Saturday, November 04, 2006

RH Jones: A message from Rep. Brian G. Williams

From RH Jones, November 3, 2006
To all:
As a longtime STRS retired member, I would like to share with you some of my
41st District Rep Brian Williams' attached achievements.
HB 95 is of particular interest to me. As a registered nurse my wife was physically assaulted by a visitor to a patient. Oftentimes nurses, being majority women, take more of the wrath than their majority male doctors. For that matter, female or male medical personnel need better protection from assailants. Rep William's Bill 95 fulfills that need.
Serving in a legislature, dominated since 1995 by the GOP, Rep Brian Williams (D) has shown skill learned as an Akron's Schools Supt to work in, with, and around the difficult climate of the Ohio Legislature. He deserves the support of all.
RHJones (And I approve of Rep Williams' message!)

Cathy Burner and Molly Janczyk on HC Legislation: Solving the problem internally

From Molly Janczyk, November 3, 2006
Subject: Re: HC Legislation
Yes, that is what I hear and spending as usual doesn't look good. Being transparent and completely above board-no secrets-with every attempt to be responsible without unnecessary costs regardless of dollars spent shows we are doing all we can. The attitude of it is only this or only that, does not display the attitude that we will be responsible. Getting HC legislation does not mean we lose sight of retirees' dollars as Tom Johnson quoted his mother as saying, 'Remember they worked hard for those dollars.' Respect of retirees is essential and we still don't see that attitude from some.
From Cathy Burner, November 3, 2006
Subject: Re: HC Legislation
The legislature is going to ask that STRS internally solve this problem. We should welcome the opportunity to do so.

Paul Boyer's letter in the Lima News, November 4, 2006 re: election

From Paul Boyer, November 4, 2006

Dear Editor:

Election Day is less than two weeks away and all registered voters in Ohio have an opportunity to support all public school teachers, active and retired. The name Betty Montgomery will appear on the ballot for Attorney General.

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 Ohio, the NOE Coin collector scandal, an audit was made which showed errors and Mrs. Montgomery OK’ed it.

Now, I ask you, do we want this person to be our attorney General? Absolutely not.


Paul L. Boyer

Paul Boyer to Conni Ramser: Why don't you just resign from the board and count it as a bad time in your life?

From Paul Boyer, November 4, 2006
Subject: STRS
The last I remember, you stated that you had not read either of Dennis Leone's reports on his investigation of the STRS operation in 2003. If that is the case, and you do not know what he wrote, then as far as I am concerned, you are "dead in the water". That should have been your first assignment, even before you were appointed to the board. Why don't you just resign and look on this as a bad dream?
What reason do you have for wanting to be on the board so badly that you would somehow secure the questions before being interviewed so you could answer them more intelligently? And please do not say that this is not so. You weaseled your way onto the board with someone's help. I do not know whether you got the questions from OEA or someone else but you showed everyone there that you had them and you became the laughing stock of the retirees present.
As I said before, after you had been on the board for awhile I began to hear better things of you and congratulated you. That, however, did not last long. You have really made a symbol of yourself with some of the actions you have taken since becoming the chair of the board. What gives you the right to make a motion for an item that is not on the budget, such as extending Damon's contract? What gives you the right to put down Dr. Leone just because you do not like a motion he wants to make? Do you think your position is that of a dictator? Oh no, Conni, you are just another member of the board who is to chair the meeting and see that it is run in an orderly manner. As I stated in my last letter, no member of the board has any more power than another member of the board and no member of the board has any right to find fault with another board member during a board meeting. And always remember that as a board member, your power to do things exists only in a meeting of the board. You have no power over anyone outside of a board meeting.
I am wondering, Conni, if you have read SB 133 recently. I would like to call to your attention a couple paragraphs that I have cut and pasted from the internet, as follows:
    · Provides that a member of a state retirement board charged with committing a felony, a theft offense, or an ethics law violation is suspended from the board while the charges are pending and terminates the suspension if the charges are resolved in a manner not resulting in the member being convicted or pleading guilty to the offense.
    · Deems vacant the position of a suspended member who pleads guilty to or is convicted of the offense.
    · Makes ineligible for election to a state retirement board a person who has pleaded guilty to or been convicted of an offense for which a member would be suspended.
Civil action
    · Authorizes the AG to maintain a civil action against a state retirement board member who breaches the member's fiduciary duty to the retirement system for harm resulting from that breach.
I, for one, along with many others, will be watching you very carefully from now on to see if you get out of line sand if you do, I will try to be the first one to file a complaint with the attorney general. Notice very carefully the last paragraph.
I will say again, Conni, why don't you just resign from the board and count it as a bad time in your life? Whatever power play you had hoped to have when you applied for appointment just isn't going to work. Consider yourself forewarned.
Paul L. Boyer

Retired since 1985

Life member OEA/OEA-R,


Proud to be named

“Core” of CORE

From RH Jones: OEA Offers Retirement Systems Training

November 4, 2006
To all:
Please be aware that OEA is seeking applicants for Retirment Systems Training Scholarships. OEA will cover the cost of four 2-day training programs. For more info and to apply for a scholarship, visit OEA website at
I don't know if this includes OEA-R members but it wouldn't hurt if someone would apply. And if you know any friendly and concerned active OEA teacher members who might be interested, encourage them to apply. We need good and honorable folks on our STRS board. This may be chance to make a difference for us.
What they plan to cover in these training programs is anyone's guess. I would hope that they include learning the ORC in all matters at STRS, with particular emphasis on ORC 3307.15.

