Now that ObamaCare is law, there are many celebrations amongst those who supported the rhetoric of Obama/Pelosi/Reid. “We must take away the power of the insurance companies”; “we must fix a broken healthcare system”; “healthcare is a right and not a privilege”; and my personal favorite “there are 48 million people in this country who are not getting any healthcare because they can’t afford it.”
Well, now that the private sector has had time to digest the massive ball of crud shoved down their throats, the reality is starting to sink in. AT&T announced today that they will be taking a $1 billion charge against future earnings in the next quarter (3 months!) because of ObamaCare. In addition to this financial charge, AT&T claims they will have to cut benefits for many current and retired workers covered under their healthcare plans.
Companies such as John Deere, Valero Energy, Caterpillar, Verizon and AK Steel Corp, combined, estimate they will have to charge hundreds of millions of dollars to their future earnings in the near term because of ObamaCare. To be clear, this is money these companies will not have to hire, train, promote and keep workers, let alone buy new equipment, invest in new products or grow their business. This money will be going to the government, insurance companies, and to pay for increased healthcare costs.
What is not a surprise is the response from the White House talking heads crew. Robert Gibbs, the self proclaimed expert on financial matters and Obama spokesman, said these companies are overreacting to the effects of ObamaCare. Oh really? Well, Gibbs, and apparently Obama, too, do not understand the requirements these companies face with current accounting rules and from the Securities and Exchange Commission.
These companies have a duty and a legal obligation to notify shareholders of future changes in their financial performance. If they get it wrong then shareholders rightly file suit against the executive teams of the offenders or they are investigated by the SEC, or both. So, the estimates of the impact of ObamaCare need to be nearly perfect in their forecast of actual impact.
In a most stunning result to these required announcements and according to The Wall Street Journal and other sources, Rep Henry Waxman intends to call these companies before Congress on April 21st because they are not telling the truth about ObamaCare. Waxman is demanding internal documents from each company regarding their conclusions on the impact of Obamacare.
So, while they are required by law to tell shareholders the truth, Democrats who are promoting ObamaCare are using the power of Congress to intimidate these companies for meeting their legal obligations. Nothing in our history suggests this should be tolerated by these companies or their shareholders let alone voters.
Obama and those who surround him are not of the corporate world. That would be unacceptable to the general idea in this White House that corporations and profits are bad while government is always good. It is likely, therefore, that they did not understand the impact of their policy choices with ObamaCare. Now that the truth is being told, they are unhappy.
Companies such as AT&T and others noted above will see the reduction in future earnings due to ObamaCare negatively impact the share price of their publicly traded stocks and it may impede their ability to pay dividends. That means mutual funds and individual shareholders, who rely on these stocks to help with retirement, pay medical bills, help relatives with their financial challenges, pay for college tuition and other financial matters will suffer.
Those who promoted ObamaCare forecasted roses and sunshine for everyone. They claimed all good things would come from ObamaCare. There was no allowance for the corporate world to warn them of the unintended consequences of their policy choices.
This is yet another reason for the GOP to begin keeping score on these unintended consequences and to use them as a bludgeon with incumbent Democrats in the November election. As these negatives continue to be realized, let’s thank our founders for understanding that a radical change in direction in this country will be checked by mid-term elections every two years.
Let’s hope that while this healthcare fiasco is promoted by it supporters that the truth will be told about the real costs of this sharp move to the left.