Corporations Hit Hard By ObamaCare

Within hours of ObamaCare passing through the House, corporations across America announced that the healthcare insurance reform was going to negatively impact their bottom lines. And that is not a future estimate, that is a reality for this year. One of the loudest arguments against ObamaCare has been the impact on small business, but revelations of the effects on large corporations do not bode well for an economic recovery.

Deere & Company announced last week that the Patient Protection and Affordable Care Act will adversely impact its expenses for fiscal 2010. Expenses are forecast to be $150 million higher in the second quarter of 2010. The company released a statement that included, “This impact was not included in the 2010 outlook for net income attributable to Deere & Company of approximately $1.3 billion disclosed in the company’s first-quarter earnings report on February 17th.”

Caterpillar Inc. also announced last week that their expenses would rise by $100 million in this first year alone. In a March 18th letter, Gregory S. Folley who is vice president and chief human resources officer at Caterpillar wrote, “We can ill afford cost increases that place us at a disadvantage versus global competitors.”

3M Co. was another corporation that did not include the negative impact of healthcare reform on their expenses for 2010 either, which amounts to a one-time charge of $85 million. Other companies joining the rapidly growing list include Valero Energy, AK Steel Corp. and AT&T. The latter announced that their first quarter hit would cost them $1 billion.

The National Retail Federation wrote in a letter, “The measure would drive up labor costs to the point of forcing job losses. A ‘transparent procedural ploy’ for passing the package would harm Congress’s reputation.”

These forecasts are just for this fiscal year alone. One can imagine how much these expenses will increase with each subsequent year. And common sense tells us that these added expenses will not only be passed on to the customers, but many of these corporations will have to face the bottom line that will lead them to cutting benefits and jobs. Any supposed deficit savings will be easily overshadowed by these increased “taxes” to We The People.

UPDATE:  And the news gets worse for these corporations.  The government is going to conduct show trials and demand sensitive internal paperwork from these companies to prove their claims that they will be hit with these losses.  Rep. Henry Waxman is heading up this effort.  The trial is set for April 21st.  Byron York in the Washington Examiner reports:

Waxman is also demanding that the executives give lawmakers internal company documents related to health care finances — a move one committee Republicans describes as “an attempt to intimidate and silence opponents of the Democrats’ flawed health care reform legislation.”

…Waxman has ordered the executives to explain themselves at an April 21 hearing before the Energy and Commerce Committee’s investigative subcommittee. That subcommittee just happens to be chaired by Rep. Bart Stupak, the Michigan Democrat who held out his vote on health care reform until a few hours before final passage on March 21, giving the bill’s opponents the unfounded hope that he might vote against it.

Waxman’s demands came Friday in letters to several executives. “After the president signed the health care reform bill into law, your company announced that provisions in the law could adversely affect your ability to provide health insurance,” Waxman wrote to Randall Stephenson, chairman and CEO of AT&T. A few hours before Waxman sent his letter, AT&T announced it will take a $1 billion charge against earnings because of the tax provision in the new health bill. AT&T also said it will be “evaluating prospective changes” to its health care benefits for all workers…

Waxman’s request could prove particularly troubling for the companies. The executives will undoubtedly view such documents as confidential, but if they fail to give Waxman everything he wants, they run the risk of subpoenas and threats from the chairman. And all as punishment for making a business decision in light of a new tax situation.