Betty had her fingers in the PIE long before Noe!

Montgomery tied to donor scandal before Noe
Toledo Blade, November 4, 2006
COLUMBUS -- In March, 1996, Republican Attorney General Betty Montgomery used a hand-written note to thank Larry E. Rogers for pouring $35,000 into her campaign — the day before a new state law took effect that limited contributions to $2,500.

“Larry, if you don’t mind, on occasion I’ll try to stop by [NOT to ask for money] to update you on the issues we’re working on and to get your advice,’’ Ms. Montgomery wrote to Rogers, the president and chief executive of PIE Mutual Insurance Co.

Less than two years later, Ms. Montgomery and other GOP elected officials that Rogers showered with campaign contributions shunned him.

In February, 1998, a special counsel appointed by Ms. Montgomery convinced a judge to order the liquidation of PIE because its liabilities exceeded its assets by $240 million.

A month after the GOP swept all statewide executive races in November, 1998, including Ms. Montgomery’s re-election as attorney general, a grand jury indicted Rogers for bribery, ethics violations, and insurance-code violations.

As Ms. Montgomery and other Republican candidates grapple with the fallout from the Tom Noe rare-coin scandal heading into Tuesday’s election, others have not yet let go of the PIE scandal, which also involved influence-peddling at the highest levels of state government.

Tom McManamon is among them. A former employee of a PIE subsidiary, he wants to know why the Ohio Department of Insurance pushed the medical malpractice insurer into oblivion.

A lawsuit filed by Mr. McManamon alleges that David Meyer, an assistant director of the Ohio Department of Insurance, ignored transactions that would have shown PIE with a surplus of $80 million in 1998.

“Meyer reached a conclusion that this company should be taken down, when the most he should have concluded is that its management needed to change,’’ said Kenneth Seminatore, a Cleveland lawyer representing Mr. McManamon and former counsel to Blue Cross Blue Shield.

In court documents, Mr. Seminatore alleges that Mr. Meyer buried PIE “to provide political cover for the massive political contributions” that Rogers and other PIE executives made to Ms. Montgomery, who received $87,000, and Gov. George Voinovich, who received $85,000.

“It was because of the contributions ... that Meyer wanted to publicly appear ‘tough’ to protect the image of the Ohio Department of Insurance,’’ Mr. Seminatore wrote. “In essence, any perceived ‘sins’ of the state officials in accepting the massive contributions would be ignored, forgotten, or forgiven because of the state’s zealous actions against PIE.’’

Lawrence Pratt, the assistant attorney general representing Mr. Meyer and the state Department of Insurance, said Mr. McManamon’s allegations are “pure wild, unsupported conjecture, better suited for a novel than a courtroom.”

The lawsuit, which is pending in Franklin County Common Pleas Court, is a reminder that Ms. Montgomery’s ties to a flashy GOP businessman, big contributor, and fund-raiser — and eventual convicted felon — did not start with Tom Noe.

Nancy Seaholm, Rogers’ secretary at PIE, told the FBI in 1998 that political figures who often came to the PIE offices and met with Rogers included Ms. Montgomery; U.S. Sen. Mike DeWine, who received $30,500 in contributions from Rogers; then-Ohio House Speaker Jo Ann Davidson, now co-chairman of the Republican National Committee; Mr. Voinovich, now a U.S. senator, and Bob Bennett, chairman of the Ohio Republican Party.

As part of a deal with federal prosecutors in 2001, Rogers pleaded guilty to conspiracy, insurance fraud, tax evasion, and making false statements to the Federal Election Commission. He was sentenced to 40 months in prison and ordered to pay $13 million in restitution to the Ohio Department of Insurance.

62 ‘conduits’ used

From mid 1990 to fall, 1997, Rogers used 62 people — referred to as “conduits’’ — to make $500,000 in illegal campaign contributions, court records say. Rogers and his wife made another $1 million in contributions using funds from PIE to federal, state, and local candidates in Ohio, Kentucky, West Virginia, Maryland, and Missouri — all states where the company was regulated, his plea agreement states.

None of the conduits was charged and the plea agreement does not identify which candidates received the illegal contributions.

As the PIE scandal broke in 1998, Democrats criticized Ms. Montgomery for not immediately returning campaign contributions from Rogers.

Democrat Lee Fisher, who was running for governor then and is Ted Strickland’s running mate this year, returned $10,100 that his campaigns received from Rogers to the fraud section of the state Department of Insurance.

A spokesman for Ms. Montgomery noted at the time that she formed a task force to investigate PIE and Rogers, and took decisive action as the Department of Insurance’s legal counsel to push for the company’s liquidation. It took her four years to return Rogers’ contributions.

