RH Jones: A message from Rep. Brian G. Williams
41st District Rep Brian Williams' attached achievements.
A forum for Ohio educators, sharing thoughts regarding their health care and pension system (STRS Ohio). Researcher John Curry manages a clearinghouse of related e-mails, articles, announcements, etc. His daily mailings include many items that do not make it to this blog. Contact John (email@example.com) if you wish to be on his e-mail list. Kathie Bracy: firstname.lastname@example.org.
Election Day is less than two weeks away and all registered voters in
Let me give you a little information on the actions of this woman as both auditor and attorney general. For many years, state law mandated that both the attorney general and the auditor were members of all of the state retirement boards. These state officers rarely, if ever, actually attended the board meetings but send one of their deputies. Retired teachers, members of CORE, Concerned Ohio Retired Educators, persuaded the legislature to remove these state officers from the boards.
During the tenure of Mrs. Montgomery and Mr. Petro, the State Teachers Retirement Board Executive Director and Board members, along with many of the employees, drifted into an entitlement philosophy and spent millions of dollars on themselves and a monstrosity of a building and art work instead of using the money for retirees.
Ohio Revised Code 3307.15 states
“The board and other fiduciaries shall discharge their duties with respect to the funds "solely" in the interest of the participants and beneficiaries; for the "exclusive" purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the system; with care, skill, prudence….”
In the budget bill a couple of years ago, we were successful in persuading the legislators to put in a line authorizing the Inspector General to investigate the board. It has been reported to us that both Mr. Petro and Mrs. Montgomery went to the governor and asked him to line-item veto that because they were members of the board. When later we asked these two directly to launch an investigation, we were told that that would be a conflict of interest.
The greatest scandal ever to hit
Now, I ask you, do we want this person to be our attorney General? Absolutely not.
Paul L. Boyer
Retired since 1985
Life member OEA/OEA-R,
NEA, ORTA, CORE
Proud to be named
“Core” of CORE
62 ‘conduits’ used
On ‘dangerous turf’
By LUCAS L. JOHNSON II
The Associated Press
Thursday, November 2, 2006; 1:11 AM
NASHVILLE, Tenn. -- Drugstore operator CVS Corp. announced Wednesday it is buying pharmacy benefits manager Caremark Rx Inc. for about $21.2 billion in stock, creating a company that will have formidable power in negotiating lower prices with drug companies.
The deal would create a $75 billion drug distribution powerhouse that could compete more effectively for customers as Wal-Mart Stores Inc. and other retailers introduce programs selling cheap generic drugs.
"This is all about giving the consumers unparalleled access and choice ... It will help providers deliver the right drugs at the right time," CVS CEO Tom Ryan said in a conference call.
But investors sent shares of both companies lower, and some analysts raised concerns about integrating the two businesses.
CVS shares tumbled $2.32, or 7.4 percent, to close at $29.06 on the New York Stock Exchange while Caremark lost $1.06, or 2.2 percent, to finish at $48.17. Caremark shareholders will be getting CVS stock in the deal.
SunTrust Robinson Humphrey analyst David Magee wrote in a note that the deal could be seen as too much risk for CVS which is still digesting acquisitions from the past couple of years, including purchasing the Sav-On drug store chain made earlier this year. He also wrote the deal could distract CVS from growing its existing business lines.
He said the he was optimistic about the long-term implications of the deal because of the size and buying power of the new company.
Company officials said the deal would create significant benefits for employers and health plans through more effective cost management and new programs, and for consumers through expanded choice and more personalized services.
"Combining Caremark's expertise in serving employers and health plans with CVS's expertise in serving consumers will create a powerful force for change in pharmacy services," said Edwin "Mac" Crawford, Chairman, CEO and President of Caremark, which is based in Nashville.
The merger brings together companies from two industries that have had a sometimes bitter rivalry. PBMs offer customers the option of purchasing their drugs through the mail for reduced prices. Drug stores have argued such policies cut into their revenue and compromise patient safety because it deprives them of access to a pharmacist.
The growing mail order business has been hurting drug stores' market share, said Morgan Stanley analyst Mark Wiltamuth. CVS has its own mail order subsidy and analysts said buying Caremark would bolster that portion of its business, analysts said.
