Big Brother’s Heavy Hand

What happens when the economic realities of ObamaCare collide with the government’s false projections of lower health insurance costs?  Big Brother’s heavy hand is used yet again to intimidate Corporate America.

Companies including AT&T, John Deere, Caterpillar, and AK Steel filed a restatement of earnings this week in compliance with SEC accounting rules.  Those filings reflect the higher cost of health care-related liabilities and corporate taxes – ranging from $20 million to $1 billion dollars – due to the enactment of health care reform.

Incensed that Corporate America isn’t propagating the party line, House Democrats are calling the CEO’s of these corporations before a congressional committee to get their thinking straight.

From today’s Wall Street Journal:

This wholesale destruction of wealth and capital came with more than ample warning. Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections, Democrats waved them off as self-serving or “political.”

Perhaps that explains why the Administration is now so touchy…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.

Unlike all the closed door hearings surrounding the passage of ObamaCare, what do you want to bet that these hearings will be broadcast for everyone to watch?