Last year, Ms. Montgomery returned contributions of $8,150 from Noe and his wife, Bernadette, within days after authorities alleged that $13 million was missing from the rare-coin funds that Noe controlled.

But Democrats have accused Ms. Montgomery of failing to oversee the Bureau of Workers’ Compensation both as attorney general from 1995 through 2002, and as auditor over the past four years. Ms. Montgomery is running for attorney general against Democrat state Sen. Marc Dann in Tuesday’s election.

Ms. Montgomery declined repeated requests for an interview over the past few weeks, but her campaign press secretary, Jen Detwiler, took a swipe this week at Mr. Seminatore, the lawyer who is suing the department of insurance for the PIE liquidation.

Ms. Detwiler said in a statement Thursday that Ms. Montgomery in the mid 1990s was instrumental in shutting down the proposed merger of Columbia/HCA and Blue Cross Blue Shield — “a deal in which Ken Seminatore stood to make a lot of money.”

“Seminatore has been using the legal system ever since to grind his political ax,’’ Ms. Det­wiler wrote.

Mr. Seminatore replied: “Betty Montgomery is the world’s leading expert on trying to deflect blame.”

On ‘dangerous turf’

Herb Asher, an emeritus professor of political science at Ohio State University, said Ms. Montgomery is vulnerable. Although she has more money than Mr. Dann’s campaign and polls have shown her ahead, some have shown Ms. Montgomery’s support below 50 percent — which is “slightly dangerous turf for a well-known incumbent,’’ Mr. Asher said.

“Her contest today is closer than many people expected,’’ he said.

The state’s decision to liquidate PIE took an enormous human toll.

An estimated 16,000 insured physicians and claimants in eight states where PIE sold medical malpractice insurance were affected by PIE’s collapse, Mr. Seminatore said.

Thousands of doctors had to scramble to find new coverage, and patients had to wait years to get their day in court. No victim could get more than $300,000 on any claim from the state guaranty fund, further victimizing some whose damages were worthy of more money.

Mr. McManamon’s lawsuit is pending in Franklin County Common Pleas Court with Judge John Bender, a Republican.

Mr. Seminatore, the attorney representing Mr. McManamon, said he sees many similarities between the PIE scandal and the one that has swirled around Noe, who is on trial in Lucas County Common Pleas Court for allegedly embezzling more than $2 million from the coin funds he managed for the Bureau of Workers’ Compensation.

“The system in Columbus for the last 40 years is that when something gets so ugly that it sees the light of a headline, the first thing that happens is that the responsible public officials declare outrage over the scandal, demand an investigation by the inspector general — who reports to the governor — who makes sure that two or three underlings get indicted and convicted of some minor crimes and then the investigation stops,’’ Mr. Seminatore said.

Contact James Drew at: or 614-221-0496

Friday, November 03, 2006

Charlie Seipelt: Stories about OEA/STRS relationship from a former STRS Board member from a more distant past

From Charlie Seipelt, November 2, 2006
Subject: Re: HCA Proposal - from Paul Boyer
Former STRS Bd. Member, Lou Koenig (sp), related the exact story about how Herb Dyer was hired to a sizable group of disgruntled retirees from SW Ohio some time ago [See Paul Boyer's "Back off" letter of Nov. 2 below]. This was at a gathering set up by officials of ORTA at a restaurant (called Five Points) near Fincastle shortly after Dennis Leone had blown the whistle and things began to unravel at STRS. He said he was miffed over the process at the time as he was supposed to be on the STRS selection committee but got directed by the OEA group as to how they were to proceed. He said he was bothered by it at the time and continues to be troubled by how STRS and OEA had operated then and now. He claimed that OEA leadership and control had changed from the time he went on the STRS Bd. until he left. Lou had no reason to lie about this matter as he was merely providing information as to how things were in regard to STRS/OEA relationships at the time. From all I read, things haven't changed a great deal when it comes to who is running the ship (direct or indirect).
Letters from, Ray Sutherland, former and respected OEA Field Rep. for SW Ohio, that have passed through this email chain have indicated some similar issues in regard to OEA control and present leadership. I believe Ray said something like, "OEA isn't the same organization he had known and worked for during his professional career." So, draw your own conclusions on the influence OEA has had on our STRS during the past decade. They may try to deny their control but it has been a fact for years and I guess they are ashamed (or belligerent enough) to admit it now that so much (got caught stuff) has come to light.
I don't know if anything I have written means anything but denial of historic facts is a sad thing.

John Bos to Paul Boyer: Rx crisis a national issue, with STRS retirees leading the pack

From John Bos, November 3, 2006
Subject: Re: drugs
Meijer is already selling the same prescriptions as Walmart for FREE!
Caremark is NOT an honest company. We all know that. It will be very interesting to see if STRS again selects a company that is not 100% transparent.
This is another example where the STRS Board (based on my information) gave authorization for Dr. Asbury to select the best provider with very little or no information what was in the contract. According to information on the internet, Caremark has one of the lowest ethics of any company that operates in the USA. Unfortunately, the STRS staff has not recognized the problem. Perhaps they would be more receptive if they would use Caremark and learn about the problems with their daily personal experiences.
We, the retirees of STRS are being taken to the barnyard with high co-payment, drug pricing, and poor service. The prescription crisis is a national issue, but the retirees of STRS are leading the pack!!!!
My mind will never change on Caremark. We can only hope that CVS brings a higher ethical standard to the table for the next 12 months. I do not believe that this will happen in a brief period of time.
John Bos

Shirlee to Gary Russell and Sandy Knoesel: Why is Medical Mutual calling my doctor? Invasion of privacy!

