AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.
The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.
Oops. That wasn't supposed to happen. And now Congress is getting involved. . . by attempting to intimidate the companies for mentioning it. Powerline reprints a letter that the odious Henry Waxman (and his new best pal, Bart Stupak) sent to AT&T after it had made the announcement -- page one is here, page two is here. Waxman is very good at running star chambers and his goal is to cow the corporate execs into disavowing such statements, lest they contradict the promises that Waxman, Obama, Pelosi, Stupak and the rest of our protectors have made regarding this legislation.
There's a problem with all that, though -- the reason that AT&T has to disclose such things is because of another federal rule, Sabanes-Oxley. Section 409 requires the following:
Issuers are required to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations. These disclosures are to be presented in terms that are easy to understand supported by trend and qualitative information of graphic presentations as appropriate.
Of course, if you follow the law and disclose things that Henry Waxman doesn't like, you'll be dragged in front of his committee to explain yourself.
In most cases, the truth is an absolute defense. That may no longer be true. As if you needed any other reason to vote out the Democrats in November, I can think of few better reasons than taking the gavel out of Henry Waxman's hand.
15 comments:
I've said this several times but it really is worth repeating:
The burden is not on the opponents to prove the unintended consequences will, without a doubt, happen; it is up to the proponents to show and to prove there are measures prohibiting and preventing those unintended consequences.
Sixty years ago this same mistake happened with wage and price controls and look at the unintended consequences we see today.
Mr. D, I don't like your negative attitude. Why do you hate children? Come November, I am voting for puppies and happiness!
i'll be voting for kittens.
i like kittens.
but you know what i'd really like? is to be hauled before one of waxman's committees.
that would be a dream come true.
and all the others who have went before me would say "why didnt i think of telling him do that?"
This is depressing, but your attitude is amusing. In a depressing way. Love it though. A huge corporation responds like the souless a**holes they are, and it's the fault of HCR! What about the Conservative idea of personal responsibility? These don't apply to corporations? (Even though, according the the Supreme Court, Corps are people, too!) They're allowed to feed off government money by proxy? It's like Caribou paying their baristas sh*t because - as the CEO once said on NPR - they get tips! Such a load a crap. Incidentally, that is the MAIN reason I never tip baristas, ever. Sounds cold, huh? I guess I like having my own money more than I like the Caribou CEO having my own money - another Conservative value, right? You can get behind me on that one?
Since I don't work there anymore, I can say that my job in MN was working for AT&T. Their health plan was simply awful. But cutting it even more is most definitely NOT the solution. I think they're one of the absolute worst countries for taking care of their employees in the entire nation, and I wish I never had to give them anymore money again. Unfortunately, I am in love with my iPhone. :(
*absolute worst companies, I meant to say - not countries.
Amanda, I'm with you on this one. These companies need to do what the government does. Print more money. It's just ridiculous that they're using HCR as a fig leaf to stick it to their employees. Next thing you know, they'll be claiming that they have to lay people off because they're losing money.
A huge corporation responds like the souless a**holes they are, and it's the fault of HCR!
Huh? Wha? Holy miss the point entirely, Batman!
They're allowed to feed off government money by proxy?
So when the government takes less money in taxes from a company, that means the company is "feeding off the government?" Holy Juan Peron!
It's like Caribou paying their baristas sh*t because - as the CEO once said on NPR - they get tips! Such a load a crap. Incidentally, that is the MAIN reason I never tip baristas, ever. Sounds cold, huh? I guess I like having my own money more than I like the Caribou CEO having my own money - another Conservative value, right? You can get behind me on that one?
I generally buy my coffee from the Holiday station on County Road 42 in Burnsville, Amanda. It's damned good. :) If you don't like Caribou's policies, which are pretty much universal in the food service industry I might add, you can eat at home. I pretty much tip 20% across the board, by the way, including the rare trip to Caribou or Starbucks. And if I don't have 20% to tip, I don't go out to dinner.
Since I don't work there anymore, I can say that my job in MN was working for AT&T. Their health plan was simply awful. But cutting it even more is most definitely NOT the solution.
So what is the solution? Are you going to decide what companies should pay? Should the government? Hey, why not just nationalize everything then? Then it will be fair. You could change your name to Evita.
like mark, i dont go if i dont have an extra 20%. sometimes its more.
but i kinda like the idea that i'm not only being cool to somebody who has to deal with a lot of uncool people, there is also that aspect of income that is not taxed.
if baristas were paid more, you would also pay for the privilage of accessing one.
and i just hijacked this thread...
Amanda, you do understand that not only the shareholders of Medtronic but also the thousands and thousands of Medtronic employees that have stocks through their employee stock ownership plan will be financially hurt if the company doesn't respond with a change in business plan to keep company profits.
Where do you think the billions in new medical device taxes are going to come from, the tooth fairy?
