Commentary Magazine


Topic: Henry Waxman

ObamaCare’s Crony Capitalism: Worse than We Thought

At times it seems like the sheer magnitude of bad news about ObamaCare can redound to its own benefit. It’s easy for individual pieces of bad news to get lost in the sea of failure that has characterized the Obama administration’s signature “achievement.” That might be the case with the most important story to appear about ObamaCare this week, from Tuesday’s edition of the New York Times.

The paper reported that the Obama administration has ruled that the federal health-care program be exempted from the category of laws considered “federal health care programs.” Now, this is obviously dishonest: the federal government is running insurance exchanges, funding health-care subsidies under the law, and employing federal workers to help manage the law–all of which are clearly “federal health care programs.” So why would the administration choose not to label them according to observable reality? Because, as the Times explained, this decision–believe it or not–exempts ObamaCare from kickback restrictions and anti-fraud protections:

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At times it seems like the sheer magnitude of bad news about ObamaCare can redound to its own benefit. It’s easy for individual pieces of bad news to get lost in the sea of failure that has characterized the Obama administration’s signature “achievement.” That might be the case with the most important story to appear about ObamaCare this week, from Tuesday’s edition of the New York Times.

The paper reported that the Obama administration has ruled that the federal health-care program be exempted from the category of laws considered “federal health care programs.” Now, this is obviously dishonest: the federal government is running insurance exchanges, funding health-care subsidies under the law, and employing federal workers to help manage the law–all of which are clearly “federal health care programs.” So why would the administration choose not to label them according to observable reality? Because, as the Times explained, this decision–believe it or not–exempts ObamaCare from kickback restrictions and anti-fraud protections:

The surprise decision, disclosed last week, exempts subsidized health insurance from a law that bans rebates, kickbacks, bribes and certain other financial arrangements in federal health programs, stripping law enforcement of a powerful tool used to fight fraud in other health care programs, like Medicare.

The main purpose of the anti-kickback law, as described by federal courts in scores of Medicare cases, is to protect patients and taxpayers against the undue influence of money on medical decisions. …

Under the Affordable Care Act, millions of people will be able to buy insurance from “qualified health plans” offered on exchanges, or marketplaces, run by the federal government and by some states.

Most of the buyers are expected to be eligible for subsidies to make insurance more affordable. The subsidies, paid directly to insurers from the United States Treasury, start in January and are expected to total more than $1 trillion over 10 years.

Ms. Sebelius said the Health and Human Services Department “does not consider” the subsidies to be federal health care programs. She reached the same conclusion with respect to federal and state exchanges, built with federal money, and with respect to “federally funded consumer assistance programs,” including the counselors, known as navigators, who help people shop for insurance and enroll in coverage through the exchanges.

This has two effects on the law: first, it encourages precisely the kickback schemes this statute was put in place to prevent; and second, it could easily produce an enormous financial burden on the government. The prescription drug “kickback” scheme is how federal law enforcement officials describe the practice in which drug companies give customers coupons to purchase their brand-name medications instead of lower-cost alternatives. The coupons reduce the cost for consumers, but not for insurers or government agencies paying out reimbursement costs. This creates a windfall for the drug companies at high cost to insurers and the government.

So why would the government actively facilitate corruption under ObamaCare, especially at the risk of ballooning its own costs and collapsing its budget estimates?

The answer has to do with the revelations of major drug companies’ cooperation with President Obama on shepherding ObamaCare to the finish line. In June 2012, the Wall Street Journal explained how this particular partnership formed. In 2009, drug companies were concerned that an Obama-led health-care reform effort would emphasize price controls and re-importation allowance–the latter being the process by which drugs sold cheaper abroad could be re-sold here, a case of foreign quasi-socialist health-care systems undermining the market forces in the U.S. that enable companies to be able to conduct the research and development that produces the drugs in the first place.

The administration worked out a deal with the pharmaceutical giants, but then Democratic Representative Henry Waxman demanded further concessions from the drug industry. The White House stepped in to protect them, and the drug companies responded with more pro-ObamaCare advertising.

That appeared to be the extent of the already-nauseating crony capitalism at the heart of ObamaCare. But the Times story suggests otherwise. And the inconsistency is the giveaway: the Justice Department is prosecuting high-profile companies (like Johnson & Johnson) for a practice the government plainly considers an illegal kickback scheme. And yet now that same government is giving the green light to the practice, which will be a financial boon to the companies that helped ObamaCare pass in the first place.

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Flotsam and Jetsam

It took Barack Obama to turn an ex-president into a sleazy “bag man.”

