Legally required disclosure is now “BS”?
Caterpillar’s SEC Form 8K, which is disclosure required by law:
As a result of the Patient Protection and Affordable Care Act (H.R. 3590) signed into law on March 23, 2010 (the “Act”), beginning in 2011 the tax deduction available to Caterpillar Inc. (“Caterpillar”) will be reduced to the extent its drug expenses are reimbursed under the Medicare Part D retiree drug subsidy (RDS) program. Although this tax increase does not take effect until 2011, Caterpillar is required to recognize the full accounting impact in its financial statements in the period in which the Act is signed. As retiree healthcare liabilities and related tax impacts are already reflected in Caterpillar’s financial statements, the change will result in a charge to Caterpillar’s earnings in the first quarter of 2010 of approximately $100 million after tax.
The reaction to this required disclosure by a publicly traded company, which, if true, is even more alarming than usual from this crew:
“These are Republican CEOs who are trying to embarrass the President and Democrats in general,” says a White House legislative affairs staffer. “Where do you hear about this stuff? The Wall Street Journal editorial page and conservative websites. No one else picked up on this but you guys. It’s BS.”…
“Most of these people [in the Administration] have never had a real job in their lives. They don’t understand a thing about business, and that includes the President,” says a senior lobbyist for one of the companies that announced the charge. “My CEO sat with the President over lunch with two other CEOs, and each of them tried to explain to the President what this bill would do to our companies and the economy in general. First the President didn’t understand what they were talking about. Then he basically told my boss he was lying. Frankly my boss was embarrassed for him”…
Meanwhile, in a related letter from Henry Waxman to the CEO of AT&T, asking him to appear before congress on April 21: “The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern. They also appear to conflict with independent analyses. The Congressional Budget Office has reported that companies that insure more than 50 employees would see adecrease of up to 3% in average premium costs per person by 2016.” So this is what happens when fantasy and reality collide. Fantasy will eventually lose but this is just painful to watch.
March 31st, 2010 at 4:04 am
Appearing before Congress is a losing situation for these CEOs. They will be made out to be selfish and stupid and Waxman will continue to claim that they are partisans who are lying. Waxman might be smart enough to know what he’s doing, but there are more than a few White House people who believe they’re telling the truth because they really don’t understand basic accounting. Having moved from government to private business I have some familiarity with both and I would bet the businessmen know what they’re talking about and are telling the truth. I would not bet the same way in regards to the White House Counselors and Congresspeople who are trying to dominate the dialogue. To quote a friend of mine who has been watching this whole fiasco unfold, “we are seriously f*cked.” F
March 31st, 2010 at 5:36 am
Look at it another way. This is a golden opportunity to discuss the impact/intent of this new law. I agree with F in that the CEO’s will be used as political foils, but who does that really hurt? What if these CEOs ask questions of the committee? Will we see a third world kangaroo court? Is that acceptable?
This is the thin edge of the wedge. Stick it in…
March 31st, 2010 at 7:33 am
The CEOs have no choice but to follow the law regarding the filings. I’d just ask Waxman what part of HR3590 rescinds the requirement to report this on the form 8K. Perhaps that was another oversight.
April 1st, 2010 at 1:33 am
Weds. morning links…
Will Health Care Reform Finally Let Us Get That Divorce?
The vile Al Sharpton
The O plays the long game
The imperial history of the Middle East in 90 seconds
Skadden Arps has a good health care summary. h/t, Tiger
Via Dino:
“My CEO sat with …
April 1st, 2010 at 2:19 am
“So this is what happens when fantasy and reality collide. Fantasy will eventually lose but this is just painful to watch.”
Eventually could be a long time, and things can get pretty bad before before fantasy looses.
It is hard for honest, straight forward people to deal with the lies and spin that can be created by politicians.
Read “Atlas Shrugged” to get a sense of how far wrong all of this can go.
Anyday now I expect Waxman or Pelosi to introduce “Anti Dog Eat Dog Legislation”
April 1st, 2010 at 5:06 am
“Appearing before Congress is a losing situation for these CEOs.”
I constantly see that but I have yet to see a CEO with any courage at all. We need some old curmudgeon entirely unafraid and willing to use tough, even abrasive language. Has that ever happened?
Congress deserves respect and propriety, Waxman does not. Every answer should be prefaced with “Listen here, you idiot…”, “Every word in your question is false, and the implications you attempt to make by your question is a lie, now in response…” and so on.
April 2nd, 2010 at 2:36 am
Hey, Fred, I like your approach! That would be TV worth watching. Waxman would probably just bang his gavel though and call them out of order or hold them in contempt of congress. On second thought, congress is pretty contemptable to begin with.
April 3rd, 2010 at 2:38 am
Contempt for Congress is mandatory. They’ve earned it. They might want to ask Waxman if Rangel has paid his taxes yet. At least we can be sure Murtha isn’t taking any more bribes.