Curmudgeon's Corner

An Inconvenient Truth

Posted by Al Campbell on March 29, 2010

Economy, Healthcare, Political, Quality of Life, Taxes, U.S.

We have begun to hear and read about some major costs for larger companies that are resulting already from the new health care legislation.  Caterpillar reported that it will take a charge of $150 million as the result.  AT&T reported that it will take a $1 billion charge.   In total, there are some 3,500 companies that will suffer similar profit reductions or eliminations.

These charges against future profit are all related to a tax incentive that government gave companies to prompt them to pay for retiree pharmaceutical expenses thus keeping those costs away from Medicare Part D.  This saved taxpayers far more than it cost taxpayers, but that program dies as the result of ObamaCare being enacted.

SEC rules require that publicly-traded companies take such charges in the calendar quarter in which regulations change that force the charges.  ObamaCare was signed into law in the past few days, and it ends this program, so these companies are simply following the laws as they exist.

But, there are those politicians who are angered by this action.

This is a most awkward time for such an inconvenient truth to surface because the Obama Administration and the Democrat majority are taking their “victory lap” hoping to convince Americans to vote for them again in the fall elections.

Rep. Henry Waxman (D-CA) has been the Democrat “pit bull” for many years.  He sits on the House Energy and Commerce Committee and he is angry about these announcements.  He is so angry that he has issued an “invitation” for several of the top executives of these offending companies to come before him with proof that what they say is actually so. 

He has subpoenaed their e-mails and analyses and financial information so that he can have Committee staffers review them in detail to find embarrassing passages and “errors” that he can use before the cameras.  Much of this information is likely to be viewed as confidential but he will crucify the executives if they don’t comply with his edict; they know it and he knows it.  They can ill afford to face his diatribes since he controls the microphone.

This is a precursor to what we can expect to unfold as the inner sanctum of ObamaCare is brought to the fore.  The use of government’s brute force, as evidenced by Waxman’s threatening “invitation” is high political theater, but it is as offensive as anything can be.

Whether or not the crafters of ObamaCare knew of this change and decided to ignore its economic impact remains to be learned.  What is very clear is this: those who see their future election results being unfavorably influenced by such inconvenient truths are quite content to use their powers to threaten anyone that dare expose their folly…especially before the elections.

Raw politics is not a pretty thing.  This is just the beginning of this unfolding storyline.