From Sandy Knoesel, November 2, 2006
Subject: Questions concerning Medical Mutual
Thank you for contacting us. We are investigating your concerns.
From: Shirlee Zerkel
Sent: Wednesday, November 01, 2006
To: Russell, Gary; Knoesel, Sandra
Subject: Questions concerning Medical Mutual
Dear Mr. Russell or Ms. Knoesel,
I have an unusual question to ask you concerning a call my general practice doctor received from Medical Mutual. Medical Mutual is calling my family doctor and evidently wanting his office to set me up for a mamagram and pap test. I do not go to this doctor for these procedures. I have a specialist in Toledo that I see for such things because of pre-existing situations. I did not go last year because of the very high deductibles for any office calls and tests. I personally feel that such preventive tests should not be subject to a deductible.
My doctor's office thought this call very strange and I do too. DO NOT TELL ME IT IS BECAUSE YOU AND MEDICAL MUTUAL REALLY CARE ABOUT MY HEALTH! I know better. What is the real reason behind this call to my doctor. It is possible that if I do not have the tests at certain intervals that Medical Mutual/STRS will not pay if a later test detects a problem? Or could it possibly be because I have recently had a Medical bill large enough that Medical Mutual/STRS had to pay some of it and you certainly do not want that to happen again? I personally am upset that your health care provider is calling a doctor and giving him information about me because he happens to treat me for my other existing problems. Is this the work of one of your high paid health care consultant companies that is supposed to save you so much money? I want the real answers.
My privacy has been invaded,
Shirlee Zerkel

Paul to Damon: Negotiate lower drug prices for us

From Paul Boyer, November 3, 2006
Subject: drugs
Dear Damon:
With the news of the merger or buyout, however it is classed, we expect STRS to immediately begin negotiations to get our drug prices lowered so that Caremark does not make all of the profit but passes some of it on to us. There is a revolution going on in the drug industry, as you well know, nd we will not stand paying these high co-pays that have been determined for next year.
Strict negotiations should have some exciting results for STRS. Don't back down with them, show them you mean business. There is no reason now why our prices should go up when the drug companies are offering lower prices directly to consumers.
$125 co-pay for Tier 3 is absolutely out of line as is the new copay for Tier 2.

Thursday, November 02, 2006

Molly to xxx: Many regard OEA as arrogant, snippy, entitled

From Molly Janczyk, November 2, 2006
Subject: Re: Fw: HCA Proposal
I did not call you a liar. But, there is no reason to communicate when you will not accept any respon. nor will Bill. You don't even find something wrong with "Billirakis and then Allen told us not to meddle." Did anyone give counsel to Conni when she threw her hissy fit, refused Leone the rt to speak or make motions, said Shut Up, or went public with her silly remarks or did you all just give high fives ?

Problem is: it only gets thrown to us when we speak and the only time we're heard is when we draw attention to what is going on vs working out things cause they never get worked out with any compromise from your side behind the glass. You can make inuendo, question person's integrity statewide, imply they are not candidates when STRS has declared they are, think you are entitled to do whatever is possible without blame in your minds and then when someone speaks up about it, sh sh, we don't want to appear not playing nice.

It is you and has always been you that begins the show but your actions. No amount of collaboration will ever make us just shut up when you act badly. I have always told you that and if you make a real show, and can actually work thru issues w/o just say no attitudes no matter what to show who's boss, then talk to me.

I am dismally disappointed and frustrated that there was no intent from some of you to ever really cooperate on anything other than HC. Of course we will cooperate on HC as it benefits membership and is what we all want not because you ask but because it is right for retirees, current and future and that is what we are about. It is the right thing to do and we recognize you play a part but then so do all the HCA and membership. You have money and power in this arena. It is very sad though that there was no attempt to really find ways to present a unified face coming to universal right things to do for membership.

YOU means some OEA persons, not all, as we are OEA ad OEA-R and want only to do the right thing for membership - provide proper oversight or legislators will never pass legislation seeing the same old mistakes surfacing and the same old tactics.

Why do I keep hearing one word from many directions describing this faction of OEA: Arrogant, snippy, entitled. Look in the mirror.

We are prepared to set forth a widespread circulation for HC legislation. We haven't liked some of STRS' acts either but again, it is for us acting on behalf of membership and ourselves and for our future educators.

