The Sarbanes-Oxley Act, a statist indulgence passed in the wake of the Enron financial accounting scandal, requires publicly-traded companies to make announcements whenever they rea- sonably expect “material adverse impacts” to affect future earnings.
In the weeks after President Obama signed health- care reform legislation into law, several large employers announced that the “reforms” (and, specifically, changes to the tax treatment of certain prescription drug benefits offered to employees) constitute “material adverse impacts” and will likely reduce projected profits. This was a black eye for ObamaCare.
But enter Henry Waxman, the braying buffoon who chairs the House Energy and Commerce Committee. The California Democrat saw conspiracy and no good at all in the companies’ reports. He dashed off a letter to three big employers — AT&T, Caterpillar, and Deere & Co. — ask- ing their senior management to come to Washington to explain their apostasy. His letter states, in part:
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 a decrease of up to 3% in average premium costs per person by 2016. The Business Roundtable, an association of chief executive officers from leading U.S. companies, asserted in November 2009 that health care reform could reduce predicted health insurance cost trends for businesses by more than $3,000 per employee over the next ten years. (Emphasis added.)
Of course, neither of the projections Waxman mentions has any bearing on what a specific company’s experience in the wake of the new law might be. There’s a touch of King Canute to this — with Waxman railing against the tide that it is not following CBO projections.