The title of this series is a work-in-progress. Perhaps intended consequences is better. Or predicted consequences. We might have to work on that, because President Obama and Congress are quickly proving to be either charlatans or fools (and it's just as likely they are both.)
As I noted here Wednesday, the negative reaction of the private sector to the schemes of the America's new health care central planners did not take long to materialize. In fact, reacting to Verizon's notice to employees that the regulatory and tax burdens of ObamaCare will result in a decrease in benefits due to increased corporate costs, I wrote:
[This] story will be repeated thousands of times in the coming months.
"Months" is turning out to be a slow-walk prediction. According to Bloomberg News, AT&T "will book $1 billion in first-quarter costs related to the health-care law signed this week by President Barack Obama."
American industry giants John Deere ($150 million), Caterpillar Inc. ($100 million), AK Steel Holding Corp. ($31 million), Valero Energy (up to $20 million), and 3M Co.($90 million) have also come out with their legally mandated earnings and costs estimates, and they ain't pretty. Overall, consulting firm Towers Watson estimates health-care costs may shave as much as $14 billion from U.S. corporate profits. Based only on AT&T's estimate — and the fact that corporations try to give the sunniest "negative" numbers legally possible to stockholders and the Securities Exchange Commission — I'm guessing Towers Watson will be upping that estimate down the line.
Why all the gloom and doom? Well, the corporate tax increases are one reason. Another, especially for Verizon and AT&T, is that the tax break those corporations got for crafting their own prescription drug plans for retirees was immediately eliminated in ObamaCare. So, without that tax break to the eeeeeviiiil corporations, they'll have to dump those folks into the inferior government-backed Medicare Part D prescription drug plan. Multiply those actions by AT&T and Verizon by thousands and we'll get a "donut hole" blown through the rigged and sunny CBO ObamaCare cost projections. Why?
The Employee Benefit Research Institute notes that the tax break would have "cost" taxpayers $665 per person next year, but dumping them into Medicare will cost $1,209 per person. Nice going. This is what happens when you don't read the bill, or — more to the point — don't care what's in it as long as it centralizes government power.
This was all predicted by ObamaCare opponents, such as Rep. Paul Ryan (R-Wis.) — most prominently at Obama's ballyhooed "Health Care Summit" a while back. Ryan said the cost curve would not bend downward, but upward. Obama blew him off. Reality now laughs in the president's face, and it's not at all funny.
But now Congressional Democrats are childishly stamping their feet. Rep. Henry Waxman (D-CA), chairman of the House Energy and Commerce Committee, has fired off a nasty letter to those companies. He's demanding they appear before his committee on April 21 to answer for answering to fiscal reality. The legal obligation of these companies to immediately and publicly estimate the fiscal impact of new legislation, Waxman says, "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."
"The Business Roundtable, an association of chief executive officers from leading U.S. companies, asserted in November 2009 that health care reform could reduce predicted health insurance cost trends for businesses by more than $3,000 per employee over the next 10 years," Waxman wrote.
That's the thing about "independent analyses." They are hard to control. As Bruce McQuain notes at the libertarian Q&O blog:
You’ve got to love it – Waxman’s strongest case is an association comprised of some CEOs who “asserted” – got that? “asserted” – that health care reform “could” – again, “could” – reduce cost trends.
In other words, instead of actually doing the work of checking with authoratative sources that could have actually run the numbers and vetted the requirements of the law, he, Waxman, went with the assertions of a bunch of CEOs because they said what he wanted them to say. Reminds you a bit of the IPCC, doesn’t it?
Actually, it reminds me of government bullying — the kind the left decries as McCarthyism. Waxman is going to haul these CEOs before his committee and berate them for telling the fiduciary truth they are required by law to tell. He'll be, in essence, bullying them to lie about what the real-world impacts of ObamaCare will be on American companies — and, naturally, the Americans who work for those companies ... otherwise known as us.
What Waxman will actually be doing, however, is highlighting the kind of fraudulent and fantastical accounting that only government can get away with. How dare these corporations defy the word of Obama and Pelosi and Reid and Waxman that the laws of economics are what the government says they are! If we say ObamaCare will reduce costs, they will. THEY WILL!!!! Who are you to say different?! And I'm going to use the power of government to set you straight.
Awesome. This is today's America: The private sector dragged before Congress and berated to agree they believe in the Tooth Fairy.
I'd love one of those CEOs to ask Waxman what color is the unicorn he rides to work each day. I'll settle for: "Have you no sense of decency, sir."