As Leone tells membership most perfectly: What do you propose? Without it, there will be nothing for your educator children and their educator children. That's what he told me and that is what he tells others. We feel now there is real hope that monies will be provided School Boards from State money held for other reasons under Strickland as he has pledged to follow court rules on proper funding. Fedor said then School Boards may see their way clear to help, as I am sure you know and the reason for putting off widespread campaigning until after the election. You are doing the right thing NOW for HC ; it should have been done over a decade ago and much of the membership feels that way. Then the market downturn wouldn't have affected us so drastically if a stream of revenue had already been dedicated to HC. But, here we are and we are ready to help. We will never lay down and shut up when treated badly, ever again.

Play nice; you get nice. Very simple. Make determined efforts to do the right thing, not my interpretation nor Leone's nor Lazares, but what is felt universally to be the right thing vs making a wall on every issue and then putting ridiculous additional interpretations into it: Well, do you mean the hot dog vendor who sometimes comes in to sell? How about the electric bill ; it is a contract?

Paul Boyer: Did somebody say 'Back off?'

From Paul Boyer, November 02, 2006
Subject: Re: HCA Proposal
No, Molly, we are not just plain stupid . We have known from the get go what has been going on with the board; it is just that we can not get some stubborn people to understand. I agree with everything you wrote in your letter but there is more to it.
xxx, I am sure, will not agree to this but we do know that when Mr. Dyer was brought to Columbus to interview with the board, OEA officials somehow got to him first, met him at the airport and took him to a nearby hotel where he was interviewed. Then OEA told their members on the board that this was the man they wanted. Don't try to tell me that OEA did not influence the decisions of the board.
I will agree that OEA has done a lot for teachers while we were teaching. As a teacher, I early became involved with OEA, was elected to the then OEA Research Council and later became a part of the first group of teachers to be trained by Dr. Jirik as a Teacher Advocate. I later assisted Dr. Jerk in some of his conference presentations. In one of my jobs, I became president of the local and brought it in line with OEA and I believe it is still a strong OEA chapter. I worked hard as an OEA member in those days.
On the other hand, the OEA has all but abandoned the retirees and has condoned all of the evil things that the board did in the past and is still trying to do. Gary Allen has resisted Dr. Leone from the beginning.
I remember a couple of years ago we were working hard to get a bill passed through the Legislature and we were informed that Mike Billirakis told the chairman of the committee that if the bill was passed out of committee, he would never receive another dime of OEA money. "Back off" did someone say? xxx, wake up and smell the roses.
The only reason that Mike resigned suddenly from the board was because he knew he was to be soon indicted.
We must see to it that this board comes to work as a cohesive body and no more snipes at one another. Also, no more hidden items to be brought up that are not on the agenda.

Shirley Zerkel: Concerns of a CORE and OEA-R member

From Shirley Zerkel, November 02, 2006
Subject: Concerns of a CORE and OEA-R member
Mr. xxx (identity withheld out of deference to correspondent's wishes. KBB 11/02/06):
I have been following the email barrage and would like to add my observations on the situation. You have made comments in one of these emails that we should not be conducting a withering email barrage aimed at Conni Ramser and Steve Puckett. You would rather see us "direct our energy to getting the legislative support for the 5% additional funding for health care and let elections take care of the Board's makeup." You have said a mouthful there! What you really want is for us to be sidetracked by your comments so that we will let up on members of the Board. These emails of yours are a diversion tactic and that is why you use the word withering. Yes, the health care is very important but so is the makeup of the Board. We can not have Board members who are rubber stamps for the STRS staff. They are not independent thinkers; they jump when Damon says jump.
I just received my Ohio Schools mag. and guess what I see on page 3-an article about SERS and their freezing premiums for 2007. I do not believe that OEA is keeping a 'hands off' policy here. I will quote just the last paragraph from the article. "The OEA believes that the SERS Board needs to continually manage the health care program so that current and future retirees have the opportunity to access affordable health care in the future. The Board's decision not to make relatively minor changes to the premium structure shortens the life of the health care fund, and runs count to the interests of both active employees and those retirees who currectly rely on the SERS health care program." Now let me quote from one of your emails "That we expected STRS Board members to live up to their fiduciary duties and that it was completely inappropriate for OEA to try to influence their votes." You also stated that it was OEA's role over the years "to screen candidates, help them get elected, then keep hands off."
OEA does not keep their hands off of the workings of the STRS Board and this article shows that they even involve themselves in opinions concerning the decisions of another Board of the state retirement systems. When these comments openly appear in a mag aimed at teachers, I see an effort to influence readers. What influences does OEA exert that we do not see!
You also stated that "Similarly, OEA was loyal-perhaps to a fault- in their support of our previously endorsed candidates, some of which may not have deserved it." I think 'was' is a key word in your quote. You should not have used 'was' for that is past tense and OEA is STILL loyal to a fault to their endorsed members of the Board. Bill L. openly praised Mr. Billirakis profusely at the October Board meeting and told the crowd that Mike was a man to be emulated. I don't think so in the light of what I know about this past Board member.
I for one will not be swayed by your comments to leave Conni Ramser and Steve Puckett alone. I also will put some energy into getting legislative support for the health care 5%.
Shirlee Zerkel

John Curry: From $4 to Free!