What will it take for the left to break with the anti-Semites, racists, and Israel-bashers? “Democracy for America, the progressive group that grew out of Howard Dean’s campaign for president, is standing by its support for a House candidate who backs a radical single-state solution in the Middle East and suggested in an interview that Jewish Reps. Jane Harman and Henry Waxman should ‘pledge allegiance to this country as the country they represent.”

Will Obama take this opportunity to dump the witch hunt against CIA interrogators? Stephen Hayes recommends that he should: “The repercussions have been severe. CIA operators, already risk averse, are today far less willing to take risks in the field out of fear that a wrong decision, even a legal one that produced crucial intelligence, could send them to jail. Obama should also insist that the Justice Department aggressively investigate the alleged exposure of CIA officials by lawyers representing Guantánamo detainees. Photographs of officials were discovered in the cell of Mustafa Ahmed al Hawsawi and were reportedly provided by investigators working for the ACLU and the National Association of Criminal Defense Lawyers. John Rizzo, former CIA general counsel and a 30-year intelligence veteran, said that the breach was far graver than the leak of Valerie Plame’s name.”

It took a few weeks of criticism to reveal Peter Beinart’s vile attitudes toward his fellow Jews: Nathan Diament on Beinart’s latest outburst in the Israel-hating the New York Review of Books: “Peter goes way beyond debating substance and drifts into stereotyping and calumny, saying: ‘the same sort of settler fanatics who burn Palestinian olive groves also assassinated an Israeli prime minister. The same ultra-Orthodox hooligans who burn Christian holy books also attack Jewish women trying to pray at the Western Wall.’ He also slams Rav Ovadia Yosef and, apparently, anyone else in Israel who, we suppose, doesn’t agree with his view — or that of the editorial board of Ha’aretz — as to precisely what ought to happen.”

It took a year and a half of Obama’s presidency to ruin Blanche Lincoln’s career: “[Arkansas’s] larger bloc of conservative Democrats and independents upset over the perception that the incumbent is overly cozy with the unpopular President Obama, the Agriculture Committee chair and Delta farmer’s daughter finds her 18-year congressional career in grave jeopardy.”

It took a determined Jewish mom from Los Angeles to figure out it only took a $15 dollar solar cooker (made of cardboard and aluminum) to help protect “female [Darfur] refugees who were being ruthlessly subjected to physical and sexual brutality when they left the relative safety of their refugee camps.” She’s done more for human rights in Darfur — much more — than Obama and his embarrassingly ineffective special envoy have.

Have you noticed that Democrats aren’t so willing to take unpopular stands for this president on national security? “The Senate Armed Services Committee dealt a big setback to President Obama’s plans to close the detention facility at Guantanamo Bay when lawmakers stripped funding for a new prison in Illinois to hold the detainees. Committee Chairman Carl Levin on Friday told reporters the committee, in a voice vote, stripped $245 million that would have gone to buy and retrofit the Thomson prison in Illinois.”

Charles Hurt catches Obama taking responsibility for “zilch” at his BP oil-spill press conference: “It was yet another performance of the ‘full responsibility’ flimflam. … President Obama repeatedly took ‘full responsibility’ for the blundering efforts to clog up the geyser of crude oil spewing into the Gulf of Mexico coating everything in sight. At the same time, Obama repeatedly denied that his administration was complicit in allowing the catastrophe to happen in the first place, slow to realize the devastating nature of it, or ham-handed in the five-week effort to try to stem the toxic tide. In other words, Obama — as he often does — took ‘full responsibility’ for being awesome.”

It took Barack Obama to turn an ex-president into a sleazy “bag man.”

What will it take for the left to break with the anti-Semites, racists, and Israel-bashers? “Democracy for America, the progressive group that grew out of Howard Dean’s campaign for president, is standing by its support for a House candidate who backs a radical single-state solution in the Middle East and suggested in an interview that Jewish Reps. Jane Harman and Henry Waxman should ‘pledge allegiance to this country as the country they represent.”

Will Obama take this opportunity to dump the witch hunt against CIA interrogators? Stephen Hayes recommends that he should: “The repercussions have been severe. CIA operators, already risk averse, are today far less willing to take risks in the field out of fear that a wrong decision, even a legal one that produced crucial intelligence, could send them to jail. Obama should also insist that the Justice Department aggressively investigate the alleged exposure of CIA officials by lawyers representing Guantánamo detainees. Photographs of officials were discovered in the cell of Mustafa Ahmed al Hawsawi and were reportedly provided by investigators working for the ACLU and the National Association of Criminal Defense Lawyers. John Rizzo, former CIA general counsel and a 30-year intelligence veteran, said that the breach was far graver than the leak of Valerie Plame’s name.”

