Italians head to polls in crucial vote for euro zone

ROME (Reuters) - Italians vote on Sunday in one of the most closely watched elections in years with markets nervous about whether it will produce a strong government to pull Italy out of recession and help resolve the euro zone debt crisis.

A huge final rally by anti-establishment-comedian-turned-politician Beppe Grillo on Friday before a campaigning ban kicked in has highlighted public anger at traditional parties and added to uncertainty about the election outcome.

Polling booths will open between 02:00 am-04:00 pm EST on Sunday and 01:00 am-09:00 am EST on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.

The election will be followed closely by financial markets with memories still fresh of the potentially catastrophic debt crisis that brought technocrat Prime Minister Mario Monti to power more than a year ago.

Italy, the euro zone's third-largest economy, is stuck in deep recession, struggling under a public debt burden second only to Greece's in the 17-member currency bloc and with a public weary of more than a year of harsh austerity policies.

Italy's Interior Ministry has urged some 47 million eligible voters to not let bad weather forecasts put them off, and said it was prepared to handle even snowy conditions in some northern regions to ensure everyone had a chance to vote.

Final polls published two weeks ago showed center-left leader Pier Luigi Bersani with a five-point lead, but analysts disagree about whether he will be able to form a stable majority that can push though the economic reforms Italy needs.

Bersani is now thought to be just a few points ahead of center-right rival Silvio Berlusconi, the four-times prime minister who has promised tax refunds and staged a media blitz in an attempt to win back voters in recent weeks.

While the center left is still expected to gain control of the lower house thanks to rules that guarantee a strong majority to whichever party wins the most votes nationally, a much closer battle will be fought in the Senate, which any government also needs to control in order to be able to pass laws.

Seats in the upper house are awarded on a region-by-region basis, meaning that support in key regions can decisively influence the overall result.

Pollsters still believe the most likely outcome is a center-left government headed by Bersani and possibly backed by Monti, who is leading a centrist coalition.

But strong campaigning by Berlusconi and the fiery Grillo, who has drawn tens of thousands to his election rallies, have thrown the election wide open, causing concern that there may be no clear winner.

Whatever government emerges from the vote will have the task of pulling Italy out of its longest recession for 20 years and reviving an economy largely stagnant for two decades.

The main danger for Italy and the euro zone is a weak government incapable of taking firm action, which would rattle investors and could ignite a new debt crisis.

Monti replaced Berlusconi in November 2011 after the euro zone's third-largest economy came close to Greek-style financial meltdown while the center-right government was embroiled in scandals.

The former European Commissioner launched a tough program of spending cuts, tax hikes and pension reforms which won widespread international backing and helped restore Italy's credibility abroad after the scandals of the Berlusconi era.

Italy's borrowing costs have since fallen sharply after the European Central Bank pledged it was prepared to support countries undertaking reforms by buying unlimited quantities of their bonds on the markets.

But economic austerity has fuelled anger among Italians grappling with rising unemployment and shrinking disposable incomes, encouraging many to turn to Grillo, who has tapped into a national mood of disenchantment.

(Reporting by Catherine Hornby; Editing by Jason Webb)

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Britain's top Catholic in 'inappropriate acts' row: report

LONDON: Britain's most senior Roman Catholic cleric, who is due to vote on Pope Benedict XVI's successor, has been reported to the Vatican over claims of inappropriate behaviour, the Observer reported on Sunday.

Cardinal Keith O'Brien, leader of the Catholic Church in Scotland, contests allegations by three priests and a former priest which were sent to Rome a week before Pope Benedict's resignation on February 11.

The four claimants, from the diocese of St Andrews and Edinburgh in Scotland, reported to nuncio Antonio Mennini, the Vatican's ambassador to Britain, that O'Brien had committed "inappropriate acts" going back 33 years.

One priest claims he received unwanted attention from the cardinal after a late-night drinking session. Another alleges that O'Brien used night prayers as cover for inappropriate contact, according to the paper.

