I Told You So Part 5: AT&T to Book $1 Billion Cost on Health-Care Reform – Called Before Congress To Explain Their Numbers
The Health-Control Bill has been sold as a “cost-saving” program. Right… One problem though, now that companies are looking at the bill to see what it will cost them [and us], the news isn’t good.
March 26 Bloomberg — AT&T Inc. will book $1 billion in first-quarter costs related to the health-care law signed this week by President Barack Obama, the most of any U.S. company so far. A change in the tax treatment of Medicare subsidies triggered the non-cash expense, and the company will consider changes to the benefits it offers current and retired workers, Dallas-based AT&T said today in a regulatory filing. AT&T, the biggest U.S. phone company, joins Caterpillar Inc., AK Steel Holding Corp. and 3M Co. in recording non-cash expenses against earnings as a result of the law. Health-care costs may shave as much as $14 billion from U.S. corporate profits, according to an estimate by benefits consulting firm Towers Watson. AT&T employed about 281,000 people as of the end of January.
Of course Congress is not happy with AT&T’s filing. Why? Well, it makes Barack and Congress look “Bad“. Their response? AT&T is now being hauled before Congress to “explain” their numbers.
March 27 Bloomberg — Representative Henry Waxman called the chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. to provide evidence to support costs the companies plan to book related to the new health-care law.
Waxman of California, chairman of the House Energy and Commerce Committee, and subcommittee Chairman Bart Stupak of Michigan released letters they wrote to the executives, saying their plans to record expenses against earnings as a result of the law contradict other estimates. The lawmakers requested the executives appear at hearing Stupak plans on April 21.
“The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern,” Waxman and Stupak, both Democrats, wrote in the letters yesterday. “They also appear to conflict with independent analyses.”
So companies [that make payroll, have to turn a profit. and answer to shareholders], not only know less than Congress [which is $14 Trillion in the red] when it comes to crunching numbers, but are now suspect and must be strong-armed by our own elected officials. Nice….