov. Mitch Daniels built a national image decrying out-of-control federal spending. But he often accepted those same dollars with the caveat that he would be a fool not to.

Indiana University Public Policy Institute Director John Krauss says any state leader needs to strike a balance between drawing down federal dollars and bolstering the private sector.

That balance is being pondered as lawmakers weigh whether to sign off on a Medicaid expansion that could bring $10.5 billion in federal money to Indiana.