Commentary Magazine


Topic: 3M

Democrats Try to Smother the Bad News

As I’ve noted during the week, the ObamaCare steamroller is already flattening the bottom lines of a number of large employers. Not content to see billions of losses pile up, the Democrats have now begun to berate employers for accurately accounting for the anticipated losses. The Wall Street Journal editors note:

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.

On top of AT&T’s $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

Well, this is par for the course: a complete disregard for the consequences of their own handiwork, the bullying of private enterprise, and the determination to politicize what were once economic and legal judgments. One can see in the Democrats’ fury the desperate attempt to conceal the implications of their monstrous legislation, to maintain as long as possible the fiction that ObamaCare is a great cost-saver, and boon to employers. It’s going to be hard to keep up the charade, for as the editors note, ObamaCare “was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.”

In that regard the adverse consequences of ObamaCare will likely be more apparent than those of the ill-conceived stimulus plan, which “merely” added to the ocean of red ink. How will shareholders, small-business owners, employees, and retirees react as they see the damage pile up, and learn that there is more in store if the bill is fully implemented? Well, they might find “Repeal and Replace!” an attractive message.

As I’ve noted during the week, the ObamaCare steamroller is already flattening the bottom lines of a number of large employers. Not content to see billions of losses pile up, the Democrats have now begun to berate employers for accurately accounting for the anticipated losses. The Wall Street Journal editors note:

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.

On top of AT&T’s $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

Well, this is par for the course: a complete disregard for the consequences of their own handiwork, the bullying of private enterprise, and the determination to politicize what were once economic and legal judgments. One can see in the Democrats’ fury the desperate attempt to conceal the implications of their monstrous legislation, to maintain as long as possible the fiction that ObamaCare is a great cost-saver, and boon to employers. It’s going to be hard to keep up the charade, for as the editors note, ObamaCare “was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.”

In that regard the adverse consequences of ObamaCare will likely be more apparent than those of the ill-conceived stimulus plan, which “merely” added to the ocean of red ink. How will shareholders, small-business owners, employees, and retirees react as they see the damage pile up, and learn that there is more in store if the bill is fully implemented? Well, they might find “Repeal and Replace!” an attractive message.

Read Less

Flotsam and Jetsam

Andy McCarthy explains: “After months of delay, DOJ officials released what they claim is the back-up for Attorney General Holder’s oft-repeated and outlandish claim that there are ‘hundreds’ of convicted ‘terrorists’  incarcerated in federal prisons, which ‘fact’ supposedly shows that civilian justice processes are our best method of trying, convicting and securely detaining terrorists.” Most of the 403 supposed cases aren’t really terrorism cases at all.

The latest ObamaCare victim: AT &T, its shareholders, employees and retirees: “AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.”

And then there is 3M, which announced that “it expects to record a one-time non-cash charge of $85 to $90 million after tax, or approximately 12 cents per share, in the first quarter of 2010, resulting from the recently enacted Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010 passed by Congress on March 25, 2010.”

You wonder whether anyone in the White House pays attention to headlines like this: “Is Economy’s Momentum About to Hit a Wall?” And, that was before ObamaCare hit.

The White House gloats: “Best week we’ve had in a long damn time.” Yes, it was quite a week — taking over 1/6th of the economy and beating up on Israel. Nothing quite thrills the Chicago pols like the display of brute political force.

You knew this was coming: “Michigan Right to Life has always endorsed Congressman Bart Stupak (D-MI) and was backing him for re-election this year. But after his pivotal vote for health care reform without the inclusion of legally binding language banning taxpayer funding of abortion, the group has rescinded its endorsement and pledged to support his Republican challenger, Dan Benishek.”

John Noonan, on the Obami’s anti-Israel gambit: “President Obama’s stewardship of the special U.S.-Israel relationship has been nothing short of shameful. But, beyond that, his behavior towards Netanyahu doesn’t make a lick of sense. There’s no quantifiable end game here. Obama is either so caught up in his own personality cult that he honestly believes he can drive a wedge between the Israeli electorate and Netanyahu’s fragile government (unlikely), or he’s just that infantile — throwing a temper tantrum over an ill-timed settlement announcement. . . . This is just another example of the White House’s lean towards ideology over pragmatism, and how smart power has proven to be anything but.”

David Axelrod to speak to the National Democratic Jewish Council on April 22. Here’s the time for choosing: are they simply flunkies for the administration or will they protest and condemn the shameless treatment of Israel? Well, I’m under no illusions.

Andy McCarthy explains: “After months of delay, DOJ officials released what they claim is the back-up for Attorney General Holder’s oft-repeated and outlandish claim that there are ‘hundreds’ of convicted ‘terrorists’  incarcerated in federal prisons, which ‘fact’ supposedly shows that civilian justice processes are our best method of trying, convicting and securely detaining terrorists.” Most of the 403 supposed cases aren’t really terrorism cases at all.

The latest ObamaCare victim: AT &T, its shareholders, employees and retirees: “AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.”

And then there is 3M, which announced that “it expects to record a one-time non-cash charge of $85 to $90 million after tax, or approximately 12 cents per share, in the first quarter of 2010, resulting from the recently enacted Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010 passed by Congress on March 25, 2010.”

You wonder whether anyone in the White House pays attention to headlines like this: “Is Economy’s Momentum About to Hit a Wall?” And, that was before ObamaCare hit.

The White House gloats: “Best week we’ve had in a long damn time.” Yes, it was quite a week — taking over 1/6th of the economy and beating up on Israel. Nothing quite thrills the Chicago pols like the display of brute political force.

You knew this was coming: “Michigan Right to Life has always endorsed Congressman Bart Stupak (D-MI) and was backing him for re-election this year. But after his pivotal vote for health care reform without the inclusion of legally binding language banning taxpayer funding of abortion, the group has rescinded its endorsement and pledged to support his Republican challenger, Dan Benishek.”

John Noonan, on the Obami’s anti-Israel gambit: “President Obama’s stewardship of the special U.S.-Israel relationship has been nothing short of shameful. But, beyond that, his behavior towards Netanyahu doesn’t make a lick of sense. There’s no quantifiable end game here. Obama is either so caught up in his own personality cult that he honestly believes he can drive a wedge between the Israeli electorate and Netanyahu’s fragile government (unlikely), or he’s just that infantile — throwing a temper tantrum over an ill-timed settlement announcement. . . . This is just another example of the White House’s lean towards ideology over pragmatism, and how smart power has proven to be anything but.”

David Axelrod to speak to the National Democratic Jewish Council on April 22. Here’s the time for choosing: are they simply flunkies for the administration or will they protest and condemn the shameless treatment of Israel? Well, I’m under no illusions.

Read Less




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