Exciting Discoveries in the Health Care Bill

Nancy Pelosi promised us that we would be excited when they passed the bill and we started to discover what is in it. We're starting to find out now.

One big surprise for many people is mandatory massive charges against earnings for major employers in anticipation of new taxes, which will undoubtedly increase unemployment. Followed by threats which place those employers in a legal double-bind situation:

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.

Who, besides companies with tight political connections, would want to do business in this threatening climate?

Andy McCarthy:

. . .  I worked for many years in the U.S. Attorney's Office in whose backyard was Wall Street. If a company like AT&T failed to make a legally mandated restatement of its financial position while continuing to participate in the capital markets, it would be investigated and the responsible management officials would likely find themselves prosecuted while the SEC, concurrently, went after the company and its officiallys in civil enforcement suits. There are prosecutors and investigators who would salivate at the prospect of doing such a career-making case.


If we are now under a system where disclosure gets you a public whipping and other threats by the Powers That Be while nondisclosure promises the ruinous expenses of defending against criminal investigations and civil enforcement, this is no longer anything but a thugocracy.

Furthermore, the section of the bill which led to these massive charges against earnings will lead employers to drop prescription coverage for retirees, which will place more people in the federal program, making the Democrats' claim of "deficit neutrality" even more laughable.  Captain Ed:

Over the past year, I’ve repeatedly warned about the dangers of static tax analysis. That process considers changes in tax policy without considering its impact on behavior. The closure of this “loophole,” as Robert Gibbs called it yesterday, is a perfect example of this stunted thinking.

The Democrats in Congress argued that they would gain $5.4 billion in revenue by eliminating the tax break enacted in the 2003 Medicare Part D program as an incentive for businesses to keep their retirees out of the Medicare system. Instead, they have given businesses a reason to dump their retirees out of the private networks and into the Part D system now. Not only will the expected tax revenues never appear, but now we will have to spend a lot more money covering those prescriptions out of public funds. The seniors in these programs will suffer most of all, as the Part D coverage is vastly inferior to the private plans offered by businesses in the private sector.

Who could have foreseen this? Well, businesses have been trying to get attention to this problem for months, as the AP somewhat belatedly reports . . .

Update: Congress mandated the disclosures which the Democrats now wish to hide, in response to the Enron scandal.