March 28, 2010

Excerpt of the Day: WSJ on Obama Administration Intimidation of Companies Disclosing What They Must

From this weekend (link may require subscription), on the administration’s immature attempt at intimidating companies for daring to tell their shareholders and the public that ObamaCare has changed their retiree medical benefits cost structure for the worse:

The ObamaCare Writedowns
The corporate damage rolls in, and Democrats are shocked!

It’s been a banner week for Democrats: ObamaCare passed Congress in its final form on Thursday night, and the returns are already rolling in. Yesterday AT&T announced that it will be forced to make a $1 billion writedown due solely to the health bill, in what has become a wave of such corporate losses.

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.

Gabriel at Ace’s place links to a straight-news WSJ item that may also be subcriber-limited telling us that the total cost to S&P 500 companies will be $4.5 billion.

Again, accounting rules REQUIRE such adjustments when circumstances dictate the need for them. A new law restructuring one-sixth of the economy is obviously one such circumstance. Surely the companies’ CFOs and outside CPA firms had discussions about the issue, and arrived at professional judgments that such adjustments and announcements of them were necessary. This is what serious stewards of others’ wealth do.

The administration and Congress surely know this. But since they don’t like it, they’re going on a witch hunt anyway. This will force others who haven’t yet made the disclosure to do a cost-benefit calculation that should not be necessary: Should we do what the law and financial accounting require? Or should we hush up so we can keep the administration off our backs and thereby risk eventually being sued by our shareholders and/or the SEC?

This is of a piece with the administration’s intimidation of Humana last year when it dared to tell its Medicare Advantage members that ObamaCare would raise their premiums, as of course it will — if it doesn’t eventually eliminate such plans entirely.

This is what an oppressive regime does to private-sector (for the time being) players who are merely doing their jobs to the best of their abilities. This is what statism looks like.

___________________________________________________

UPDATE: Mark Steyn capsulizes (HT to frequent commenter dscott) –

On the day President Obama signed Obamacare into law, Verizon sent an e-mail to all its employees warning that the company’s costs “will increase in the short term.” And in the medium term? Well, U.S. corporations that are able to do so will get out of their prescription-drug plans and toss their retirees onto the Medicare pile. So far just three companies — Deere, Caterpillar, and Valero Energy — have calculated that the loss of the deduction will add a combined $265 million to their costs. There are an additional 3,500 businesses presently claiming the break. The cost to taxpayers of that 28 percent benefit is about $665 per person. The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person. So we’re roughly doubling the cost of covering an estimated 5 million retirees.

Positivity: Diocese of Columbus launches Facebook application to encourage vocations

Filed under: Positivity — Tom @ 6:57 am

From Columbus, Ohio:

Mar 26, 2010 / 07:10 am

The Office of Vocations for the Diocese of Columbus has hired a marketing firm to develop and manage a Facebook application called Face Forward Columbus to help Catholic youth in central Ohio hear their vocation to the priesthood, religious life or marriage.

“Our responsibility is to preach the Good News wherever people are gathered,” said Fr. Jeff Coning, Director of Vocations for the Diocese of Columbus. “Kids are now gathering out on cyberspace, making it the new town square. We need to be in that town square interacting.”

The Office of Vocations recently hired Dublin, Ohio-based MJ2 Marketing to design, develop, and monitor the page. According to the diocese, it intends to reach 30,000 youth.

The page, described as a “dynamic, front-end gaming application,” has attracted more than 1,000 fans in its first 40 days.

Launched in December 2009, Face Forward is intended as a place where Catholic youth can gather to discuss real-life issues while exploring their faith and its relevance in their lives. …

Go here for the rest of the story