Corporate America Let Us Down

The corporations that are now announcing big write-downs in anticipation of the new taxes and costs associated with ObamaCare could have done us all a lot of good had they only announced the projected costs BEFORE the vote took place. Jim Geraghty has some thoughts:

Hey, thanks for getting our backs in the big health-care fight, corporate America. As we watch company after company declare the intense financial hit they're immediately taking from Obamacare, I can't help but think how useful this information is . . . if we have access to a Hot Tub Time Machine. Otherwise, it's about two weeks after when it would have packed the most punch in persuading those wavering House Democrats that they didn't want to vote yes -- too much immediate economic downside, and too much political fallout to go with it.

Sure, the U.S. Chamber of Commerce hit the legislation with all it had, but we're only finding out now about the specifics, and they amount to a vacuum cleaner being applied to the bottom line of some of the country's biggest companies: John Deere ($150 million), Verizon, Caterpillar ($100 million), AK Steele Holding Corp. ($31 million), Valero Energy ($15-20 million), Medtronic, 3M ($90 million), and AT&T
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The Wall Street Journal reveals that when the real-world impact of legislation conflicts with administration rhetoric, congressional Democrats know that inconvenient reality can be defeated through confrontational hearings: "Meanwhile, 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."

Andy McCarthy's in disbelief: "If a company like AT&T failed to make a legally mandated restatement of its financial position while continuing to participate in the capital markets, it would be investigated and the responsible management officials would likely find themselves prosecuted while the SEC, concurrently, went after the company and its officials in civil enforcement suits. There are prosecutors and investigators who would salivate at the prospect of doing such a career-making case. If we are now under a system where disclosure gets you a public whipping and other threats by the Powers That Be while nondisclosure promises the ruinous expenses of defending against criminal investigations and civil enforcement, this is no longer anything but a thugocracy."

Granted, until the law was actually signed there was no requirement for these financial disclosures, and perhaps announcing them early would have earned the ire of Congress, but they're going to get that anyway. Congress will drag them to D.C. for a show trial in April, but that effort is likely to backfire on Henry Waxman and his cohorts since these financial reports will have been meticulously prepared by the corporations and will be essentially Congress-proof. Waxman can stop around, fume and fuss, but he won't be able to get them to change their numbers. To do so could expose the corporations to liability from government regulators and their shareholders.

And the whole show trial thing will not look good to most Americans. It will look like a heavy-handed borderline fascist government abusing its power.

As always, the Democrats are overreaching and exercising their power in a very dangerous way.