The economic fallout from Obamacare continued today as Prudential announced they would have to take $100 million hit as a result of the controversial health care legislation.
The growing list of companies who have reported how the Democrats’ health care reform now includes Caterpillar ($100 million), John Deere ($150 million), AK Steele ($31 million), Prudential ($100 million), and AT&T ($1 billion).
A study by Credit Suisse of the S&P 500 found that the companies makeup the index will have a reduced income of a total of $4.5 billion because of provisions contained in Obamacare that remove the tax breaks for providing retirees’ care. Verizon sent a notice to its employees warning of impending cuts to retiree drug coverage as a result of those same provisions.
During the debate leading up to passage of the bill, Democrats dismissed warnings from financial experts over the impacts of their reform plans as scaremongering and lies. Now with egg on their faces, their turning to a tactic they so vigorously lauded in the past… congressional hearings.
You can almost hear California Rep. Henry Waxman as he made his announcement earlier this week, “I have here in my hands a list of 205… a list of companies that were made known to the Securities and Exchange Commission as being negatively impacted by health care reform and who have the gall to make these costs known to the American people. . . .”
Waxman did say of the hearings that he will call the CEOs of these companies to testify about the “claims by Caterpillar, Verizon, and Deere that provisions in the new health care reform law could adversely affect their company’s ability to provide health insurance to their employees. These assertions appear to conflict with independent analyses, which show that the new law will expand coverage and bring down costs.”
Waxman’s witch hunt is a warning to other companies that may be considering making similar announcements about the costs of Obamacare, “keep your mouths shut.”
The problem for Waxman and other Democrats unhappy with the realities of regulating 1/6th of the U.S. economy is that companies are required by securities law to file form 8-K whenever any material changes are realized… i.e. when the Democrats’ health care reform bill was signed into law. Also, because CEOs are rewarded based on their companies performance and thusly have no incentive to overstate the costs of health care reform, there exists a strong likelihood that these announcements understate those costs.
If Waxman really wanted to get to the root of the problem he’d be holding hearings and calling to testify those members of congress who couldn’t be bothered to read the bill, you know, like the president, and the “independent analysts” who failed to predict these costs despite the fact that companies and financial experts were screaming about them to any who would listen. Instead, Democrats are arming up to shoot the messengers.
Update: Below is the letter sent by Waxman to AT&T's CEO.