From Associated Press, “Companies say health care costs hard to swallow“: “The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.”
The points of reference are reports by Deere & Company, Caterpillar and Valero that the companies will take charges totaling hundreds of millions of dollars because of the loss of a federal deduction for prescription drug benefits. The move should come as no surprise to lawmakers or the White House. More from AP:
Industry groups say they lobbied hard against the change in the tax rules before it was added to the health care law over the winter.
“It was in all of our letters and communications that went up to the Hill, and the companies were heavily involved in that,” said Dena Battle, a tax specialist with the National Association of Manufacturers.
Nationwide, companies would take a $14 billion hit on their financial statements if all of the roughly 3,500 companies receiving the subsidies continued to do so, according to a study by Towers Watson, a human resources consulting firm.
The Wall Street Journal reports administration officials saying the companies are exaggerating the impact. From “Companies Take Health-Care Charges“:
“During the past year, I have heard from CEOs from across the country that skyrocketing premiums are crippling the competitiveness of their companies,” said Commerce Secretary Gary Locke. “It is simply not responsible to suggest that the new health-care law is bad for business.”
In the litany of efforts to marginalize critics of the health care bill, that’s pretty mild, but please, Mr. Secretary. These companies are not issuing inflammatory news releases, they’re making official accounting judgments that are reported to the SEC. Making misleading or false statements, THAT would be irresponsible.
The Senate Republican caucus highlighted Caterpillar’s $100 million hit, recalling President Obama’s appearance at the company last year in support of the stimulus bill:
PRESIDENT OBAMA: “So what’s happening at this company tells us a larger story about what’s happening with our nation’s economy, because, in many ways, you can measure America’s bottom line by looking at Caterpillar’s bottom line. (President Obama, Remarks To Caterpillar Employees, 2/12/09)
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