What's in the bill? Rep. Waxman declares war on accounting requirements for which he voted

Even members of Congress who voted for the bill appear to be  caught off-guard by the provisions of ObamaCare. Like Henry Waxman, who seems to want to portray as Enemies of the State the CEOs of any companies which report changes in their financial forecasts based upon future expenses expected to be imposed by the bill. Meg McArdle (who voted for Obama):

Accounting basics: when a company experiences what accountants call “a material adverse impact” on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required to record the negative impact–”to take the charge against earnings”–as soon as it knows that the change is reasonably likely to occur.

This makes good accounting sense. The asset on the balance sheet is now less valuable, so you should record a charge. Otherwise, you’d be misleading investors.

The Democrats, however, seem to believe that Generally Accepted Accounting Principles are some sort of conspiracy against Obamacare, and all that is good and right in America.

Glenn Reynolds:

I think when they planned for ObamaCare’s costs to come online post-election, they didn’t know enough to realize that accounting rules (and SEC regulations) would require companies to act now. Just another example of the “knowledge problem” confronting economic planners and regulators . . . . 

UPDATE: Reader Bill Hesson emails: “Would somebody please explain to the gentleman from California that the incessant prosecution of business executives for nothing more than excessive optimism is likely to have consequences that include pessimistic accounting?" . . .

ANOTHER UPDATE: Reader Brad Garton writes: “What’s really funny is that among other things Sarbanes-Oxley requires them to make the impacts public, and Waxman voted for that. Apparently he didn’t read that bill either.”

The country's in the very best of hands . . . .