Monday, March 29, 2010

Damned if They Do, Damned if They Don't

Under the SEC rules, large corporations that participate in the stock exchange must report changes in the financial state of the company, lest they be fined or sued for trying to manipulate the market.

Many corporations have started to come out with estimates about how much the new Obamacare will cost them. Of course, this paints the new legislation in a bad light, and the Democrats can't tolerate that. Now the Democrats want to haul the CEOs of these companies into a hearing to browbeat them over how their estimates don't match the party line about how the new healthcare legislation "will expand coverage and bring down costs."


Jeff said...

This is all due to a 2003 legislation that had the government give companies a large subsidy for each retiree in return for the company keeping the retiree on a prescription drug plan so the retiree would not go to Medicare Part D. The companies could also deduct the subsidies from their income taxes. I assume this was enacted to promote a smaller government by shifting senior insurance from the feds to private insurers.

Under the new plan, the companies will still get the taxpayer-funded subsidies, but now they have to actually declare it as income. The retirees still qualify for Medicare Part D and get any necessary medications under Medicare. It primarily affects those large companies (and unions) that were guzzling taxpayer money, particularly those who now have this retiree coverage written into contracts with their respective unions.

I just find it ironic that this whole thing is caused by the government paying for a company to take care of their own retirees, and now that the companies get effectively paid less for providing insurance to retirees, it is considered a loss of profit. And no, I don't believe that this latest legislation will somehow save the companies money either, unless it means they cut off all retirees from health insurance plans and are able to reduce their premiums somehow. I just find it ironic how these additional "costs" were created. It appears your post title applies to the federal government here too - whether they spend money or attempt to cut costs, many are still unhappy with whatever they do because every action will adversely affect someone somewhere. . Has a lot of rah-rah-go-health-care propaganda, of course, but it does cover a larger scope of the issue than anything else I could find.

Nate said...

Thanks for the additional info, Jeff. That article does bring more light to the subject. Unfortunately it only serves to underscore my opinion that whenever government intervenes in the private sector by creating new rules and regulations, 95% of the time the results turn out to be bad either in the short term or over the long haul. That law of unintended consequences keeps coming back to bite. If the government would stop trying to make everything all better, it actually might happen.

J. Paige Edwards said...

Hallelujah you are here Nate! Someone I can really talk politics with!!! Cody showed me your blog and I couldn't ask him fast enough for your link... Speak on Brother!