James Klein of the American Benefits Council writes in opposition to the attacks by the administration and Rep. Henry Waxman that corporations’ write-downs of losses due to ObamaCare are some sort of political scare tactics:
The new health-care law contains two sentences that change the tax treatment of a subsidy originally crafted in 2003 when Congress established the Medicare prescription drug program. As a result, companies must now impose on their financial statements the present value of their entire new future tax liability. The Obama administration’s position is a) that the original tax provision was actually a “loophole,” and b) that companies are acting irresponsibly by refusing to acknowledge the overall cost savings associated with the new law.
Notwithstanding the unusual tax treatment in the original provision, the bottom line is indisputable: The subsidy exists for the express purpose of saving the government money by keeping retirees on company prescription drug plans rather than having them enroll in the Medicare drug plan. Now that Congress has reversed the policy, corporations must report eye-popping charges on their financial statements.
As Klein notes, it is the frenzied ObamaCare defenders who are playing politics with the tax code, and worse — berating corporations to defraud shareholders. (“As for the government’s assertion that companies are failing to adequately account for all the savings they will enjoy from health-care reform, isn’t that exactly the kind of “creative” accounting that got Enron in trouble?”)
This is the administration that promised to take the politics out of science and the ideology out of foreign policy. But in fact everything — including the tax code — is merely part of the Chicago machine, which threatens to mow down any rule, any entity, and any critic standing in its way. Lacking internal restraint and humility, this administration and the country would surely benefit from some robust legislative scrutiny and oversight. The voters in November will have an opportunity to check the voracious power of an administration of bullies.