It took a few weeks of criticism to reveal Peter Beinart’s vile attitudes toward his fellow Jews: Nathan Diament on Beinart’s latest outburst in the Israel-hating the New York Review of Books: “Peter goes way beyond debating substance and drifts into stereotyping and calumny, saying: ‘the same sort of settler fanatics who burn Palestinian olive groves also assassinated an Israeli prime minister. The same ultra-Orthodox hooligans who burn Christian holy books also attack Jewish women trying to pray at the Western Wall.’ He also slams Rav Ovadia Yosef and, apparently, anyone else in Israel who, we suppose, doesn’t agree with his view — or that of the editorial board of Ha’aretz — as to precisely what ought to happen.”

It took a year and a half of Obama’s presidency to ruin Blanche Lincoln’s career: “[Arkansas’s] larger bloc of conservative Democrats and independents upset over the perception that the incumbent is overly cozy with the unpopular President Obama, the Agriculture Committee chair and Delta farmer’s daughter finds her 18-year congressional career in grave jeopardy.”

It took a determined Jewish mom from Los Angeles to figure out it only took a $15 dollar solar cooker (made of cardboard and aluminum) to help protect “female [Darfur] refugees who were being ruthlessly subjected to physical and sexual brutality when they left the relative safety of their refugee camps.” She’s done more for human rights in Darfur — much more — than Obama and his embarrassingly ineffective special envoy have.

Have you noticed that Democrats aren’t so willing to take unpopular stands for this president on national security? “The Senate Armed Services Committee dealt a big setback to President Obama’s plans to close the detention facility at Guantanamo Bay when lawmakers stripped funding for a new prison in Illinois to hold the detainees. Committee Chairman Carl Levin on Friday told reporters the committee, in a voice vote, stripped $245 million that would have gone to buy and retrofit the Thomson prison in Illinois.”

Charles Hurt catches Obama taking responsibility for “zilch” at his BP oil-spill press conference: “It was yet another performance of the ‘full responsibility’ flimflam. … President Obama repeatedly took ‘full responsibility’ for the blundering efforts to clog up the geyser of crude oil spewing into the Gulf of Mexico coating everything in sight. At the same time, Obama repeatedly denied that his administration was complicit in allowing the catastrophe to happen in the first place, slow to realize the devastating nature of it, or ham-handed in the five-week effort to try to stem the toxic tide. In other words, Obama — as he often does — took ‘full responsibility’ for being awesome.”

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Why Waxman Decided Against a Bully-athon

Daily Caller reports that Rep. Henry Waxman decided against a hearing to excoriate business executives for recording tax losses attributable to ObamaCare. The reason: not only did the companies have a legal obligation to do so (had they not, Sen. Carl Levin would no doubt be hauling them before his committee one day to decry the fraud on the shareholders); they also would have produced some very embarrassing evidence that ObamaCare is going to drive up health-care costs. The report explains:

Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.

A March 3 internal Verizon memo on the impact health-care law said new taxes on insurance companies and health-care equipment manufacturers will be passed onto employers through higher prices.

Facing such increased costs, employers like Verizon “may consider exiting the health-care market and send employees to the exchanges,” the memo says.

Under the law, companies would pay fines for not providing insurance companies coverage. But, the Verizon memo said, the fines would be “modest” compared to providing coverage for employees.

In a March 25 e-mail, John Deere’s director of labor relations, Kenneth Hugh, said, “We ought to look at … denying coverage and just paying the penalty … we would need to figure out which one was more expensive.” John Deere faces a unique situation because of contracts with its unionized workers.

Whether or not companies are being forced to rescind employee coverage, they may need to raise insurance premiums, the documents show.

The top human resources official at Caterpillar said in a March 23 e-mail that the company will need to “figure out what this will cost us and collect that in increased premiums which we will attribute to the legislation”

Oops. Wrong answer. Bag the hearing. It seems that ObamaCare opponents would do well to get one or more of these execs in front of a committee and let them tell the American people what Obama and Waxman won’t — that ObamaCare isn’t going to guarantee they can keep their insurance and it is going to cost them a bundle. Republicans argue that divided government is needed to check Obama’s leftist agenda. As Waxman’s gambit shows, it’s also the only way to achieve congressional oversight.

Daily Caller reports that Rep. Henry Waxman decided against a hearing to excoriate business executives for recording tax losses attributable to ObamaCare. The reason: not only did the companies have a legal obligation to do so (had they not, Sen. Carl Levin would no doubt be hauling them before his committee one day to decry the fraud on the shareholders); they also would have produced some very embarrassing evidence that ObamaCare is going to drive up health-care costs. The report explains:

Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.