From John Curry, November 1, 2006
Subject: From $4 to Free!
Just so happens that my generic blood pressure Rx is on the Wally World list for $4 and my wife's sugar Rx is also on the Wally World for $4. But, it even gets better, the Meijer store (in Lima) will honor the Rx's on Wally World's list BUT THE PRICE THERE IS $0 (as in Free). Why is this happening? Walmart wants business AND wouldn't mind if they put the other stores out of business, would they? The other stores (Meijers and Target) want Walmart's business and really wouldn't mind if Walmart went out of business. Who does this "put a ding" in...... the PBM's! Do I hear anybody out there shedding a tear for the PBM's? Now, CVS and Caremark merge, and probably there will be some more mergers because of Wally World's $4 a pop Rx. When will it end? Probably in a few years when just a few major competitors are left and then you'll see the darndest "price fixing" known to man. Then, we'll be paying through the nose again. Enjoy the ride while you can. John

CVS Buying Caremark for About $21.2B

Customers take advantage of the drive through pharmacy window outside a CVS drug store in a Bainbridge Twp., Ohio file photo from Aug. 3, 2006. Prescription benefits manager Caremark Rx Inc. and drugstore chain CVS Corp. said they are in talks about a combination of the companies. The companies said in a statement that they are discussing a possible "merger of equals" transaction. (AP Photo/Amy Sancetta, File) (Amy Sancetta - AP)
CVS Buying Caremark for About $21.2B

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.

© 2006 The Associated Press

Wednesday, November 01, 2006

Molly fires back: Please, don't say to us: 'Billirakis told us not to meddle in STRS business so we didn't'

From Molly Janczyk, November 1, 2006
Subject: Fw: HCA Proposal
I guess we were born yesterday and or are plain stupid.
"The advice that came from Billirakis and later from Allen was not to meddle in STRS business." Wow! You hear stuff is going on and you follow that advice. Of course Billirakis said not to meddle. Of course OEA said not to: Story goes that they couldn't get to Dyer fast enough to make him Exec. Direc. and he created the entitlement attitude. OEA is steps away. Don't meddle when it is an OEA dominated board? Entitlement exists, misspending, perks and pleasures beyond any educator's dreams. I can't believe that this is actually written down as if it were logical reasoning. Yes, OEA has done some wonderful things for educators and continues to do so. But, sometime, someone, step up and stop excusing behavior that is not excusable.
Ensure your board members make nice with all board members. Anyone can disagree; not the point. NO ONE should disagree about signing contracts without seeing them first. NO ONE should be paying for things that don't look right or for staff legal fees or give carte blanche to Damon, Dyer's rt hand man. Dyer wanted out of the HC business which is why OEA didn't pursue getting this done years ago agreeing with Dyer, it was not necessary.
Take responsibility. Reach out for common solutions and stop thinking that collaborative efforts mean we collaborate with you but you don't have to with us and we should as Conni put it: "Shut up!" That is not collaboration ; that is old business as usual.
Lead by example. Show the way. Welcome all to the table, for real! Lose the attitude and the mindset and set the stage for how do we get this done to the satisfaction of everyone on every issue.

But, please, don't say to us: "Billirakis told us not to meddle in STRS business so we didn't." Wow.

Sondra Stratton: News about Caremark and CVS

From Sondra Stratton, November 1, 2006
Subject: Caremark and compete with Wal-Mart!!!!!

Heard on the news this evening that either Caremark bought out CVS or visa versa so they can compete for business with .....get this.....WAL MART!!!!! I think this the best thing to happen in the HC business for YEARS!!!!!! Maybe now we can stick to the ones who have been sticking it to us for YEARS!!!!!!!!! This just might work to bring all those prices down. If I were Caremark, I would be contacting STRS like last month to try to renegotiate those generic prices!!!!!!!!! I can't wait. I can get about 3-4 meds cheaper by using Wal-Mart and you can believe I am going to take advantage of it!!!!

Jim K. and (Name withheld): The HCA Proposal conversation continues

One correspondent's material was removed at the writer's request; the rest was left intact. Kathie Bracy, 11/02/06
From Jim Kimmel to xxx, November 01, 2006
Subject: Re: HCA Proposal
1. If OEA selected the candidates and often without opposition then OEA needs to improve their selection criteria and procedures.
2. Your statement that Dr. Leone was not "persuasive" enough is ridiculous. He is out gunned 11-2 on every issue. Even the greatest orator in the world could not change the minds of these people!
3. OEA has opposed Leone from the start. Don't damn him with faint praise.
4. I can see your opinion is really oppositional to mine so I won't prolong this discussion. Things need to change at STRS. It seems to me now that the kitchen is getting hot. You are hanging your board members at STRS out to dry in the wind by stating that they make their own decisions. Maybe that is why so many are resigning.
5.If OEA is so disinterested in the affairs of STRS and takes no active role then stop being the conduit of board candidates, approving certain candidates in Ohio Schools. Endorse no one. Just publish the bio and philosophy of each one who is running and leave it at that.
6. Are you saying that your endorsed candidate gets that endorsement without agreeing to "go along to get along?"
7.You are welcome to your opinions but I don't see much to agree with in your statements. That is all I have to say.
Jim Kimmel