O'Brien has a vote in the forthcoming papal conclave.

The claimants, who are demanding the cleric's resignation, are worried that their report will not be properly addressed if he is allowed to travel to Rome.

"It (the church) tends to cover up and protect the system at all costs," said one of the complainants, according to quotes published by the Observer newspaper.

"The church is beautiful, but it has a dark side and that has to do with accountability. If the system is to be improved, maybe it needs to be dismantled a bit."

O'Brien, who is due to retire next month, has angered the gay community with his conservative stance on homosexuality. He was named "bigot of the year" last year by the rights charity Stonewall.

He recently said that same-sex marriages would be "harmful to the physical, mental and spiritual well-being of those involved" and has long voiced opposition to gay adoption.

- AFP/jc

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Stuck to rubber, terrorists let go of gun

AGARTALA: Ranjit Debbarma still remembers the day 11 years ago when, as an area commander with banned terrorist group NLFT, he trekked for two months -- from the Jampui hills to Rangamurra and then to border areas of Bangladesh before finally reaching Burma -- to carry back Ak 47, 56, M 16 and SK guns for the insurgency back home in Tripura.

Today, though, the 37-year-old can be seen going from one rubber tree to another, collecting latex and talking to his labourers in the plantation at Jarul Bachai, about 13 km from Agartala. His daughter is in an English school and he now wants to buy a motorbike so that it's easier for him to drop her to class every day.

"We were safe in the camps of both Bangladesh and Burma then," the National Liberation Front of Tripura guerrilla says, squinting under an unusually bright February sun. "But I now realize that we were misled. I spent six years of my life carrying arms and collecting protection money from terrified people. We were told Tripura should be for its indigenous people and that even our king has been dispossessed by the Bengalis who came here much after we did. We had taken this falsehood as religion. Rubber is the only thing that matters to me now, my only god."

Tripura's burgeoning rubber trade, which has grown from a cultivable area of just 3500 hectares in 1982 to a massive 57,620 hectares in 2012, has changed the life of Debbarma and hundreds of other former militants like him in Tripura. A senior Rubber Board official puts the number at 754. "I have personally trained 60 of them," he says. "This has been a major rehabilitation effort, and I would go to the extent of saying it helped curb insurgency. People like Debbarma will always be grateful to the CPM government for this, if nothing else."

A state done in by lack of connectivity with the rest of the country and an even greater absence of industry, Tripura has been quick to latch on to rubber, spreading fear in many that the way things are going no one will be cultivating anything else in the near future. "Now it is second only to Kerala in terms of production," says Madhu Chatterjee, who has around 100 kanis (6.25 kanis make a hectare) devoted to the crop. "More than 50,000 farmers are involved in this these days as the returns are very high - a kg goes for Rs 210 on an average and profits can be more than Rs 100 - and the state has just the kind of weather that suits this thing. Even those with very little money can invest in it."

A rubber board official, who doesn't want to be named, says that the government is still reluctant to come clean regarding the names or numbers of former rebels who have either been given money to invest in rubber or have been provided small patches of land. "Most of those who came for training used their nom de guerre and went away leaving behind their nom de guerre," he says, adding, "I think we are better off not knowing who they really were, how many they killed and how many lives they ruined. That was the quid pro quo - give us a new life and we'll leave you in peace."

Back in Debbarma's field, he says he knows at least ten others like him who are leading normal lives, stuck to latex, and working as farmers and plantation managers. "If every government helps terrorists in this way, few will pick up the gun,'' he says. "After all, it is only us poor who because of hunger and penury are easy targets for recruitment. You can brainwash easily a man with no food on his table."

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Fiery Last-Lap Daytona Crash Injures 28 Fans

A fiery last-lap crash at the Daytona International Speedway injured a number of spectators today, who were seen being carried away from the stands on stretchers.