A March 3 internal Verizon memo on the impact health-care law said new taxes on insurance companies and health-care equipment manufacturers will be passed onto employers through higher prices.

Facing such increased costs, employers like Verizon “may consider exiting the health-care market and send employees to the exchanges,” the memo says.

Under the law, companies would pay fines for not providing insurance companies coverage. But, the Verizon memo said, the fines would be “modest” compared to providing coverage for employees.

In a March 25 e-mail, John Deere’s director of labor relations, Kenneth Hugh, said, “We ought to look at … denying coverage and just paying the penalty … we would need to figure out which one was more expensive.” John Deere faces a unique situation because of contracts with its unionized workers.

Whether or not companies are being forced to rescind employee coverage, they may need to raise insurance premiums, the documents show.

The top human resources official at Caterpillar said in a March 23 e-mail that the company will need to “figure out what this will cost us and collect that in increased premiums which we will attribute to the legislation”

Oops. Wrong answer. Bag the hearing. It seems that ObamaCare opponents would do well to get one or more of these execs in front of a committee and let them tell the American people what Obama and Waxman won’t — that ObamaCare isn’t going to guarantee they can keep their insurance and it is going to cost them a bundle. Republicans argue that divided government is needed to check Obama’s leftist agenda. As Waxman’s gambit shows, it’s also the only way to achieve congressional oversight.

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Flotsam and Jetsam

No Henry Waxman bullying session for the corporate execs who are legally required to write down tax losses from ObamaCare. Must not be such a winning issue after all.

No victory in sight for Arlen Specter. “Republican hopeful Pat Toomey for the first time registers 50% support in his race against incumbent Democrat Arlen Specter in Pennsylvania’s contest for the U.S. Senate. The latest Rasmussen Reports telephone survey of likely voters in the state shows Specter earning 40% of the vote.”

No respect for Eric Holder — even from Chuck Schumer. “Sen. Chuck Schumer (D-N.Y.) doesn’t believe Attorney General Eric Holder is being genuine when he says the Obama administration still is considering New York City as a site for the terror trial of Khalid Sheikh Mohammed. ‘We know the administration is not going to hold the trial in New York. They should just say it already,’ Schumer said in a statement.” When it was Alberto Gonzales, Schumer said an attorney general who lawmakers couldn’t trust should step down. But that was totally different — Gonzales was an incompetent Republican; Holder’s a Democrat.

No way that the Democrats follow Harry Reid on this one: “Senate Majority Leader Harry Reid’s (D-Nev.) reelection interests are putting him at odds with the centrists he has vigorously protected over the past year and a half on the issue of immigration reform. Vulnerable senators like Blanche Lincoln (D-Ark.) want to stay away from immigration reform during an election year, but political experts in Nevada say mobilizing Hispanic voters could be the key to a reelection victory for Reid, whose favorability rating is below 40 percent.”

No bounce for Obama: “PPP’s first national poll since the passage of the health care bill finds Barack Obama’s approval rating basically unchanged, with 46% of voters giving him good marks to 48% who disapprove. A month ago it was a 47/48 spread. This is the 4th out of 5 national surveys in 2010 that has put Obama in negative territory. The same basic dynamics in Obama’s national polling continue to be at play — Democrats pretty universally still love him (84% approval), Republicans don’t (87% disapproval), and independents are split pretty evenly. This month they go slightly against Obama by a 45/41 margin and that leads to his overall net negative standing.” And 50 percent oppose ObamaCare, while only 45 percent support it.

No good news for congressional Democrats from Sean Trende: “I think those who suggest that the House is barely in play, or that we are a long way from a 1994-style scenario are missing the mark. A 1994-style scenario is probably the most likely outcome at this point. Moreover, it is well within the realm of possibility — not merely a far-fetched scenario — that Democratic losses could climb into the 80 or 90-seat range. The Democrats are sailing into a perfect storm of factors influencing a midterm election, and if the situation declines for them in the ensuing months, I wouldn’t be shocked to see Democratic losses eclipse 100 seats.”

No help from the Chinese on isolating Iran: “A state-owned Chinese refiner plans to ship 30,000 metric tons of gasoline to Iran after European traders halted shipments ahead of possible new UN sanctions, according to Singapore ship brokers.”

No support for Israel-bashing: “In an open letter to President Obama, the president of the World Jewish Congress expressed concern over the deterioration in relations between Israel and the United States. Ronald Lauder called on Obama to ‘end our public feud with Israel and to confront the real challenges that we face together,’ most importantly the Iranian nuclear threat. … ‘Why does the thrust of this Administration’s Middle East rhetoric seem to blame Israel for the lack of movement on peace talks? After all, it is the Palestinians, not Israel, who refuse to negotiate. … The Administration’s desire to improve relations with the Muslim world is well known. But is friction with Israel part of this new strategy? Is it assumed worsening relations with Israel can improve relations with Muslims? History is clear on the matter: appeasement does not work. It can achieve the opposite of what is intended.”