Hint, people will be laid off. Thousands already have in this Obama Depression.
This isn't about coffee, but since I went there anyway, you contributed - Nobody should tip baristas. That is not "a service." It would be like tipping at McDonald's or Taco Bell. They make the item in a uniform way, and then hand it to you from their place behind the counter.
If you don't like Caribou's policies, which are pretty much universal in the food service industry I might add, you can eat at home. - That sentence sounds mean.
I don't think I require a defense, but for the record, I usually do make my own coffee at home - to save money.
About the topic - if they cut benefits to health plans, aren't they forcing employees to switch to the government health plan? That's what I'm talking about.
So what is the solution? Are you going to decide what companies should pay? Should the government? Hey, why not just nationalize everything then? Then it will be fair. You could change your name to Evita.
When I first started there, the health plan was pretty good - because it was a smaller company - AT&T Wireless. You might remember that they were independent from AT&T before being bought by Cingular. (Etc.) I'm not suggesting a "solution;" I'm not that smart. But I'm not so stupid to buy the idea that there's just no way out of some impossible hole for the poor little megathon corporations in the US.
That sentence sounds mean.
ROFLMAO. I think you can take a little dig, Amanda. You've never struck me as the type of person who needs a fainting couch when the invective starts to fly.
It would be like tipping at McDonald's or Taco Bell. They make the item in a uniform way, and then hand it to you from their place behind the counter.
Not from what I've seen. How much cream do you want? How much whipped cream? Do you want chocolate or caramel? Is it a latte or an espresso?
Look, the point is this: If I object to the service being rendered by any company, I take my business elsewhere. I don't demand that the company conform its practices to my wishes. I don't presume to know their business plan or make judgments on their morality based on the small amount of information I have available to me at the point of purchase. Your mileage may vary.
About the topic - if they cut benefits to health plans, aren't they forcing employees to switch to the government health plan? That's what I'm talking about.
Give that woman a cigar. Of course that's the idea. And that's what the government wants, Amanda. This is a greased path to socialized medicine. That was the intent all along.
Amanda, you are cheap. One would think that a champion of the masses would understand the need for tips for the poor uneducated underprivliged workers.
Remember that that if you short the service industry, the service industry has a way at getting back at you. A loogie in the coffee may be in your future.
AT&T are soulless recti because they're paying attention to their accounting books and know what they can, and cannot, spend and still have a viable business?
We need more soulless recti in our country that realize that profit is not a bad thing, but rather is THE sign for a business that they are meeting the needs of their customers well.
Unfortunately, I am in love with my iPhone. :(
Presumably you take your fingers out of your ears and stop chanting "La-la-la-can't hear you when you" when you use that phone.
The point here is that AT&T, Caterpillar, Verizon - any publicly-traded company, whether made up of slumming saints or dedicated a-holes - is required to report to its shareholders and to analysts any material change to its projected earnings. The significant increase in healthcare taxes and the subsequent impact on earnings per share is very material. To not report it would not only break the law it would also result in a very negative backlash from the analysts who, I can assure you from personal experience in my Day Writer job, absolutely hate surprises.
Earnings per share is what motivates investors to put capital into a company. Available capital is what companies use to invest in infrastructure, technology and services to help it attract more customers (since most can't force people to buy their product). If done successfully, there are more profits, which go to shareholders, and brings more investment. Along the way, most companies have realized that in a competitive environment you also need to attract and retain talented people and to do that you have to have better salaries and benefits. Employees are attracted to companies with a reputation for good pay and bennies, especially if these companies pay a premium for excellence. In fact, you might say that these employees - in their enlightened self-interest - are driven by PROFIT; i.e., the return they realize on the time they invest in the job. If they don't like their employers value-proposition they can leave (for now - not always the case in a "Command and Control" economy).
Now, AT&T was perhaps a bit self-serving in calling attention to it's statement ... but self-serving isn't necessarily dishonorable in capitalism (it's the hidden self-serving (which Sarbanes-Oxley aims to illuminate) that causes most of the problems. AT&T had to report the financial impact. They also needed to tell the investor community what strategies they might have to employ to maintain earnings. This could well mean staff cuts and reduced benefit plans - though this could be a cut-off-your-nose-to-spite-your-face measure since you still need a qualified and capable workforce. Another option, of course, is to....raise prices to cover their expenses and provide return on capital. So, how much do you love that iPhone, Amanda? Would you pay another $50 a month? Probably not. Would you pay another $5 or $10? You might grit your teeth a little, but you'll likely do it. Unless, of course, someone else comes out with a product a bit better and/or a bit cheaper...brought to the market as a result of the capital they raised and the research, development and advertising they were able to do.
Alternatively, you could ask the government to demand/require that Apple sell you an iPhone at a loss.
Hmmm. I wonder what that might do to the supply of iPhones?
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