The companies called the deal a "merger of equals" and under the terms, Caremark shareholders will receive 1.67 shares of Woonsocket, R.I.-based CVS for each share of Caremark. CVS shareholders will own 54.5 percent of the combined company and Caremark shareholders will own 45.5 percent.
The new company will be called CVS/Caremark Corp. and will be headquartered in Woonsocket.
The pharmacy services business will remain based in Nashville. Combined 2006 revenue for the companies are expected total about $75 billion, a joint statement said.
Caremark's Crawford will become the chairman of the combined company and Ryan will become president and chief executive of the combined company.
After the markets closed Wednesday, CVS reported its third-quarter profit rose 13 percent on higher same-store sales.
Net income grew to $280.7 million, or 33 cents per share, from $249.2 million, or 30 cents per share, a year ago.
Revenue rose 25 percent to $11.21 billion.
Analysts surveyed by Thomson Financial expected earnings per share of 32 cents on revenue of $11.24 billion.
Caremark reported a 25 percent increase in third-quarter profit on strong sales in the company's mail-order and retail businesses.
Net income grew to $288.6 million, or 67 cents per share, from $231.4 million, or 51 cents per share, a year ago.
Revenue rose 13 percent to $9.14 billion.
Analysts expected earnings per share of 63 cents on revenue of $9.23 billion.
Glenn Garmont, an analyst with First Albany Corp., said before the announcement that the deal was likely spurred in part by the fear that Wal-Mart, "will emerge as a fierce new competitor following its introduction of selected $4 generic drugs."
Wal-Mart announced last week that it is extending its $4 for a one-month supply of 314 different generic prescriptions to make the program available at 1,008 stores in 27 states.
However, Ryan and Crawford said Wal-Mart's action didn't affect their decision to merge.
"We've been working on all this for some time," Crawford said. "This didn't have anything to do with Wal-Mart."
Garmont said such a deal between Caremark and CVS "would spawn others, and we view all PBMs ... as potential take-out targets."
Still, some analysts said the deal might face antitrust concerns. Barry Barnett, a health care consultant for PricewaterhouseCoopers, said regulators might be concerned that Caremark might unfairly funnel business to CVS pharmacies at the expense of other drug stores.
Caremark buys drugs from pharmaceutical companies directly and then distributes them through its national network of about 60,000 pharmacies and seven mail-order offices. It provides services for over 2,000 corporate, insurance, managed care, government, and union health plans.
Caremark posted 2005 net income of $932.4 million on sales of $32.99 billion.
CVS is the nation's largest pharmacy chain by prescriptions filled, and is second to Walgreen Co. in total sales. It operates more than 6,200 stores in 45 states and reported 2005 net income of $1.22 billion on sales of $37.01 billion.
The Securities and Exchange Commission has been investigating whether executive stock options were backdated at Caremark, company officials have acknowledged. In September, Caremark's Crawford said the company is in "good shape" regarding the investigation and doesn't expect to have to restate earnings.
The award, in the small-market print category, was for his series "Who's Protecting Us?" which examined the operation of the Ohio Environmental Protection Agency. The occasional series ran from October 2005 through December.
Founded in 1990, the Society of Environmental Journalists has about 1,300 members. The organization's mission is to advance public understanding of environmental issues by improving the quality, accuracy and visibility of environmental news reporting.
First place in the small-market category went to the Bangor (Maine) Daily News and second place went to El Diario, a newspaper in Mexico.
The awards were announced during the society's annual conference in Burlington, Vt.
Top Government Official Says US
on Verge of Economic Disaster
By Matt Crenson
The Associated Press
Saturday 28 October 2006
A dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.
David M. Walker sure talks like he's running for office. "This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed."
But Walker doesn't want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.
Basically, that makes Walker the nation's accountant-in-chief. And the accountant-in-chief's professional opinion is that the American public needs to tell Washington it's time to steer the nation off the path to financial ruin.
From the hustings and the airwaves this campaign season, America's political class can be heard debating Capitol Hill sex scandals, the wisdom of the war in Iraq and which party is tougher on terror. Democrats and Republicans talk of cutting taxes to make life easier for the American people.
What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.