No Henry Waxman bullying session for the corporate execs who are legally required to write down tax losses from ObamaCare. Must not be such a winning issue after all.

No victory in sight for Arlen Specter. “Republican hopeful Pat Toomey for the first time registers 50% support in his race against incumbent Democrat Arlen Specter in Pennsylvania’s contest for the U.S. Senate. The latest Rasmussen Reports telephone survey of likely voters in the state shows Specter earning 40% of the vote.”

No respect for Eric Holder — even from Chuck Schumer. “Sen. Chuck Schumer (D-N.Y.) doesn’t believe Attorney General Eric Holder is being genuine when he says the Obama administration still is considering New York City as a site for the terror trial of Khalid Sheikh Mohammed. ‘We know the administration is not going to hold the trial in New York. They should just say it already,’ Schumer said in a statement.” When it was Alberto Gonzales, Schumer said an attorney general who lawmakers couldn’t trust should step down. But that was totally different — Gonzales was an incompetent Republican; Holder’s a Democrat.

No way that the Democrats follow Harry Reid on this one: “Senate Majority Leader Harry Reid’s (D-Nev.) reelection interests are putting him at odds with the centrists he has vigorously protected over the past year and a half on the issue of immigration reform. Vulnerable senators like Blanche Lincoln (D-Ark.) want to stay away from immigration reform during an election year, but political experts in Nevada say mobilizing Hispanic voters could be the key to a reelection victory for Reid, whose favorability rating is below 40 percent.”

No bounce for Obama: “PPP’s first national poll since the passage of the health care bill finds Barack Obama’s approval rating basically unchanged, with 46% of voters giving him good marks to 48% who disapprove. A month ago it was a 47/48 spread. This is the 4th out of 5 national surveys in 2010 that has put Obama in negative territory. The same basic dynamics in Obama’s national polling continue to be at play — Democrats pretty universally still love him (84% approval), Republicans don’t (87% disapproval), and independents are split pretty evenly. This month they go slightly against Obama by a 45/41 margin and that leads to his overall net negative standing.” And 50 percent oppose ObamaCare, while only 45 percent support it.

No good news for congressional Democrats from Sean Trende: “I think those who suggest that the House is barely in play, or that we are a long way from a 1994-style scenario are missing the mark. A 1994-style scenario is probably the most likely outcome at this point. Moreover, it is well within the realm of possibility — not merely a far-fetched scenario — that Democratic losses could climb into the 80 or 90-seat range. The Democrats are sailing into a perfect storm of factors influencing a midterm election, and if the situation declines for them in the ensuing months, I wouldn’t be shocked to see Democratic losses eclipse 100 seats.”

No help from the Chinese on isolating Iran: “A state-owned Chinese refiner plans to ship 30,000 metric tons of gasoline to Iran after European traders halted shipments ahead of possible new UN sanctions, according to Singapore ship brokers.”

No support for Israel-bashing: “In an open letter to President Obama, the president of the World Jewish Congress expressed concern over the deterioration in relations between Israel and the United States. Ronald Lauder called on Obama to ‘end our public feud with Israel and to confront the real challenges that we face together,’ most importantly the Iranian nuclear threat. … ‘Why does the thrust of this Administration’s Middle East rhetoric seem to blame Israel for the lack of movement on peace talks? After all, it is the Palestinians, not Israel, who refuse to negotiate. … The Administration’s desire to improve relations with the Muslim world is well known. But is friction with Israel part of this new strategy? Is it assumed worsening relations with Israel can improve relations with Muslims? History is clear on the matter: appeasement does not work. It can achieve the opposite of what is intended.”

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Enron Accounting, Obama-Style

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.

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.

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Magic 50

ObamaCare is, as any massive and hurriedly constructed government power grab is, fraught with the potential for unintended consequences. As this report explains, small businesses may have every incentive to stay small:

For critics, one of the most troubling aspects of the laws is the fines. Massachusetts has already fined more than 1,000 companies over $18 million for failing to offer medical insurance to their workers. … Such penalties make Doug Newman, owner of Newman Concrete Services in Richmond, Maine, nervous. In the past 18 months, as the economy battered the construction industry, Newman’s work force shrunk from 125 employees to just 25.