A total of 28 fans were injured, with 14 transported to hospitals and 14 treated at the speedway, Dayton president Joie Chitwood III. All NASCAR drivers involved in the crash have been treated and released, Chitwood said.

ESPN reported that one of the spectators taken to the hospital was on the way to surgery with head trauma.

The 12-car crash happened moments before the end of the Nationwide race, and on the eve of the Daytona 500, one of NASCAR's biggest events.

The crash was apparently triggered when driver Regan Smith's car, which was being tailed by Brad Keselowski on his back bumper, spun to the right and shot up the track. Smith had been in the lead and said after the crash he had been trying to throw a "block."

Rookie Kyle Larson's car slammed into the wall that separates the track from the grandstands, causing his No. 32 car to go airborne and erupt in flames.

When a haze of smoke cleared and Larson's car came to a stop, he jumped out uninjured.

His engine and one of his wheels were sitting in a walkway of the grandstand.

"I was getting pushed from behind," Larson told ESPN. "Before I could react, it was too late."

Driver Michael Annett was taken to the hospital after he slammed head-on into a barrier during the chaos. NASCAR officials told ESPN the driver was awake and alert.

Tony Stewart pulled out the win, but in victory lane, what would have been a celebratory mood was tempered by concern for the injured fans.

"We've always known this is a dangerous sport," Stewart said. 'But it's hard when the fans get caught up in it."

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FDA approves new targeted breast cancer drug

WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.

The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.

Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.

"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."

Cobleigh helped conduct the key studies of the drug at the Chicago facility.

The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.

The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.

Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.

FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.

Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.

FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer

Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.

Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.

Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.

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Abe vows to revive Japanese economy, sees no escalation with China

WASHINGTON (Reuters) - Japanese Prime Minister Shinzo Abe told Americans on Friday "I am back and so is Japan" and vowed to get the world's third biggest economy growing again and to do more to bolster security and the rule of law in an Asia roiled by territorial disputes.

Abe had firm words for China in a policy speech to a top Washington think-tank, but also tempered his remarks by saying he had no desire to escalate a row over islets in the East China Sea that Tokyo controls and Beijing claims.

"No nation should make any miscalculation about firmness of our resolve. No one should ever doubt the robustness of the Japan-U.S. alliance," he told the Center for Strategic and International Studies.

"At the same time, I have absolutely no intention to climb up the escalation ladder," Abe said in a speech in English.

After meeting U.S. President Barack Obama on his first trip to Washington since taking office in December in a rare comeback to Japan's top job, he said he told Obama that Tokyo would handle the islands issue "in a calm manner."

"We will continue to do so and we have always done so," he said through a translator, while sitting next to Obama in the White House Oval Office.

Tension surged in 2012, raising fears of an unintended military incident near the islands, known as the Senkaku in Japan and the Diaoyu in China. Washington says the islets fall under a U.S.-Japan security pact, but it is eager to avoid a clash in the region.

Abe said he and Obama "agreed that we have to work together to maintain the freedom of the seas and also that we would have to create a region which is governed based not on force but based on an international law."

Abe, whose troubled first term ended after just one year when he abruptly quit in 2007, has vowed to revive Japan's economy with a mix of hyper-easy monetary policy, big spending, and structural reform. The hawkish leader is also boosting Japan's defense spending for the first time in 11 years.

"Japan is not, and will never be, a tier-two country," Abe said in his speech. "So today ... I make a pledge. I will bring back a strong Japan, strong enough to do even more good for the betterment of the world."

'ABENOMICS' TO BOOST TRADE

The Japanese leader stressed that his "Abenomics" recipe would be good for the United States, China and other trading partners.

"Soon, Japan will export more, but it will import more as well," Abe said in the speech. "The U.S. will be the first to benefit, followed by China, India, Indonesia and so on."

The United States and Japan agreed language during Abe's visit that could set the stage for Tokyo to join negotiations soon on a U.S.-led regional free trade agreement known as the Trans-Pacific Partnership.

