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Obama-Care Reform Costs AT&T $1 Billion

From an unfazed Associated Press:

AT&T will take $1B non-cash charge for health care

By BARBARA ORTUTAY (AP)

March 26, 2010

NEW YORK — 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

AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.

White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.

Yes, anything that keeps the government from taking our money is now a “loophole” – or worse.

Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits — including the subsidies — from their taxable income.

The new law allows companies to only deduct the 72 percent they spent…

Also on Friday, Reps. Henry Waxman, D-Calif., and Bart Stupak, D-Mich., said they are asking the CEOs of Caterpillar, Verizon, Deere and others to testify at an April 21 House subcommittee hearing on claims that the health care law could hurt their ability to provide health insurance to workers

Notice that Congress is threatening anyone who squawks with show trials.

Just like their heroes used to do in the good old Soviet Union.

(Thanks to BillK for the heads up.)

This article was posted by Steve on Saturday, March 27th, 2010. Comments are currently closed.

9 Responses to “Obama-Care Reform Costs AT&T $1 Billion”

  1. BillK says:

    First it was Caterpillar taking a $100M charge.

    Next it was John Deere – $150M.

    Now AT&T is taking a whopping $1 billion charge thanks to Obamacare.

    I wonder how many thousands will thank Mr. Obama for being laid off.

    From Obama’s cheerleaders at the Associated Press:

    AT&T will take $1B non-cash charge for health care

    By Barbara Ortutay

    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.

    All five are smaller than AT&T, and their combined charges are less than half of the $1 billion that AT&T is planning. The $1 billion is a third of AT&T’s most recent quarterly earnings. In the fourth quarter of 2009, the company earned $3 billion on revenue of $30.9 billion.

    AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.
    White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.

    Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits _ including the subsidies _ from their taxable income.

    The new law allows companies to only deduct the 72 percent they spent.

    AT&T also said Friday that it is looking into changing the health care benefits it offers because of the new law.

    Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.

    http://host.madison.com/business/article_0187b2af-33cb-5b90-a10b-ba2b2ff6c026.html

    You think?

    Between these retirees, the increasing layoffs that will be required and of course the 300% premium increases coming next year, you can bet that “public option” will be on the table before you know it, along with the demonization of these companies just trying to contain the unreasonable costs Dear Leader has imposed.

    How dare they.

  2. Rusty Shackleford says:

    Liberals see this as good because it punishes big business. Yet, who will be the first(and the loudest) to squawk when their AT&T bill jumps 30…uh….make that 3000%?

  3. proreason says:

    This is just the first bite.

    Based on these early reports, the first years write-offs in total for American business will be ballpark $50 billion.

    Who do you think will pay for that?

    I guess if you were an idiot (i.e., a liberal) you would fantasize that the companies taking the write-offs will simply reduce their profits. But the cold hard facts are that to stay in business, these writeoffs will be passed on to the consumers. It may not be obvious, because they will hide it. But it ABSOLUTELY will happen.

    Adn, despite liberal fantasies, it won’t be progressive. This hidden tax will hit all consumers in about the same percentage. Actually, it is the reverse of progressive. Because rich people spend less of their income than poor people (who have no cushion).

    So, since GDP is about $14 trillion, $50 billion in writeoffs amounts to an increase in the price of everything you buy of about .35%. If you annually spend 50,000, then this will cost you $178.

    For starters.

    But that’s if the companies decide not to do layoffs.

    If they do layoffs, the impact will be a loss of about 650,000 jobs (at 50K + benefits per job).

    Hope

    Change

    Cramdown

    Power

    Arrogance

  4. GetBackJack says:

    I am going to ask these questions until it is Resolved –

    “When will our military act against these clearly defined Domestic Enemies?”
    “Where are our men and women in the officer ranks who take an oath to defend the Republic against enemies foreign and domestic?”
    “If you won’t act to remove this immediate and fatal threat from offices across the board, why?”
    “How far does it have to go before you act?”

    The American voter does not get to vote the Republic out, and communism in. When a Party maneuvers elections to make that possible, it is your Duty to stop it. That’s your Oath. The nature and constitution of a Republic negates a malformation into another form of political structure. Our military has the power and the RESPONSIBILITY to terminate threats to The Republic. Changing a polity from a republic to socialism and then communism are acts of clearly defined domestic enemies. This is an action of an enemy of the Republic. This is a an act of war.

    I’ve only spent an hour researching, but I cannot find a military dictionary definition of Domestic Enemy. Homeland Security is already labeling patriots domestic enemies, and I saw not one protest from our military … that is so chilling all of you should be asking these questions, too.

    Anyone got a legal definition that our military officers must obey? Not political civilians, but legal, Constitutional, Military Code definition.

    It must somewhere be defined. I haven’t found it. Yet.

    But when I do … I intend to hammer on that definition until our Military – which swore an oath to protect and defend the Constitution and the Republic – actually defends our nation.

    This kitty footing around is going to get us all killed. And is an afront to God and our Fore Fathers.

  5. canary says:

    Verizon sucks & has been big Obama supporters. Could the hearings with their whining, lead to deal cuts for them by Stupak & Waxman.

    And how did Verizon, Deere, & Caterpillar get such a quick date?

    • proreason says:

      Hannity had a guest on last night who has begun to appear a lot. He’s a Fox News business guy and he doesn’t pull his punches. Some of the stuff he spits out yanks Hannity up. Don’t know the guy’s name yet.

      But last night, he said that if these businesses are announcing this now, you can bet it is twice, at least, what they say. And in addition, the ones making the early announcements are probably in the tank for the fascists.

      By estimate of 50 B for this may be way low.

      But hey, Obamy and his pals are scraping by just fine, thankyewverymuch.

  6. GetBackJack says:

    I’m with Pro.

    This looks like preparing for trench warfare of the worst sort.

    (and to think, all that money could have been spent on innovations, advancing technology and improved infrastructure)

  7. tranquil.night says:

    This was just the Medicare “loophole” too. Take a guess at what the price tag would’ve looked like should there have been an across-the-board tax on employer provided coverage; which is certainly still alive and down the pike at some point when we’re in default.

    Wrangle and strangle, the Chicago Way. If a company is looking to get ahead of the curve now they should just start studying GM’s restructured business model, if there even is one.

  8. canary says:

    I’ve believed for some time, that Obama wants Verizon as the universal one wireless company, so he can switch them on or off. Verizon is such a deceitful dishonest rip their customers off. They are taught to lie.


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