He is worried that once the economy turns and he begins to hire back workers, he’ll face a critical decision when he nears the 50-worker mark and is no longer exempt from penalties. Newman now pays 60 percent of his employees’ individual premiums and 40 percent of their family premiums.

“The 51st employee could mean $100,000 in costs. I’ve been calling it the concrete ceiling,” he said. “No employer is going to hire No. 51 if it brings all these mandates down on you, because they’re pretty onerous.”

Every small-business owner will make a similar calculation, and the obvious conclusion for most will be to forgo crossing the 50-employee threshold unless they absolutely need to and are confident of covering the marginal cost of that 51st employee. Mind you, this is at a time when the administration is engaged in massive head-scratching over how to promote job growth. Hint: don’t make it phenomenally expensive to hire that 51st worker. Perhaps if the administration had fewer political consultants and academics and more entrepreneurs they’d think about the impact of their historic handiwork. Small-business owners certainly are:

Don Day is also worried. Day owns eight small businesses in McKinney, Texas, including two restaurants, a boutique hotel and several retail shops. Although he employs 125 workers, he offers health care for just a few key employees. Just an extra $200 a month per employee for health care could set him back hundreds of thousands of dollars a year — a cost he can’t afford. “It’s not just me, it’s every small business across this land,” he said. “A lot of small businesses are going to go out of business.”

Henry Waxman will no doubt start dragging such nonbelievers in front of his committee to excoriate them for their negativity. But one hopes that saner heads will eventually prevail in Washington as ObamaCare begins to take its toll on the people and businesses that invest, hire, and create wealth in this country.

ObamaCare is, as any massive and hurriedly constructed government power grab is, fraught with the potential for unintended consequences. As this report explains, small businesses may have every incentive to stay small:

For critics, one of the most troubling aspects of the laws is the fines. Massachusetts has already fined more than 1,000 companies over $18 million for failing to offer medical insurance to their workers. … Such penalties make Doug Newman, owner of Newman Concrete Services in Richmond, Maine, nervous. In the past 18 months, as the economy battered the construction industry, Newman’s work force shrunk from 125 employees to just 25.

He is worried that once the economy turns and he begins to hire back workers, he’ll face a critical decision when he nears the 50-worker mark and is no longer exempt from penalties. Newman now pays 60 percent of his employees’ individual premiums and 40 percent of their family premiums.

“The 51st employee could mean $100,000 in costs. I’ve been calling it the concrete ceiling,” he said. “No employer is going to hire No. 51 if it brings all these mandates down on you, because they’re pretty onerous.”

Every small-business owner will make a similar calculation, and the obvious conclusion for most will be to forgo crossing the 50-employee threshold unless they absolutely need to and are confident of covering the marginal cost of that 51st employee. Mind you, this is at a time when the administration is engaged in massive head-scratching over how to promote job growth. Hint: don’t make it phenomenally expensive to hire that 51st worker. Perhaps if the administration had fewer political consultants and academics and more entrepreneurs they’d think about the impact of their historic handiwork. Small-business owners certainly are:

Don Day is also worried. Day owns eight small businesses in McKinney, Texas, including two restaurants, a boutique hotel and several retail shops. Although he employs 125 workers, he offers health care for just a few key employees. Just an extra $200 a month per employee for health care could set him back hundreds of thousands of dollars a year — a cost he can’t afford. “It’s not just me, it’s every small business across this land,” he said. “A lot of small businesses are going to go out of business.”

Henry Waxman will no doubt start dragging such nonbelievers in front of his committee to excoriate them for their negativity. But one hopes that saner heads will eventually prevail in Washington as ObamaCare begins to take its toll on the people and businesses that invest, hire, and create wealth in this country.

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Flotsam and Jetsam

But it was supposed to help the Democrats: “Gallup’s most recent polling of the generic ballot shows a net five-point bounce for the Republicans, post-health care passage. The poll of registered voters now shows a lead of 47%-44%; Republicans had trailed by a similar 47%-44% margin in the first and second weeks of March, and by a 47%-45% margin in last week’s tracking results.  The loss for the Democrats comes mostly from independent voters; the gain for Republicans comes from Republican and Democratic voters turning toward the GOP.”

But it hasn’t, explains Jeffrey Anderson: “The Democrats had optimistically claimed that turning a deaf ear to the American people and passing their unpopular bill would make it popular. But Scott Rasmussen observes that ‘the overriding tone of the data is that passage of the legislation has not changed anything. Those who opposed it before now want to repeal it. Those who supported the legislation oppose repealing it.’ Unfortunately for the Democrats, the former number is a lot bigger than the latter one.”