In a carefully worded statement following the meeting between Obama and Abe, the two countries reaffirmed that "all goods would be subject to negotiations if Japan joins the talks with the United States and 10 other countries.

At the same time, the statement envisions a possible outcome where the United States could maintain tariffs on Japanese automobiles and Japan could still protect its rice sector.

"Recognizing that both countries have bilateral trade sensitivities, such as certain agricultural products for Japan and certain manufactured products for the United States, the two governments confirm that, as the final outcome will be determined during the negotiations, it is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations," the statement said.

Abe repeated that Japan would not provide any aid for North Korea unless it abandoned its nuclear and missile programs and released Japanese citizens abducted decades ago to help train spies.

Pyongyang admitted in 2002 that its agents had kidnapped 13 Japanese in the 1970s and 1980s. Five have been sent home, but Japan wants better information about eight who Pyongyang says are dead and others Tokyo believes were also kidnapped.

Abe also said he hoped to have a meeting with new Chinese leader Xi Jinping, who takes over as president next month, and would dispatch Finance Minister Taro Aso to attend the inauguration of incoming South Korean President Park Geun-hye next week.

(Additional reporting by Jeff Mason and Doug Palmer; Editing by David Brunnstrom and Paul Simao)

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US budget cuts can be avoided: Obama

WASHINGTON: President Barack Obama insisted Friday that mandatory government budget cuts set to kick in on March 1 -- known as the sequester -- were not "inevitable."

The cuts to defence and domestic spending were mandated in an agreement between Obama and his Republican foes to end a previous budget battle.

"I never think that anything is inevitable, we always have the opportunity to make the right decisions," Obama told reporters following a White House meeting with visiting Japanese Prime Minister Shinzo Abe.

"Hope springs eternal."

The consequences of the threatened sequester were supposed to be so punishing that Democrats and Republicans would have no choice but to reach a deal to reduce the deficit.

Obama also attempted to reassure financial markets in case the cuts do go forward.

"Unlike issues like the debt ceiling, the sequester going into effect will not threaten the world financial system, it's not the equivalent of the US defaulting on its obligations," Obama said.

"What it does mean though is that if the US is growing slower, other countries are growing slower."

Obama wants to use a "balanced" mix of spending cuts and tax revenue increases achieved by closing loopholes used by the wealthy to cut the US deficit, and says he will not sign a bill that harms the middle class.

Republicans, who lost a previous showdown with Obama over raising tax rates for the rich, say the debate over hiking taxes is closed.

They say they are willing to close loopholes, but only in the context of a sweeping reform of the tax code, and maintain that Obama wants to use proceeds from any immediate revenue rises for more bloated government spending.

Hundreds of thousands of public employees and private contractors are threatened by the cuts.

- AFP/jc

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Hyderabad, hotbed of home-grown terror, under lens

NEW DELHI: For the veterans of security establishment the bomb blasts have revived concerns about the critical nature of Hyderabad and surroundings in the growth of home-grown terrorism in India.

Officials point out that Hyderabad has been intricately linked to the growth of the present phase of domestic terrorism. When the first definite information about Muslim youth going to Pakistan for terror camps emerged more than a decade ago, with Hyderabad resident Shahid Bilal as a key figure, the government was alarmed at the highest levels. Once India confirmed that over 60 youth have gone across to Pakistan from Andhra Pradesh and Karnataka in 2005-06 the issue was taken up with Bangladeshi and Nepalese governments because most of them were going via either of these countries.

"Even if the bombers are from outside, they have received local logistical support," says one official. "There is a history here," he says about Hyderabad's brush with blasts as well as with fringe sympathisers.