Donna Seaman to Conni Ramser: Time for you to step down

From Donna Seaman, November 1, 2006
Conni, I must add my voice to those of other retired educators who are upset and concerned about the continued shenanigans of the STRS board. To begin, though, you need to know that I am excluding Dennis Leone and John Lazares because they are, apparently, the ONLY two STRS board members who are sincerely concerned and interested in the welfare of Ohio's educators.
Conni, you and the remainder of the STRS board, and the STRS administration, Damon Asbury et al (Damon is just Herb Dyer's look-alike!) are still totally focused on YOURSELVES, not retired Ohio educators! If ever you consider making any cuts, it is to cut benefits for us, the real beneficiaries of STRS funds, instead of looking where you should be looking: STRS operating expenses, STRS board expenditures for perks, fringes, overnights, frivolous contracts like $315,000 to Ferguson to find real estate personnel!
STRS cut the 13th check for retirees but continues to pay a 13th type check/bonus to STRS staff! How can you justify that?
You MUST stop putting down Dr. Leone and Mr. Lazares. You MUST instead, respect and value their input because it reflects the frustrations most of us are feeling. They TRULY represent retired educators and are TRULY trying to change the STRS status quo. As board chair, you MUST encourage Leone and Lazares (not shut them up) to lead the board toward frugal and conservative changes in spending and operations. I, also would like to add my voice to those who are encouraging you to step down from the STRS board. Thank you.
Donna Seaman,
Shelby, Ohio

RH Jones: The November 7 election

From RH Jones, October 31, 2006
Subject: Our main focus: the Nov. 7 election!
To all:
As one who has been in this cause to improve our retirement system from several years back, I would like to ask all of you educators to focus the next few days on getting public education friendly political candidates elected to office. If we fail to do so, expect our worst nightmare:
#1. The employer/employee 5% contribution increase will have no chance of passing.
#2. Any kind of support for our HC/Rx will be lost.
#3. To keep us up with inflation, there will be no future Ad Hocs increases to our base.
#4. The 13th check will be further curtailed.
#5. The installation of even more unethical & unscrupulous STRS board members intent on violating the spirit of ORC 3307.15
#6. Less money to procure the best STRS employees
#7. More privatization of schools & colleges
#8. Etc. Etc. & Etc.
For almost 200 years our public schools/colleges in Ohio, and the nation, have successfully taught our youngsters to evolve into world leaders in the cause of freedom, democracy and productivity. At the moment, we can not, and should not, be distracted from our task. We need to maintain our focus. AFTER THE ELECTION, we can make the time to deal with those at the STRS board, & management, that would continue unethical conduct & mismanagement of our existing funds. With education friendly politicians in office, we can expect a better future at our STRS; in fact, there will be a better future for everyone. It will then be easier to deal with the few scoundrels at our STRS.
Do not miss the opportunity that we have as educated Americans to make positive change. We are indeed, still teachers.
RHJones, retired OH STRS member

Some words for Ms. Ramser from a southern Ohio 'malcontent'

From Duke Snider, November 1, 2006
Subject: Re: Quote
Ms Ramser,
I hope you received and read the entire article from the Canton Repository. You know Ms. Ramser, being one of the malcontents from southern Ohio, I ain't too smart about that English, but I thought you were in error when you used the word "was", you know when you said, "If he was a student...". Well not being too smart I checked with one of them English teachers and they said, "It should have been 'were', because when stating something contrary to fact the subjunctive mood 'were' is used." After reading all them fancy words, I almost had a headache. By the way, I was wondering what college you went to and did you finish? A bunch of us from southern Ohio will be attendin' the STRS meeting Nov. 16 so we can hear you readin' your letter of resignation. See you-all then.
Duke Snider, you know one of those Billy Bobs and malcontents from southern Ohio---we may not have to much smarts, but we know right from wrong

Molly Janczyk to Mark Meuser: What are Tim Daugherty's strengths, expertise?

From Molly Janczyk, November 1, 2006
Subject: Tim Daugherty
Mark, I see you have nominated a Tim Daugherty for the vacant seat on the STRS Board. May I ask his history regarding qualifications for the Board? What specific expertise does he offer which will help with oversight, investment insight and business tactics?
I realize most don't come with these qualifications but membership is tired of long learning periods and little understanding of or experience with Board practice, real interaction and hard work toward solutions vs. politics and grandstanding or simply uninformed.
Please help us with his strengths to hit the ground running so we can make progress ASAP and ability to be open and accepting toward all ideas and think creatively to make things happen for membership.
Why Tim Daugherty? We have heard Tom Hall's expertise many times. Tai Hayden was presented a while back and info is easily found and obtained. I cannot find anything on Tim Daugherty except he works for Steubenville Schools as a Counselor which we knew from his entry.
Is Tim associated with OEA serving as a member of a committee or office or board or any capacity other than member?
There is no doubt, Conni and probably Puckett will support your candidate. We would like to know something about him.
Thank you,
Molly Janczyk