But Obama said voters would learn to love it once it passed: “In addition to sharing Republicans’ and Democrats’ concerns about the bill’s failure to address healthcare costs, and sharing Republicans’ concerns about government intervention and costs, the majority of independents agree with Democrats that the bill doesn’t do enough to regulate the healthcare industry. As a result, independents concur with four of the five critiques tested, one more than members of either political party do.”

But Obama said voters didn’t care about “process”: Gallup asked “whether Americans believe the methods Democratic leaders used to secure passage of the bill represented ‘an abuse of power’ or ‘an appropriate use’ of the majority party’s power in Congress. Nearly 9 in 10 Republicans see it as abuse of power, whereas a smaller majority of Democrats (70%) call it an appropriate use of power. The majority of independents agree with most Republicans on this question.”

But the Republican insiders told us that Charlie Crist was the “safe” choice: “Former FL GOP chair Jim Greer is the subject of a criminal investigation after an audit showed he may have profited from party activity, according to sources with knowledge of the investigation. … Under pressure from major donors and party elders, Greer announced in early Jan. he would resign in Feb. Donors had been upset with his stewardship of party finances, and with spending many saw as beneficial to Gov. Charlie Crist (R), Greer’s major backer when he became chair. Greer is supporting Crist in the primary against ex-FL House Speaker Marco Rubio (R), which did not sit well with the state’s activist base.”

But don’t they know that Henry Waxman will haul them in front of his committee to read them the riot act? “Boeing Co. will take a charge of $150 million due to the recent health care overhaul legislation, the aircraft maker said Wednesday. The charge will hurt earnings by 20 cents per share in the first quarter of 2010. In 2013 Boeing will no longer be able to claim an income tax deduction related to certain prescription drug benefits for retirees. Accounting rules require that the company take the charge during the period the legislation is enacted. Several other companies have said they will take accounting charges due to the health care reform bill including AT&T, AK Steel Corp., Caterpillar Inc. and 3M Co.”

But what about the rest of the country? “The top House Republican says the White House’s decision to begin offshore drilling across huge expanses of ocean is a ‘positive step,’ but he’s still blasting the Obama administration for keeping areas on the West Coast closed to such exploration. House Minority Leader John Boehner, an Ohio Republican, said that the administration ‘continues to defy the will of the American people,’ who he says supported a 2008 congressional decision to allow oil exploration off the Pacific Coast and Alaska.”

But Obama was going to keep unemployment at 8 percent and “pivot” from ObamaCare to job creation: “Private-sector employers unexpectedly shed 23,000 jobs in March, according to a measure of private-sector employment released this morning, reminding us of the very choppy nature of this recovery.”

But it was supposed to help the Democrats: “Gallup’s most recent polling of the generic ballot shows a net five-point bounce for the Republicans, post-health care passage. The poll of registered voters now shows a lead of 47%-44%; Republicans had trailed by a similar 47%-44% margin in the first and second weeks of March, and by a 47%-45% margin in last week’s tracking results.  The loss for the Democrats comes mostly from independent voters; the gain for Republicans comes from Republican and Democratic voters turning toward the GOP.”

But it hasn’t, explains Jeffrey Anderson: “The Democrats had optimistically claimed that turning a deaf ear to the American people and passing their unpopular bill would make it popular. But Scott Rasmussen observes that ‘the overriding tone of the data is that passage of the legislation has not changed anything. Those who opposed it before now want to repeal it. Those who supported the legislation oppose repealing it.’ Unfortunately for the Democrats, the former number is a lot bigger than the latter one.”

But Obama said voters would learn to love it once it passed: “In addition to sharing Republicans’ and Democrats’ concerns about the bill’s failure to address healthcare costs, and sharing Republicans’ concerns about government intervention and costs, the majority of independents agree with Democrats that the bill doesn’t do enough to regulate the healthcare industry. As a result, independents concur with four of the five critiques tested, one more than members of either political party do.”

But Obama said voters didn’t care about “process”: Gallup asked “whether Americans believe the methods Democratic leaders used to secure passage of the bill represented ‘an abuse of power’ or ‘an appropriate use’ of the majority party’s power in Congress. Nearly 9 in 10 Republicans see it as abuse of power, whereas a smaller majority of Democrats (70%) call it an appropriate use of power. The majority of independents agree with most Republicans on this question.”

But the Republican insiders told us that Charlie Crist was the “safe” choice: “Former FL GOP chair Jim Greer is the subject of a criminal investigation after an audit showed he may have profited from party activity, according to sources with knowledge of the investigation. … Under pressure from major donors and party elders, Greer announced in early Jan. he would resign in Feb. Donors had been upset with his stewardship of party finances, and with spending many saw as beneficial to Gov. Charlie Crist (R), Greer’s major backer when he became chair. Greer is supporting Crist in the primary against ex-FL House Speaker Marco Rubio (R), which did not sit well with the state’s activist base.”

