Four Horsemen are going to ride into Washington on April 21st to appear before a congressional committee at the behest of Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce. These Horseman go by four names: Righteousness, Conquest, Famine and Death. Or, in other words: Caterpillar, AT&T, John Deere, and Verizon.
Just what are they accused of? Basically, sharing with the public one of the major hidden costs of the Obama administration’s health care reform plan, now law, specifically the impact of the bill on the profitability of American businesses. It seems that they have announced a major hit to their bottom line because, as noted in a piece at InvestmentWatch, they “can no longer deduct from their taxes the subsidies paid by the federal government for retiree drug benefits.”
More simply stated: When the prescription drug benefit was passed, the Bush administration was concerned that major companies would encourage their retirees to move to Medicare to take advantage of the new benefit, thereby dramatically increasing the costs of Medicare. To significantly minimize this potential, the government provided these companies with subsidies to help cover the cost of retiree prescription drug plans. Since those subsidies were going directly to the retiree plans, they were tax exempt. In other words, these companies didn’t have to treat these subsidies as income. Well, under ObamaCare, these subsidies now have to be treated as additional income and are therefore taxed as such, resulting in billions in additional taxes.
It would appear that the Obama administration isn’t concerned with increasing costs to Medicare — not at all surprising, considering that Barack Obama’s ultimate goal is the eventual implementation of a national single-payer health care system.
Back to the point at hand. For companies with a large number of retirees, the loss of these subsidies will have a significant impact on profitability, which according to the Sarbanes-Oxley Act (Section 409) passed by Congress on July 25, 2002 must be reported to investors and potential investors (the public). For global companies, this is essentially the world.
According to the Act, companies are required “to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations,” disclosures which are to be presented in terms that are easy to understand. In other words, Section 409 clearly states that “material changes to their financial condition” are to be presented “on an urgent basis” and in “real time.”
With this kind of transparency, why is Rep. Waxman calling these Four Horsemen to appear before the committee? The administration’s problem is that this disclosure exposes the lie which is the root of so much of their health care-related rhetoric — that the new law is paid for and that it will not cost the taxpayers any money. In reality, though, when corporations receive a major hit to their bottom line, millions of stockholders (taxpayers) are affected, essentially receiving a hidden tax increase, and that increase trickles down to the public at large as the potential of higher prices needed to cover these additional expenses.
Just why Caterpillar, AT&T, John Deere, and Verizon were chosen to appear is a mystery. Many other companies have announced first quarter “writedowns” because of the passing of ObamaCare, including Boeing, AK Steel, 3M, and Valero Energy. There is no doubt that ObamaCare is causing a problem for these companies and, obviously, because of the demand to appear before Congress this is an unintended consequence to the bill. What other unintended consequences are in our future? What other “lies” about this bill will be discovered as the weeks and months and years pass?
Maybe I’m wrong, maybe these four companies don’t represent the Four Horsemen of the Apocalypse. Maybe, just maybe, they represent the Four Musketeers–Athos, Portos, Aramis, and d’Artagnan–riding to Washington to save the day, educate the elite in Congress (those that don’t know they don’t know, but think they know more than anyone else). We need the men who are representing these companies to ride to our defense, to carry our standard, to let Congress and American citizens know that we will no longer be treated as serfs whose ideas, beliefs, and commitments don’t matter. That we will no longer allow our laws and ideals to be trampled on and changed to meet the whims of those in power.
In addition, they have a legal and moral obligation to protect their investors. Those that have bowed down and kissed the ring of the Obama Administration have not fared too well. Look what happened to the stock and bondholders of General Motors and Chrysler, or just look at what’s happening to the banking industry … while the administration completely ignores the government’s role in the current financial crisis.
We can hope that these four won’t be cowed by the power of those in Congress, but instead will stand tall and speak truth to that power. There is precedent for this.
On August 6, 1947, Howard Hughes appeared before the Senate War Investigating Committee and essentially destroyed the reputation of the Republican senator from Maine, Owen Brewster. The senator had targeted Hughes as a favor to his friend and financial contributor, Juan Trippe, president of Pan-American Airways, a fierce competitor of Hughes-owned Trans World Airlines.
Hughes came prepared with the facts, not only the facts regarding his use of government funds during the war but also facts which shed light on how the rest of the industry fared and showed that his purported misuse of those funds was, in fact, not as significant as other airplane manufacturers that were not under investigation. He also didn’t hesitate to clearly state, for the record, Brewster’s relationship with Trippe and, his own opinion that the investigation had more to do with assuring Pan Am had exclusive rights to fly people and freight across the Atlantic than it did to Hughes’ “misuse” of government funds.
Do our current Musketeers have the courage to speak truth to power as Hughes did?
Well, Hughes was a fearless entrepreneur, a man with a vision who would not allow anything or anybody to stop that vision from becoming reality. When he appeared before Brewster’s committee he had the facts to support his views, and he wasn’t afraid to use those facts. He saw Congress for what it was: a group of men who were more interested in their agendas than in what was best for the American People. Here’s how the congressional hearing was portrayed in The Aviator, the 2004 film directed by Martin Scorsese and starring Leonardo DiCaprio as Hughes:
Well, how about our Four Musketeers? Do they have the courage to do the same? To be fair, the situation is somewhat different. None of these men are entrepreneurs, but instead are businessmen with a responsibility to their companies, investors, and the public at large. How they interpret this responsibility will make all the difference. Will they fear a public backlash should they challenge Congress? Will they fear a loss of government contracts should they speak the truth? Will they reconsider their positions, based on the Obama administration’s oft-demonstrated ability to circumvent current laws and governmental policies (as it did regarding the bankruptcies of GM and Chrysler)?
This is the first test of the viability of ObamaCare. These companies, through their own representatives, have the opportunity to show the American people that there are major problems with this bill, problems that will prove the truth of its unacceptability to the majority of American voters. One of two things will undoubtedly happen — either the CEOs will come out swinging and this will be the first challenge to the false promises of the Obama Administration regarding health care reform, or it will be another instance in which the righteous swallow their pride, bow, and kiss the ring of power.
What will transpire, nobody knows. But in case you want to support a choice of the path of righteousness, here is the contact information for the four companies’ executive offices:
- Caterpillar: 100 North East Adams Street, Peoria, Illinois USA 61629; (309) 675-1000
- AT&T: 208 S. Akard St. Dallas, Texas USA 75202; (210) 821-4105
- John Deere: One John Deere Place, Moline, Illinois 61265; (309) 765-8000
- Verizon: 140 West St. New York, NY 10007; (212) 395-1000
Horseman, or Musketeers — you make the call.