When you start piling financial regulations onto businesses those business have to save their bottom line – their business, other thousands of jobs – by cutting costs. Several big companies have announced just that in recent days; from CNN:
The aeronautics company expects to take an income tax charge of roughly $150 million, or 20 cents per share, in the first quarter of 2010 as a result of the law.
AT&T (T, Fortune 500) said last week that it expects to book a $1 billion charge in the first quarter in anticipation of costs resulting from health care reform. That came after similar announcements from Deere (DE, Fortune 500) and Caterpillar (CAT, Fortune 500).
When you lost an over $1300 dollar subsidy, as part of the Medicare prescription drug program, for retirees and current employees, that adds up. Fast. This will affect job creation in a 9.7% unemployment climate, it will affect wages and benefits. Good job, Washington.
Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, has summoned some of the nation’s top executives to Capitol Hill to defend their assessment that the new national health care reform law will cost their companies hundreds of millions of dollars in health insurance expenses. Waxman is also demanding that the executives give lawmakers internal company documents related to health care finances — a move one committee Republican describes as “an attempt to intimidate and silence opponents of the Democrats’ flawed health care reform legislation.”
Waxman misses that he and the other geniuses were the folks who insisted upon tying health insurance to employers instead of empowering the people and making it portable and affordable.
The news is an embarrassment for Democrats. As President Obama and congressional leaders tout the purported benefits of the new health care law, some of the nation’s biggest companies are saying it will mean higher costs and fewer benefits — not exactly what Democrats want to hear in the days after their historic victory.
Waxman’s letter suggests he does not accept the company’s decision. “The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern,” Waxman wrote to Stephenson, in addition to letters to Verizon CEO Ivan Seidenberg, Caterpillar CEO James Owens, and Deere & Company CEO Samuel Allen.