There's a good reason politicians don't like to talk about the nation's long-term fiscal prospects. The subject is short on political theatrics and long on complicated economics, scary graphs and very big numbers. It reveals serious problems and offers no easy solutions. Anybody who wanted to deal with it seriously would have to talk about raising taxes and cutting benefits, nasty nostrums that might doom any candidate who prescribed them.
"There's no sexiness to it," laments Leita Hart-Fanta, an accountant who has just heard Walker's pitch. She suggests recruiting a trusted celebrity - maybe Oprah - to sell fiscal responsibility to the American people.
Walker doesn't want to make balancing the federal government's books sexy - he just wants to make it politically palatable. He has committed to touring the nation through the 2008 elections, talking to anybody who will listen about the fiscal black hole Washington has dug itself, the "demographic tsunami" that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government.
"He can speak forthrightly and independently because his job is not in jeopardy if he tells the truth," said Isabel V. Sawhill, a senior fellow in economic studies at the Brookings Institution.
Walker can talk in public about the nation's impending fiscal crisis because he has one of the most secure jobs in Washington. As comptroller general of the United States - basically, the government's chief accountant - he is serving a 15-year term that runs through 2013.
This year Walker has spoken to the Union League Club of Chicago and the Rotary Club of Atlanta, the Sons of the American Revolution and the World Future Society. But the backbone of his campaign has been the Fiscal Wake-up Tour, a traveling roadshow of economists and budget analysts who share Walker's concern for the nation's budgetary future.
"You can't solve a problem until the majority of the people believe you have a problem that needs to be solved," Walker says.
Polls suggest that Americans have only a vague sense of their government's long-term fiscal prospects. When pollsters ask Americans to name the most important problem facing America today - as a CBS News/New York Times poll of 1,131 Americans did in September - issues such as the war in Iraq, terrorism, jobs and the economy are most frequently mentioned. The deficit doesn't even crack the top 10.
Yet on the rare occasions that pollsters ask directly about the deficit, at least some people appear to recognize it as a problem. In a survey of 807 Americans last year by the Pew Center for the People and the Press, 42 percent of respondents said reducing the deficit should be a top priority; another 38 percent said it was important but a lower priority.
So the majority of the public appears to agree with Walker that the deficit is a serious problem, but only when they're made to think about it. Walker's challenge is to get people not just to think about it, but to pressure politicians to make the hard choices that are needed to keep the situation from spiraling out of control.
To show that the looming fiscal crisis is not a partisan issue, he brings along economists and budget analysts from across the political spectrum. In Austin, he's accompanied by Diane Lim Rogers, a liberal economist from the Brookings Institution, and Alison Acosta Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, a conservative think tank.
"We all agree on what the choices are and what the numbers are," Fraser says.
Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America - Bill Gates, Warren Buffett and those Google guys included.
A hole that big could paralyze the U.S. economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today.
And every year that nothing is done about it, Walker says, the problem grows by $2 trillion to $3 trillion.
People who remember Ross Perot's rants in the 1992 presidential election may think of the federal debt as a problem of the past. But it never really went away after Perot made it an issue, it only took a breather. The federal government actually produced a surplus for a few years during the 1990s, thanks to a booming economy and fiscal restraint imposed by laws that were passed early in the decade. And though the federal debt has grown in dollar terms since 2001, it hasn't grown dramatically relative to the size of the economy.
But that's about to change, thanks to the country's three big entitlement programs - Social Security, Medicaid and especially Medicare. Medicaid and Medicare have grown progressively more expensive as the cost of health care has dramatically outpaced inflation over the past 30 years, a trend that is expected to continue for at least another decade or two.
And with the first baby boomers becoming eligible for Social Security in 2008 and for Medicare in 2011, the expenses of those two programs are about to increase dramatically due to demographic pressures. People are also living longer, which makes any program that provides benefits to retirees more expensive.
Medicare already costs four times as much as it did in 1970, measured as a percentage of the nation's gross domestic product. It currently comprises 13 percent of federal spending; by 2030, the Congressional Budget Office projects it will consume nearly a quarter of the budget.
Economists Jagadeesh Gokhale of the American Enterprise Institute and Kent Smetters of the University of Pennsylvania have an even scarier way of looking at Medicare. Their method calculates the program's long-term fiscal shortfall - the annual difference between its dedicated revenues and costs - over time.
