It's been a banner week for Democrats: ObamaCare passed Congress in its final form on Thursday night, and the returns are already rolling in. Yesterday AT&T announced that it will be forced to make a $1 billion writedown due solely to the health bill, in what has become a wave of such corporate losses.
This wholesale destruction of wealth and capital came with more than ample warning. Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or "political." Perhaps that explains why the Administration is now so touchy. Commerce Secretary Gary Locke took to the White House blog to write that while ObamaCare is great for business, "In the last few days, though, we have seen a couple of companies imply that reform will raise costs for them." In a Thursday interview on CNBC, Mr. Locke said "for them to come out, I think is premature and irresponsible."
Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."
In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don't like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.
On top of AT&T's $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.
As Joe Biden might put it, this is a big, er, deal for shareholders and the economy. The consulting firm Towers Watson estimates that the total hit this year will reach nearly $14 billion, unless corporations cut retiree drug benefits when their labor contracts let them.
Meanwhile, John DiStaso of the New Hampshire Union Leader reported this week that ObamaCare could cost the Granite State's major ski resorts as much as $1 million in fines, because they hire large numbers of seasonal workers without offering health benefits. "The choices are pretty clear, either increase prices or cut costs, which could mean hiring fewer workers next winter," he wrote.
The Democratic political calculation with ObamaCare is the proverbial boiling frog: Gradually introduce a health-care entitlement by hiding the true costs, hook the middle class on new subsidies until they become unrepealable, but try to delay the adverse consequences and major new tax hikes so voters don't make the connection between their policy and the economic wreckage. But their bill was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.
--------- Forwarded message ----------
From: Janet Levy
Date: Fri, Mar 26, 2010 at 11:33 PM
Obama got his army in this bill!
This is a copy of the Senate bill that was approved Sunday night. Pg 1312 is the forces.
IT LOOKS LIKE B.O. JUST GOT HIS OWN PRIVATE ARMY.
SEC. 430. ESTABLISHING A READY RESERVE CORPS.
Section 203 of the Public Health Service Act (42 U.S.C. 204) is amended to read as follows:
SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.
(1) IN GENERAL.—There shall be in the Service a commissioned Regular Corps and a Ready Reserve Corps for service in time of national emergency.
(2) REQUIREMENT.—All commissioned officers shall be citizens of the United States and shall be appointed without regard to the civil-service laws and compensated without regard to the Classification Act of
1923, as amended.
(3) APPOINTMENT.—Commissioned officers of the Ready Reserve Corps shall be appointed by the President and commissioned officers of the Regular Corps shall be appointed by the President with the advice and
consent of the Senate.
(4) ACTIVE DUTY.—Commissioned officers of the Ready Reserve Corps shall at all times be subject to call to active duty by the Surgeon General, including active duty for the purpose of training.
(5) WARRANT OFFICERS.—Warrant officers may be appointed to the Service for the purpose of providing support to the health and delivery systems maintained by the Service and any warrant officer appointed to the Service shall be considered for purposes of this Act and title 37, United States Code, to be a commissioned officer within the Commissioned Corps of the Service.
(b) ASSIMILATING RESERVE CORP OFFICERS INTO THE REGULAR CORPS.—Effective on the date of enactment of the Affordable Health Choices Act, all individuals classified as officers in the Reserve Corps under this section (as such section existed on the day before the date of enactment of such Act) and serving on active duty shall be deemed to be commissioned officers of the
(c) PURPOSE AND USE OF READY RESERVE.—
(1) PURPOSE.—The purpose of the Ready Reserve Corps is to fulfill the need to have additional Commissioned Corps personnel available on short notice (similar to the uniformed service’s reserve program) to assist regular Commissioned Corps personnel to meet both routine public health and emergency response missions.
(2) USES.—The Ready Reserve Corps shall—
(A) participate in routine training to meet the general and specific needs of the Commissioned Corps;
(B) be available and ready for involuntary calls to active duty during national emergencies and public health crises, similar to the uniformed service reserve personnel;
(C) be available for backfilling critical positions left vacant during deployment of active duty Commissioned Corps members, as well as for deployment to respond to public health emergencies, both foreign and domestic; and
(D) be available for service assignment in isolated, hardship, and medically underserved communities (as defined in section 399SS) to improve access to health services.
(d) FUNDING.—For the purpose of carrying out the duties and responsibilities of the Commissioned Corps under this section, there are authorized to be appropriated such sums as may be necessary to the Office of the Surgeon General for each of fiscal years 2010 through 2014. Funds appropriated under this subsection shall be used for recruitment and training of Commissioned Corps Officers.
You can read the bill here. This part starts on pg. 1312.
Comment: This blog has also warned of the horrific damage this bill will have upon the businesses in the USA. None of this is new. The response by the Democrats? We, the messengers are wrong, being political even hateful. Never mind to realize our facts are correct. Now, I can only perceive that this Administration has a business agenda far different from the way we have always done business-what other conclusion can one have short of ignorance and arrogance?
Guest Comment: We are now waking up to the monstrosity of Obamacare and finding out, as Pelosi informed us, what is in it. Corporations, as employers, are being hit with long-term health liabilities, including a higher tax burden. This will all be passed on to the consumer. Nothing is free. And what the hell does an army of Reserve Corp have to do with national health insurance? Before we know it, he will declare himself the omnipotent ruler, the Constitution be damned. Aggie