Well, the stories of how health care “reform” is going to slowly chip away at economic growth in America are only going to get more extensive and details from here on out, but here is one of the first signs of how this bill is going to wind up hurting Americans more than it will help them. From 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’s announcement was followed about an hour later by 3M, the St. Paul, Minnesota-based maker of products ranging from Post-It Notes to respiratory masks. 3M said it expects a one-time expense of $85 million to $90 million after tax, or about 12 cents a share, in the first quarter because of the new law, according to a statement. 3M had about 75,000 employees as of Feb. 5. […]
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.
There are two key things here: first, $14 billion is no small chunk of change. In fact that amounts to about 1 percent of GDP. Imagine what companies in America could do with $14 billion other than compliance costs with the new health care bill. Second, given the focus on jobs for the administration, isn’t this a bit counterproductive? If they want firms hiring people, adding to their costs and taking away from corporate profits that could be used to expand business if necessary won’t help unemployment.