By 2030 they calculate Medicare will be about $5 trillion in the hole, measured in 2004 dollars. By 2080, the fiscal imbalance will have risen to $25 trillion. And when you project the gap out to an infinite time horizon, it reaches $60 trillion.
Medicare so dominates the nation's fiscal future that some economists believe health care reform, rather than budget measures, is the best way to attack the problem.
"Obviously health care is a mess," says Dean Baker, a liberal economist at the Center for Economic and Policy Research, a Washington think tank. "No one's been willing to touch it, but that's what I see as front and center."
Social Security is a much less serious problem. The program currently pays for itself with a 12.4 percent payroll tax, and even produces a surplus that the government raids every year to pay other bills. But Social Security will begin to run deficits during the next century, and ultimately would need an infusion of $8 trillion if the government planned to keep its promises to every beneficiary.
Calculations by Boston University economist Lawrence Kotlikoff indicate that closing those gaps - $8 trillion for Social Security, many times that for Medicare - and paying off the existing deficit would require either an immediate doubling of personal and corporate income taxes, a two-thirds cut in Social Security and Medicare benefits, or some combination of the two.
Why is America so fiscally unprepared for the next century? Like many of its citizens, the United States has spent the last few years racking up debt instead of saving for the future. Foreign lenders - primarily the central banks of China, Japan and other big U.S. trading partners - have been eager to lend the government money at low interest rates, making the current $8.5-trillion deficit about as painful as a big balance on a zero-percent credit card.
In her part of the fiscal wake-up tour presentation, Rogers tries to explain why that's a bad thing. For one thing, even when rates are low a bigger deficit means a greater portion of each tax dollar goes to interest payments rather than useful programs. And because foreigners now hold so much of the federal government's debt, those interest payments increasingly go overseas rather than to U.S. investors.
More serious is the possibility that foreign lenders might lose their enthusiasm for lending money to the United States. Because treasury bills are sold at auction, that would mean paying higher interest rates in the future. And it wouldn't just be the government's problem. All interest rates would rise, making mortgages, car payments and student loans costlier, too.
A modest rise in interest rates wouldn't necessarily be a bad thing, Rogers said. America's consumers have as much of a borrowing problem as their government does, so higher rates could moderate overconsumption and encourage consumer saving. But a big jump in interest rates could cause economic catastrophe. Some economists even predict the government would resort to printing money to pay off its debt, a risky strategy that could lead to runaway inflation.
Macroeconomic meltdown is probably preventable, says Anjan Thakor, a professor of finance at Washington University in St. Louis. But to keep it at bay, he said, the government is essentially going to have to renegotiate some of the promises it has made to its citizens, probably by some combination of tax increases and benefit cuts.
But there's no way to avoid what Rogers considers the worst result of racking up a big deficit - the outrage of making our children and grandchildren repay the debts of their elders.
"It's an unfair burden for future generations," she says.
You'd think young people would be riled up over this issue, since they're the ones who will foot the bill when they're out in the working world. But students take more interest in issues like the Iraq war and gay marriage than the federal government's finances, says Emma Vernon, a member of the University of Texas Young Democrats.
"It's not something that can fire people up," she says.
The current political climate doesn't help. Washington tends to keep its fiscal house in better order when one party controls Congress and the other is in the White House, says Sawhill.
"It's kind of a paradoxical result. Your commonsense logic would tell you if one party is in control of everything they should be able to take action," Sawhill says.
But the last six years of Republican rule have produced tax cuts, record spending increases and a Medicare prescription drug plan that has been widely criticized as fiscally unsound. When President Clinton faced a Republican Congress during the 1990s, spending limits and other legislative tools helped produce a surplus.
So maybe a solution is at hand.
"We're likely to have at least partially divided government again," Sawhill said, referring to predictions that the Democrats will capture the House, and possibly the Senate, in next month's elections.
But Walker isn't optimistic that the government will be able to tackle its fiscal challenges so soon.
"Realistically what we hope to accomplish through the fiscal wake-up tour is ensure that any serious candidate for the presidency in 2008 will be forced to deal with the issue," he says. "The best we're going to get in the next couple of years is to slow the bleeding."