INDIANAPOLIS — Gov. Mitch Daniels will make a brief inauguration speech Monday after being sworn in for a second term and will be in front of a crowd again Tuesday to give the State of the State address.

Daniels said he’s treating the speeches as a pair: Monday’s address is a more poetic outline of his long-term vision for the state, while Tuesday will be a more businesslike speech about the immediate challenges Indiana faces.

The sagging economy is looming over lawmakers and what they hope to accomplish during this legislative session, in which they must craft a new two-year budget. But don’t expect all doom and gloom from the Republican governor.

“I’m trying to find the right balance between realism and optimism,” Daniels said. “We’re facing very difficult times right now and possibly for quite some time. But also, I think it’s important to keep some perspective historically.

“We can get through this.”

Indiana saw its unemployment rate grow to a seasonally adjusted rate of 7.1 percent in November, up 2.6 percentage points from November 2007, according to the U.S. Bureau of Labor Statistics. The state also received a grim fiscal forecast in December that prompted Daniels to order a wage freeze for state employees and other cuts to keep the current budget balanced.

But Daniels says Indiana is in better financial shape than many of its peers. The state has more than $1 billion in its main checking account and reserves, and there is no talk of widespread teacher layoffs or a general tax increase to ensure the next budget will be balanced.

“I think there’s some responsibility on the part of people in jobs like this to point the way forward, and to try to lift people’s confidence and spirits — even while we face our problems,” Daniels said. “That’s what I’m trying to do.”

Daniels’ swearing-in will be a scaled-down affair from his first term, when he took the oath of office before a large crowd inside the Pepsi Coliseum at the Indiana State Fairgrounds. Monday’s ceremony will take place just outside his office on the second floor of the Statehouse.

Daniels said it was appropriate to scale back because of the economy and the fact that it’s his second term.

Lt. Gov. Becky Skillman, incoming Attorney General Greg Zoeller and new Superintendent of Public Instruction Tony Bennett also will be sworn in Monday.

The State of the State speech is scheduled for Tuesday at 7 p.m. in House chambers.