A day before the twin blasts, the National Investigation Agency (NIA) had, in fact, filed its first charge sheet in the case of Bangalore-Hubli-Nanded terror module run from Saudi Arabia by LeT-HuJI handlers. One name among the 12 accused stood out: Obaidur Rehman. The 26-year-old Hyderabad resident is the nephew of Maulana Mohammed Naseeruddin, a radical preacher presently languishing in a Gujarat jail in connection with the murder of Gujarat home minister Haren Pandya.

The charge sheet also mentioned the man handling the group from Saudi Arabia as Farhatullah Ghori, maternal uncle of slain HuJI operative Shahid Bilal. Both belong to Hyderabad.

The blasts that followed the charge sheet have only come as a grim reminder of the Andhra Pradesh capital having become a favourite recruiting ground for terror groups. In fact, the city has been in terror crosshairs for close to a decade and a half providing strong base to both LeT and HuJI.

According to intelligence agencies, Hyderabad first came on terror radar in late '90s with several radical religious organizations becoming a springboard to youth taking to terror. While there was an entrenched sense of victimhood and injustice post Babri masjid demolition among Muslims in the state, their anger was first organized and harnessed by Mohammed Abdul Shahid alias Shahid Bilal under aegis of HuJI.

The first effects of this endeavor manifested itself in the terror attack on the office of Hyderabad Special Task Force in 2003. Bilal's maternal uncle Farhatullah Ghori's name prominently cropped up in the investigations. He was also a suspect in the Akshardham Temple attack in Gujarat in 2002.

Following this, Bilal was found to be instrumental in conducting several blasts across south India between 2004 and 2007. During this period he also helped 26/11 accused and LeT operative Zabiuddin Ansari alias Abu Jundal escape to Pakistan via Bangladesh along with his associate Fayyaz Kagzi after the 2006 Aurangabad arms haul in Maharashtra. In October 2007, Bilal was himself killed in Karachi along with his brother Samad. However, sources say, he has five more brothers who are in Pakistan and elsewhere. And the network he has left behind across India, Pakistan and Saudi Arabia keeps recruiting people for Jihadi activities.

In 2008, Maulana Naseeruddin's son, Riyazuddin Nasir, was arrested in Dharwad, Karnataka for planning to carry out terror strikes in the state. In 2012, with Obaidur Rehman's arrest in the Bangalore terror module, the city again struggled to shake off the terror tag.

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Jodi Arias' Friends Believe in Her Innocence

Accused murderer Jodi Arias believes she should be punished, but hopes she will not be sentenced to death, two of her closest friends told ABC News in an exclusive interview.

Ann Campbell and Donavan Bering have been a constant presence for Arias wth at least one of them sitting in the Phoenix, Ariz., courtroom along with Arias' family for almost every day of her murder trial. They befriended Arias after she first arrived in jail and believe in her innocence.

Arias admits killing her ex-boyfriend Travis Alexander and lying for nearly two years about it, but insists she killed Alexander in self defense. She could face the death penalty if convicted of murder.

Jodi Arias Testimony: Prosecution's Cross-Examination Watch Video

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Nevertheless, she is aware of the seriousness of her lies and deceitful behavior.

The women told ABC News that they understand that Arias needs to be punished and Arias understands that too.

"She does know that, you know, she does need to pay for the crime," Campbell said. "But I don't want her to die, and I know that she has so much to give back."

Catching Up on the Trial? Check Out ABC News' Jodi Arias Trial Coverage

The lies that Arias admits she told to police and her family have been devastating to her, Bering said.

""She said to me, 'I wish I didn't have to have lied. That destroyed me,'" Donovan said earlier this week. "Because now when it's so important for her to be believed, she has that doubt. But as she told me on the phone yesterday, she goes, 'I have nothing to lose.' So all she can do is go out there and tell the truth."

During Arias' nine days on the stand she has described in detail the oral, anal and phone sex that she and Alexander allegedly engaged in, despite being Mormons and trying to practice chastity. She also spelled out in excruciating detail what she claimed was Alexander's growing demands for sex, loyalty and subservience along with an increasingly violent temper.