But don’t they know that Henry Waxman will haul them in front of his committee to read them the riot act? “Boeing Co. will take a charge of $150 million due to the recent health care overhaul legislation, the aircraft maker said Wednesday. The charge will hurt earnings by 20 cents per share in the first quarter of 2010. In 2013 Boeing will no longer be able to claim an income tax deduction related to certain prescription drug benefits for retirees. Accounting rules require that the company take the charge during the period the legislation is enacted. Several other companies have said they will take accounting charges due to the health care reform bill including AT&T, AK Steel Corp., Caterpillar Inc. and 3M Co.”

But what about the rest of the country? “The top House Republican says the White House’s decision to begin offshore drilling across huge expanses of ocean is a ‘positive step,’ but he’s still blasting the Obama administration for keeping areas on the West Coast closed to such exploration. House Minority Leader John Boehner, an Ohio Republican, said that the administration ‘continues to defy the will of the American people,’ who he says supported a 2008 congressional decision to allow oil exploration off the Pacific Coast and Alaska.”

But Obama was going to keep unemployment at 8 percent and “pivot” from ObamaCare to job creation: “Private-sector employers unexpectedly shed 23,000 jobs in March, according to a measure of private-sector employment released this morning, reminding us of the very choppy nature of this recovery.”

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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.

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Men in Black

The assault on Blackwater in particular and on the private military industry in general continues unabated, largely because leftists are eager to “prove” that the Bush administration, in cahoots with out-of-control mercenaries, is raping Iraq. For examples, see these typically simplistic columns by Maureen Dowd and Paul Krugman, which essentially parrot the one-sided brief against Blackwater prepared by Rep. Henry Waxman’s Democratic staffers.

The fact that Blackwater’s founder, Erik Prince, happens to be a conservative who has donated to Republican candidates and is part of a wealthy Republican family in Michigan makes his company a particularly attractive target. In reality, as viewers of Tuesday’s hearings before Waxman’s committee could see, Prince does not easily conform to the image of a greedy and corrupt capitalist. With his blond crewcut and ramrod posture, he is about as all-American as you can get, and, though he came from a background of privilege, he volunteered to serve as a Navy SEAL officer—one of the most dangerous and demanding assignments in the entire armed forces.

Read More

The assault on Blackwater in particular and on the private military industry in general continues unabated, largely because leftists are eager to “prove” that the Bush administration, in cahoots with out-of-control mercenaries, is raping Iraq. For examples, see these typically simplistic columns by Maureen Dowd and Paul Krugman, which essentially parrot the one-sided brief against Blackwater prepared by Rep. Henry Waxman’s Democratic staffers.

The fact that Blackwater’s founder, Erik Prince, happens to be a conservative who has donated to Republican candidates and is part of a wealthy Republican family in Michigan makes his company a particularly attractive target. In reality, as viewers of Tuesday’s hearings before Waxman’s committee could see, Prince does not easily conform to the image of a greedy and corrupt capitalist. With his blond crewcut and ramrod posture, he is about as all-American as you can get, and, though he came from a background of privilege, he volunteered to serve as a Navy SEAL officer—one of the most dangerous and demanding assignments in the entire armed forces.

Nor do most of Prince’s employees conform to the stereotype of drunken gunslingers shooting up a town for fun. Most are straight arrows like him with extensive experience in military Special Operations or big-city police SWAT teams. That is not to say that some of them don’t make mistakes or misbehave. But so do some soldiers. The attempts to demonize an entire industry based on the misbehavior of a few are akin to attempts by some to demonize the entire American armed forces based on what happened at Abu Ghraib.

In the Los Angeles Times this morning, I try to put the promise and problems of the private military industry into perspective. One of the points I make is that if we can impose more accountability and oversight on security contractors, we can make more extensive use of them in certain situations where we are not willing to commit our armed forces.

One example I mention is Darfur. Another example is provided in the newest issue (not yet online) of the Foreign Policy Research Institute’s journal Orbis, which contains an essay called “Blackwaters for the Blue Waters: The Promise of Private Naval Companies.” The author, Claude Berube, a professor at the Naval Academy, suggests reviving the ancient practice (explicitly recognized in the Constitution) of issuing “letters of marquee” to “privateers,” who would supplement the efforts of our navy in combating drug smugglers, terrorists, and pirates on the high seas. This seems to me a compelling idea. Our navy now has fewer than 300 ships and every single additional ship will cost billions of dollars. Employing private companies at sea could be a cost-effective alternative.

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