Working to create new jobs, only not in the private sector

Washington Examiner editorial on why Dems fear an honest accounting.

On Capitol Hill and in the White House on Monday, Democrats were fuming over a series of announcements that started Friday from Fortune 500 firms saying their bottom lines will take huge negative hits because of changes in tax law mandated by Obamacare. That hit in turn means lower profit projections. Caterpillar estimates, for example, that Obamacare will cost it $100 million; John Deere faces expenses of $150 million; 3M, $90 million; AK Steel, $31 million; Valero, $20 million. And then there's AT&T, which is marking its balance sheet down by a whopping $1 billion. All in all, the Wall Street Journal estimated a $14 billion haircut for these corporations.

The reason for the losses is the new accounting rule, according to this AP story.

Companies that provide prescription drug benefits for retirees have been getting subsidies covering 28 percent of eligible costs but could deduct everything they spent on the benefits — including the federal money — from their taxable income.

However, beginning in 2013, the health care overhaul will allow them to only deduct the amount of their own money that they spent. Prudential said it had taken a charge to reflect the increase in taxes it expects because of the changes.

So, rather than have government subsidize prescription drug benefits for retirees by giving tax reduction to employers who provide such coverage, ObamaCare will be the only provider. That means creating a whole bureaucracy with no cost ceiling (as all bureaucracies are) to provide the same thing at an expanded cost.

Think this will cost less?