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googlegoogle
03-26-2010, 07:20 PM
http://www.businessweek.com/news/2010-03-26/at-t-to-take-1-billion-charge-on-health-care-reform-update1-.html (http://www.pjstar.com/business/x1447158105/Cat-others-criticized-by-Obama-administration-for-cost-estimates)@pjstar.com (pgordon@pjstar.com)

AT&T to Book $1 Billion Cost on Health-Care Reform (Update3)

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(Adds health-care bill background in 12th paragraph.)
By Amy Thomson and Ian King
March 26 (Bloomberg) -- AT&T Inc. will book $1 billion in first-quarter costs related to the health-care law signed this week by President Barack Obama, the most of any U.S. company so far.
A change in the tax treatment of Medicare subsidies triggered the non-cash expense, and the company will consider changes to the benefits it offers current and retired workers, Dallas-based AT&T said today in a regulatory filing.
AT&T, the biggest U.S. phone company, joins Caterpillar Inc., AK Steel Holding Corp. and 3M Co. in recording non-cash expenses against earnings as a result of the law. Health-care costs may shave as much as $14 billion from U.S. corporate profits, according to an estimate by benefits consulting firm Towers Watson. AT&T employed about 281,000 people as of the end of January.
“Companies like AT&T, that have large employee bases, are going to have higher health-care costs and, therefore, lower earnings unless they can negotiate something or offer less to their employees,” said Chris Larsen, an analyst at Piper Jaffray & Co. in New York, who rates AT&T shares “overweight” and doesn’t own any himself.
AT&T previously received a tax-free benefit from the government to subsidize health-care costs for retirees, who would otherwise be on a Medicare Part D plan. Under the new bill, AT&T will no longer be able to deduct that subsidy.
“As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health-care benefits offered by the company,” the carrier said in the filing.
3M Cost
AT&T’s announcement was followed about an hour later by 3M, the St. Paul, Minnesota-based maker of products ranging from Post-It Notes to respiratory masks. 3M said it expects a one-time expense of $85 million to $90 million after tax, or about 12 cents a share, in the first quarter because of the new law, according to a statement. 3M had about 75,000 employees as of Feb. 5.
Michael Coe, a spokesman for the carrier, declined to comment. Peter Thonis, a spokesman for Verizon Communications Inc., which also employs more than 200,000 people, declined to comment.
New York-based Verizon, the second-largest U.S. phone company, told employees in a note after the law was signed that the tax will make the subsidy less valuable to employers like Verizon and so “may have significant implications for both retirees and employers.”
AT&T rose 9 cents to $26.24 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 6.4 percent this year.
Union Contracts
AT&T employees represented by the Communications Workers of America union have health benefits locked in via contracts that don’t expire until 2012 and 2013, Candice Johnson, a spokeswoman for the union, said in an interview. About 58 percent of the carrier’s workforce is represented by the union, AT&T said in a filing.
Obama signed the health-care reform policy into law on March 23 after a year of pushing the legislation through Congress without a single Republican vote. The new law will be phased in over several years and gives tens of millions of uninsured Americans health coverage. The bill, projected to cost almost $1 trillion, also calls for new taxes on the highest earners and fees on health-care companies.
Much of the public is still unsure about the plan with four in 10 Americans in favor of it, according to a Bloomberg National Poll. Obama is planning a follow-up campaign to sell the law -- the biggest change to the health system since Medicare was enacted in 1965 -- to the public.
--With reporting by Roger Runningen in Washington and Alex Nussbaum in New York. Editors: Lisa Wolfson, Stephen West
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net; Amy Thomson in New York at athomson6@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net; Julie Alnwick at jalnwick@bloomberg.net

CoMoChief
03-26-2010, 07:42 PM
Shhh, these are just talking points. Liberals don't like to talk about reality.

memyselfI
03-26-2010, 08:36 PM
It's only the beginning...

Bwana
03-26-2010, 09:37 PM
I woundn't be surpried is Cat moved across the border. Bye Bye MORE jobs.

mlyonsd
03-26-2010, 09:41 PM
Its ok. These guys are big corporations, and as such, they suck. /liberals

btlook1
03-26-2010, 10:23 PM
I woundn't be surpried is Cat moved across the border. Bye Bye MORE jobs.

Kind of a no brainer on there part...to move to Mexico. That's a lot of jobs gone....thanks obama!

BillSelfsTrophycase
03-26-2010, 10:25 PM
Libs?


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ChiefaRoo
03-26-2010, 11:46 PM
Hey screw AT&T. I hate big corporations because they're all corporationey and they make money and stuff. I don't need text messaging or smart phones to vote for my favorite Idol contestant I'll just.... oh wait...


Sincerely,

Uninformed America.

Brainiac
03-27-2010, 12:39 AM
I guess it's not surprising that Big Red Chief, Mr. Kotter and Orange have NOTHING to say about this.

Liberals always think you can make things magically appear just by passing a law. Their failure to grasp basic economics and human motivation is surpassed only by their lack of understanding of what made this country great in the first place.

orange
03-27-2010, 03:36 AM
I guess it's not surprising that Big Red Chief, Mr. Kotter and Orange have NOTHING to say about this.


I've got plenty to say about this. Don't speak for me, asswipe! I don't live at your beck and call.


As for AT&T - screw them. Why the hell should they get a free ride on OUR BACKS?

I'm guessing you folks don't know what this cost they're booking actually is.

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.
http://www.startribune.com/business/89280147.html

DAMNATION! Only being able to deduct the money you ACTUALLY spent! How's a poor trillion dollar corporation going to get by?!

Hypocrites who've posted about the evils of gov't. subsidies line up below.

bevischief
03-27-2010, 03:53 AM
I've got plenty to say about this. Don't speak for me, asswipe! I don't live at your beck and call.