Tuesday, October 31, 2006

From Dennis Leone: STRS Board member nominations for candidates to fill Michael Billirakis' unfinished term

From Dennis Leone, October 31, 2006
Here are the nominees of Board members:
Jeff Chapman nominated Tai Hayden, Columbus City Schools Teacher
Mary Ann Cervantes concurred with the Hayden recommendation
Dennis Leone nominated Tom Hall
John Lazares concurred with the Hall recommendation.
Mark Meuser nominated Tim Daugherty, Steubenville City Schls Guidance Counselor
Conni Ramser did not recommend anyone
Steve Puckett did not recommend anyone
Geoffrey Meyers did not recommend anyone
The vote will be taken on November 16.
Dennis Leone

Jim Kimmel and (Name withheld) a conversation on HCA proposal, with comments from Molly

Note: One correspondent's material was removed at the writer's request; the rest is left intact. Kathie Bracy, 11/02/06
From Molly Janczyk, October 31, 2006
Subject: Re: HCA Proposal
Getting the right people on the board with the right attitude is essential to getting HC legislation passed. Leone and Lazares have both commented and Damon was told that legislators want to see the STRS Board attempting to do the right things -- I believe that has a lot to do with attitudes of some Board members trying to stand in the way of monitoring costs, expenses and contracts. If we act irresponsibly, HC legislation will never pass. Look to yourselves for who is standing in the way and looking badly to legislators.
CORE cannot act as though things are being done correctly when they are not just to please some OEA individuals who never ever think they are wrong. Ramser and Puckett have acted irresponsibly and not in accordance to ORC:3307.15 by their decisions and actions listed many times. To excuse this looks like business as usual and we want legislators to KNOW we are doing the very best we can to make sure the STRS Board oversees funds membership properly.
AT SOME POINT certain OEA persons need to look in the mirror instead of to others to accept THEIR part of the responsibility instead of forever rationalizing it and blaming everyone else. If you want to show collaboration, ALWAYS and without FAIL, do the transparent and RIGHT THING! IT IS VERY SIMPLE!
Quit making excuses and get on "BOARD" with honesty and doing the rt thing. Silly excuses and reasons were given for not voting to limit Damon, voting without documents, approving legal costs of staff and using credit cards secretly AGAIN!
Just stop it and come down off that pedestal ! IN CASE YOU HAVEN'T NOTICED: NO ONE IS LOOKING AT YOU! They are looking at and listening to real leaders.
I don't want to engage in days of excuses. Just do the right thing. Ramser and Puckett have not according to membership.
You want a unified picture, you know how to get it. Make it happen. Others are very cordial and work collaboratively with no problems with anyone but some OEA'ers. No problems discussing with anyone else. What does that tell you? WHY? Open minds and real wishes to work together. Further evidence, it is YOUR problem, not ours.
Molly J.
Jim Kimmel to xxx, October 31, 2006
Subject: Re: HCA Proposal
It really does seem that someone influenced these convicted board members to take advantage as they did of STRS retirees, including Herb Dyer. I really don't believe that all the waste and all the condescending attitude came from individuals acting on their own. Just what is the relationship between OEA and OEA backed board members? All I know is that once I retired, after paying dues for 30 plus years, OEA turned its back on me and seems to be working against retirees.
As far as personalities are concerned, I do look at attitudes of many of them who are voting for ridiculous things like no written material on issues up for a vote and working against the common sense proposals of Lazares and Leone. And Ms Ramser's statement that she had not read and would not read Leone's 13 page report is just plain wrong. It tells me she came on board with a predetermined agenda -- an agenda given to her by someone -- and my finger is pointed at OEA.
Quite honestly, xxx, if the OEA has no interest in helping retirees then OEA should stay out of the whole process. I know how much OEA opposed Dennis Leone's efforts and that speaks volumes.By the way, whose idea was it to give Damon a contract extension and, for that matter, hire him with a contract without any national search yet when some real estate experts are needed the board spent over 300,000 dollars for a head hunter ? Why no head hunter, if it such a good idea when Dyer was fired ? If Dyer was so bad why hire his assistant who would likely have the same basic approach regarding retirees ?
I do hope we can all work together but first OEA needs to get on the right page regarding retirees -- and that page is the one on which is written ORC 3307.15. It is my opinion that CORE is working on many things. But when 7 STRS members (and Dyer) have been convicted and several more ( I can't keep up with the numbers) have resigned instead of trying to make needed changes attention must be paid to what kind of person is on the board. I just hope the puppet show will soon be over
Jim Kimmel
From Jim Kimmel, 10/30/06
By the way, just call me "Jim"- Thanks for the information. I really hope that can pass because the 5% all going to the health care fund should help.

Congratulations (again) to Paul Kostyu

Copley Columbus writer wins award
Canton Repository, October 31, 2006
COLUMBUS Copley Columbus Bureau Chief Paul E. Kostyu has won a third place in the Society of Environmental Journalists Awards.

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.

It may be Halloween, but this is a lot scarier

From Ryan Holderman, October 31, 2006

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."

Larry KehresMount Union Collge
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