In the classic fish-out-of-water comedy, "My CousinVinny," Joe Pesci plays Vincent Gambini, a fumbling Brooklyn attorneyattempting to acquit two boys of a murder charge in a backwoods Alabama town.
When he brags to his tartish girlfriend that theprosecutor willingly supplied him with a witness list, she replies in asneering "Noo Yawk" vernacular, "Guess what? He has to. It's cawld dis-cloze-zuh."
I recalled that guilty pleasure of a movie last week uponhearing that Rep. Henry Waxman, D-Calif., chair of the House Energy andCommerce Committee and one of the primary architects behind the (knee) Cap andTrade legislation, has apparently taken umbrage to the fact that several largecompanies have announced massive write-downs related to the passage ofObamaCare and its effect on retiree drug coverage.
Among those companies who have done nothing more thanadhere to GAAP include AT&T, which declared a $1 billion writedown, Deere& Co., $150 million, Caterpillar, $100 million, Boeing, $150 million and3M, $90 million.
Waxman, who apparently cannot fathom how ObamaCare couldpossibly cost companies money instead of the promised savings it would deliver,has summoned them to appear on Capitol Hill April 21 to explain theiraccounting methods.
Rep. Waxman, along with Rep. Bart Stupak, D-Mich., wroteto AT&T and said, "The new law is designed to expand coverage andbring down costs, so your assertions are a matter of concern."
To put this absurdity and curious lack of accountingknowledge into perspective, let's back up about seven years when lawmakerspassed the Medicare prescription drug benefit and as a hedge against largercompanies phasing out retiree drug coverage, added a $665 subsidy per retireeto the plan as opposed to having them shuttled into Medicare and thereby savingthe government more than $1,000 per worker.
But the with the passage of health care reform,proponents (read Democrats) ended the subsidy prompting companies to beginwriting down the money that won't be coming in any longer.
Sarbanes-Oxley, if I'm not mistaken, requires companiesto publicly state material changes to their balance sheets as quickly aspossible or face possible criminal penalties.
Or perhaps Reps. Waxman and Stupak should peruse the20-year-old FASB Statement 106 found here:http://www.fasb.org/summary/stsum106.shtml, which will sort of explain a lotabout accounting for post retirement benefits.
Now to be fair, it certainly would be not out of therealm of possibility or tradition for some of the above-mentioned companies totake as large a write-down as legally possible. But that's fodder for a futurecolumn.
Make no mistake, the proposed April 21 hearings arelittle else than C-Span boilerplate and misdirection against someone actuallyunearthing the true costs of ObamaCare.
In fact, a consulting firm recently estimated there wouldbe roughly $14 billion in total writeoffs for businesses that offer retireedrug benefits.
And guess what? They gotta do that!
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