Wednesday, March 31, 2010

Rep Waxman's Flaring Nostrils

One person's loophole is another person's tax subsidy. While the poorly written health care legislation takes away a tax free subsidy to corporations - it amounts to 28% - which provides retirees with prescription drug coverage and eliminates their need to enroll for Medicare coverage. This was written into the Medicare prescription drug plan when Congress passed it in 2003. This was responsible legislation language that took a bit of stress off of the Medicare system. Keep in mind, the employers pay 72% of the plan. In order to help pay for this dreadful legislation, the Democrats took this subsidy out of the law and intend to stick corporations with the full 100% of the price of coverage.

One may ask, well, what's the big deal? It's only 28% more in increase of costs. True. But in the case of mega corporations, that 28% sure adds up. AT&T claims it will cost them $1 billion dollars. John Deere & Co. claim a $150 million hit. Valero Energy, Verizon, Caterpillar and others have come forward to voice the true costs of the legislation as it relates to the bottom line. Today, Boeing announced it will be $150 million in additional costs.

As the corporations began to publicly come forward with new numbers, the White House and the Democratically controlled Congress feigned surprise. Rep. Henry Waxman demands these corporate executives come before his committee - he chairs the House Energy and Commerce Committee - to answer questions. That means he intends to create a media circus and dramatically brow beat these job providers who are accountable to the shareholders. Waxman, who has been in office for decades, may not understand that under SEC sanction they must "immediately restate their earnings in light of their expected future retiree health liabilities" under the Financial Standard Accounting Board's 1990 statement No.106".

The White House claims it is just politics. The White House claims it is "Republican CEOs" who are stirring up trouble, instead of following the law. The White House, however, fails to point out that on the Democratic side, the AFL-CIO wrote in a December 10 letter that "eliminating it (the loophole) will be highly destabilizing for retirees who rely upon employer sponsored drug coverage" and "will impose a dramatic and immediate impact of company financial statements." Those quotes from the same Wall Street Journal article. The AFL-CIO is firmly in the Obama/Democrat camp. If they were concerned about the effects of the legislation then it can hardly be called a partisan move. Also mentioned was the opposition by the Communications Workers of America and the International Brotherhood of Electrical Workers - those who are employed by AT&T and Verizon.

The tactic continues with this White House and their water carriers in Congress to bully and name call when opposition arises. This is the result of a Chicago politician and his Chicago political support team occupying the Oval Office. Leadership cues come from the top down.

April 21 is the date set for the interrogation to begin. Waxman is known as a junkyard dog and will no doubt come loaded for bear. Here's his letter:

Rep Bart Stupak is in on the action, too. You'll remember he was exposed for the sham he is as a "pro-life" advocate from the Democratic side of the aisle. He fell like a house of cards over the bogus fix for his concerns about federal dollars allotted to abortions solved by Obama's executive order signing. He's an attorney. He's not stupid. He knows after Obama leaves office, the executive order expires. Also, Obama can rescind the executive order at any time. These two now write to the corporate CEOs and state, "The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern."

Granted, these same CEOs would be able to claim higher ground in this battle had they been publicly outspoken about the estimated costs before the legislation was passed. They were all brought into the photo op 'summits' and were not aggressively a part of the public dialogue. And, now corporations with early retirees, ages 55-64, see the same loophole/subsidy taken from them will go to this group. Democrats put that into the legislation.

It appears if the CEOs were just out for political points, the opposition would have been strongly heard during the legislative process. It appears, unfortunately, these same CEOs were giving the politicians a chance. No good deed goes unpunished.

This is further starkly presented evidence that this bad piece of legislation that puts 1/6 of our national economy in the hands of government bureaucrats will result in higher personal costs and job loss.

1 comment:

srp said...

My understanding is that the companies are REQUIRED by the Security and Exchange Commission (another FEDERAL regulatory agency) to announce to stockholders when such a loss has to be written into their balance sheet. So where does Congress get off trying to beat up on companies that are just following the laws and regulations that Congress set up through the SEC? Again.... NO COMMON SENSE IN CONGRESS!!!