By Henry Blodget (Original publication date was March 29, 2010)
The White House has rushed to try to stop a wave of companies announcing that ObamaCare will cause their healthcare insurance costs to rise, causing them to cut benefits or fire people.
At the end of last week, Secretary Gary Locke hit the WH blog to say, in effect, that these companies didn't know what they were talking about (which seems unlikely). Later, on CNBC, he suggested that they were acting unpatriotically.
And now Henry Waxman is calling Congressional hearings to beat the companies up on live TV.
For what it's worth, the day the healthcare bill was approved, we listened to the CEO of one of the biggest healthcare companies say unequivocally on NPR that ObamaCare would make premiums go up. He made it sound like the height of obviousness--and it was so obvious that the interviewer didn't even follow up on it. So the fact that companies are now warning their shareholders and employees about this fact would hardly seem to be startling news.
Could it be that the Democrats are only now discovering that ObamaCare won't actually provide more healthcare for less? Or is it just that they're angry that everyone else has noticed?
Here's the WSJ's rant on the topic:
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.