Examiner Editorial: Democrats fear honest Obamacare accounting 

Remember the Enron scandal in 2001, which drove a bipartisan majority in Congress to demand far-reaching reforms in corporate accounting?

Democrats discovered this week that maybe they can’t handle the truth — at least not when it exposes the real economic impact of Obamacare on private sector companies large and small. Millions of employees, their families, and retirees get their health insurance through firms that are now having to figure out how to cope with government-run health care.

On Capitol Hill and in the White House on Monday, Democrats were fuming about a series of announcements that started Friday from Fortune 500 firms saying their bottom lines will take huge negative hits due to changes in tax laws mandated by Obamacare. That hit, in turn, means lower profit projections.

Caterpillar estimates, for example, that Obamacare will cost it $100 million; John Deere faces expenses of $150 million; 3M, $90 million; AK Steel, $31 million; Valero, $20 million. And then there’s AT&T, which is marking its balance sheet down by a whopping $1 billion.

All in all, the Wall Street Journal estimated a $14 billion haircut for these corporations.  

Under post-Enron accounting rules, the corporations are required to revise their projections to account for the effect of Obamacare on their bottom lines. The impact is negative because Democrats, in their zeal to raise revenue and improve Obamacare’s claimed impact on the federal-deficit outlook, took away a tax break these companies needed in order to supply prescription drugs to their retirees. The tax subsidy — itself a government accounting ruse crafted in 2003 by the Republican Bush administration to dissuade corporations from dumping their retiree drug benefit programs on the then-new Medicare Part D — becomes taxable under Obamacare. Corporations are now being reminded of the harsh truth: What Big Government giveth, Big Government taketh away, too.

According to the American Spectator, top White House advisers reacted with angry phone calls to the corporations in question.

House Energy and Commerce Committee Chairman Henry Waxman, D-Los Angeles, issued harassing document requests and demanded that the CEOs appear before his committee next month to answer for their sins.

These corporations, which legally owe an honest reckoning to their shareholders, are only doing their duty by restating projections. By contrast, Waxman and many of his fellow Democratic leaders in Congress have used every government accounting and budget gimmick at their disposal to deceive Americans for the past year about the true costs of Obamacare.

These Washington, D.C., politicians have no business lecturing CEOs on honesty in accounting.



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Staff Report

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A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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