Sunday, March 28, 2010

Democrats threaten companies hard hit by ObamaCare

On Friday, I told you about companies warning of large accounting writedowns related to the new health care law.  The executives of these blue chip American corporations are fulfilling their fiduciary responsibilities to their stockholders and their legal obligations to the Securities and Exchange commission by immediately restating their earnings to reflect changes to their long-term health care liabilities.  Remember, these are companies that voluntarily provide prescription drug coverage to their retirees, keeping them off the government-sponsored Medicare prescription plan.  And what do they get for their swift execution of their responsibilities under the law?  Threats and intimidation for their audacity (photo Susan Walsh/AP).  From Byron York at The Washington Examiner:
Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, has summoned some of the nation's top executives to Capitol Hill to defend their assessment that the new national health care reform law will cost their companies hundreds of millions of dollars in health insurance expenses. Waxman is also demanding that the executives give lawmakers internal company documents related to health care finances -- a move one committee Republicans [sic] describes as "an attempt to intimidate and silence opponents of the Democrats' flawed health care reform legislation."
Waxman's letters can be accessed here.

Who in the hell does Henry Waxman think he is?  Under what authority does the Congress summon private sector executives to Washington to explain their obvious displeasure with this disastrous legislation?  Is the United States of America turning into a gestapo state?  The Wall Street Journal expresses well my outrage and frustration:
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. [snip]

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.
It is probably no coincidence that all of the companies being called on the carpet by Congress are members of the Employers' Coalition on Medicare, an organization that lobbied for the Medicare prescription benefit and the attendant corporate subsidies.  Its membership list suggests that Waxman may be sending out a lot more letters in the coming days and weeks.

But on the bright side, it is unlikely that he will have to send one to General Motors or Chrysler.

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