The New Cost Of H.C.R.
AT&T
AT&T Inc. will book $1 billion in first-quarter costs related to the health care law signed this week by President Obama, the most of any US company so far.
A change in the tax treatment of Medicare subsidies triggered the noncash expense, and the company will consider changes to the benefits it offers current and retired workers, AT&T said yesterday in a regulatory filing.
John Deere
John Deere & Co. said Thursday the health-care reform act signed into law this week will cost the company an extra $150 million this year.
The bulk of the costs will come in the second quarter, Deere said. The amount was not included in the company's 2010 guidance issued earlier this year that called for net revenue of $1.3billion.
Caterpillar
And late yesterday, Caterpillar estimated it will incur expenses of $100 million after taxes.
3M
NEW YORK, March 26 (Reuters) - 3M Co will record a one-time non-cash charge of up to $90 million, or 12 cents a share, in the first quarter as a result of the U.S. health reform signed into law this week, the company said on Friday.
Verizon
This week, Verizon Communications Inc. sent a letter to employees suggesting that changes to their health plans could be afoot. AT&T and Verizon are the two largest phone companies in the U.S. and employ a substantial number of unionized workers.
Several million retirees are estimated to receive drug benefits from a few thousand companies. If those retirees were shifted to the federal Medicare program, the government would pick up the expense. It is unclear whether savings from the elimination of the subsidy would offset those higher Medicare costs.
So, what is the White House reaction to all of this? They chose to try to intimidate and muzzle those who come out and state their losses. But perhaps one of the most stunning things about this is an account from a lobbyist who sat down with President Obama to explain these losses.
"Most of these people [in the Administration] have never had a real job in their lives. They don't understand a thing about business, and that includes the President," says a senior lobbyist for one of the companies that announced the charge. "My CEO sat with the President over lunch with two other CEOs, and each of them tried to explain to the President what this bill would do to our companies and the economy in general. First the President didn't understand what they were talking about. Then he basically told my boss he was lying. Frankly my boss was embarrassed for him; he clearly had not been briefed and didn't know what was in the bill."
This won't surprise those who have followed Obama, and realize that the man has never run so much as a lemonade stand. His ObamaBot followers, of course, will be shocked by such a report if they even decide to read it. This, of course, would be followed by denial. But here is a fact. While the White House attacks companies for coming out and stating what their losses are based on this new law, they are ignoring the fact that they are legally required to do so.
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.
Either way, the Obama War On Wealth continues in full swing. Ironically, destroying jobs, wealth, and the economy seems to be the only thing that this man is capable of.