Besides her two friends, Arias' mother and sometimes her father have been sitting in the front row of the courtroom during the testimony. It's been humiliating, Bering said.

"She's horrified. There's not one ounce of her life that's not out there, that's not open to the public. She's ashamed," she said.

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Govs to hear Oregon health care plan

SALEM, Ore. (AP) — Oregon Gov. John Kitzhaber will brief other state leaders this weekend on his plan to lower Medicaid costs, touting an overhaul that President Barack Obama highlighted in his State of the Union address for its potential to lower the deficit even as health care expenses climb.

The Oregon Democrat leaves for Washington, D.C., on Friday to pitch his plan that changes the way doctors and hospitals are paid and improves health care coordination for low income residents so that treatable medical problems don't grow in severity or expense.

Kitzhaber says his goal is to win over a handful of other governors from each party.

"I think the politics have been dialed down a couple of notches, and now people are willing to sit down and talk about how we can solve the problem" of rising health care costs, Kitzhaber told The Associated Press in a recent interview.

Kitzhaber introduced the plan in 2011 in the face of a severe state budget deficit, and he's been talking for two years about expanding the initiative beyond his state. Now, it seems he's found people ready to listen.

Hospital executives from Alabama visited Oregon last month to learn about the effort. And the U.S. Department of Health and Human Services announced Thursday that it's giving Oregon a $45 million grant to help spread the changes beyond the Medicaid population and share information with other states, making it one of only six states to earn a State Innovation Model grant.

Kitzhaber will address his counterparts at a meeting of the National Governors Association. His talk isn't scheduled on the official agenda, but a spokeswoman confirmed that Kitzhaber is expected to present.

"The governors love what they call stealing from one another — taking the good ideas and the successes of their colleagues and trying to figure out how to apply that in their home state," said Matt Salo, director of the National Association of Medicaid Directors.

There's been "huge interest" among other states in Oregon's health overhaul, Salo said, not because the concepts are brand new, but because the state managed to avoid pitfalls that often block health system changes.

Kitzhaber persuaded state lawmakers to redesign the system of delivering and paying for health care under Medicaid, creating incentives for providers to coordinate patient care and prevent avoidable emergency room visits. He has long complained that the current financial incentives encourage volume over quality, driving costs up without making people healthier.

Obama, in his State of the Union address this month, suggested that changes such as Oregon's could be part of a long-term strategy to lower the federal debt by reigning in the growing cost of federally funded health care.

"We'll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital — they should be based on the quality of care that our seniors receive," Obama said.

The Obama administration has invested in the program, putting up $1.9 billion to keep Oregon's Medicaid program afloat over the next five years while providers make the transition to new business models and incorporate new staff and technology.

In exchange, though, the state has agreed to lower per-capita health care cost inflation by 2 percentage points without affecting quality.

The Medicaid system is unique in each state, and Kitzhaber isn't suggesting that other states should adopt Oregon's specific approach, said Mike Bonetto, Kitzhaber's health care policy adviser. Rather, he wants governors to buy into the broad concept that the delivery system and payment models need to change.

That's not a new theory. But Oregon has shown that under the right circumstances massive changes to deeply entrenched business models can gain wide support.

What Oregon can't yet show is proof the idea is working — that it's lowering costs without squeezing on the quality or availability of care. The state is just finishing compiling baseline data that will be used as a basis of comparison.

One factor driving the Obama administration's interest in Oregon's success is the president's health care overhaul. Under the Affordable Care Act, millions more Americans will join the Medicaid rolls after Jan. 1, and the health care system will have to be able to absorb the influx of patients in a logistically and financially sustainable way.

The federal government will pay 100 percent of the costs for those additional patients in the first three years before scaling back to 90 percent in 2020 and beyond.

"There are a lot of governors who are facing the same challenges we're facing in Oregon," Kitzhaber said. "They recognize that the cost of health care is something they're going to have to get their arms around."

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