As for AT&T - screw them. Why the hell should they get a free ride on OUR BACKS?

I'm guessing you folks don't know what this cost they're booking actually is.

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.
http://www.startribune.com/business/89280147.html

DAMNATION! Only being able to deduct the money you ACTUALLY spent! How's a poor trillion dollar corporation going to get by?!

Hypocrites who've posted about the evils of gov't. subsidies line up below.

But the difference will be made by the employees and the consumer...

orange
03-27-2010, 04:26 AM
You know, googlegoogle, those numbers didn't make any sense to me so I did what no one else here ever does - I clicked your link. It reroutes to: http://www.pjstar.com/business/x1447158105/Cat-others-criticized-by-Obama-administration-for-cost-estimates . Funny but the whole story is completely different now.


By PAUL GORDON (pgordon@pjstar.com)
Journal Star
Posted Mar 26, 2010 @ 04:23 PM
Last update Mar 26, 2010 @ 09:35 PM


PEORIA — Caterpillar Inc. and other large companies are being criticized by the Obama administration for reporting now that they will take millions of dollars in hits to their earnings because of one portion of the new health care legislation.

Caterpillar and Deere were accused of being “premature and irresponsible” by U.S. Secretary of Commerce Gary Locke for saying a change to Medicare Part D laws would hurt their earnings in the present quarter.

Those companies are also being questioned about the amounts they are claiming — amounts that seem to get larger with every company that makes a report to the U.S. Securities and Exchange Commission about taking a one-time charge as a result of the legislation.

Caterpillar started it all by saying it would take a $100 million hit on its first quarter earnings. Deere & Co. followed with a report it would lose $150 million to its fiscal second quarter earnings.

The largest estimated hit yet, $1 billion, was announced Friday by AT&T.

At issue is what kind of hit corporate America will take because it is losing a tax deduction from Medicare Part D. Before, companies were paid subsidies of $1,330 a year, tax-free, for every retiree for whom it provided a prescription drug plan. Then, that amount could be deducted from the company’s taxes.

The new law still provides the subsidy tax free, but companies will no longer be able to deduct it from taxes.

Also on Friday the Wall Street Journal said in a published report that it calculates Caterpillar’s loss would be more like $7 million, based on the fact Caterpillar told the SEC it expected to receive about $20 million annually from the tax deduction and the 35 percent corporate tax rate that would now be applied to that deduction amount.

But Caterpillar on Friday defended itself, reiterating its belief it must, under accepted accounting rules and regulations, record any one-time tax charge in the quarter in which the legislation causing that charge is signed.

The $100 million, said Caterpillar spokesman Jim Dugan, “is our calculation of what that change in Medicare Part D will mean to the company.”

Dugan was pressed for further explanation of how the calculation was made, including whether the $100 million was an estimate of what the change will cost Caterpillar in perpetuity since it can only be charged once.

He said further details will be included in Caterpillar’s first quarter earnings report, which will be released April 26.

On the time of the filing, Dugan said, “We felt it was very appropriate and prudent to file the disclosure with the SEC immediately. We tend to take a conservative approach to SEC filings.”

Dugan declined to comment on the statement of Commerce Secretary Locke, which he made in a live interview Thursday on CNBC.

He also declined to say anything more about a telephone call made Thursday from the White House to Vice Chairman Doug Oberhelman, which Oberhelman revealed while speaking to the Morton Rotary Club later on Thursday.

While he acknowledged the call was regarding the health care legislation, Oberhelman would not say from it it came or what was said. He did describe the call as “productive.”

Paul Gordon can be reached at 686-3288 or pgordon@pjstar.com


Copyright 2010 pjstar.com. Some rights reserved

orange
03-27-2010, 04:28 AM
To reiterate:

Caterpillar started it all by saying it would take a $100 million hit on its first quarter earnings.

Wall Street Journal said in a published report that it calculates Caterpillar’s loss would be more like $7 million.


Quite a spread, there. SOMEONE'S lying.


... And if they're taking that deduction in perpetuity, then they better not be cutting those benefits in the future. Right?

'Hamas' Jenkins
03-27-2010, 04:38 AM
To reiterate:

Caterpillar started it all by saying it would take a $100 million hit on its first quarter earnings.

Wall Street Journal said in a published report that it calculates Caterpillar’s loss would be more like $7 million.


Quite a spread, there. SOMEONE'S lying.


... And if they're taking that deduction in perpetuity, then they better not be cutting those benefits in the future. Right?

killshot.

bevischief
03-27-2010, 04:42 AM
killshot.

this.

Brainiac
03-27-2010, 09:09 AM
I've got plenty to say about this. Don't speak for me, asswipe! I don't live at your beck and call.


As for AT&T - screw them. Why the hell should they get a free ride on OUR BACKS?

I'm guessing you folks don't know what this cost they're booking actually is.

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.
http://www.startribune.com/business/89280147.html

DAMNATION! Only being able to deduct the money you ACTUALLY spent! How's a poor trillion dollar corporation going to get by?!

Hypocrites who've posted about the evils of gov't. subsidies line up below.

The fact that you begin your post stating your desire to screw AT&T and you end your post with a sarcastic comment about a "poor trillion dollar corporation" tells us all we need to know about your mindset and motivation.

You're for the "little guy". I get that. There's nothing wrong with looking out for the little guy. But the interests of the "little guy" and everybody else are best served by a growing economy with (dare I say it) big, profitable corporations. When you declare war on big corporations you might as well be shooting yourself in the foot. THAT'S what liberals fail to understand, and that's what this bill does. We've been trying to tell the liberals that the numbers on this thing just don't add up and that it will SERIOUSLY impact the economy, and the liberals don't want to hear it. And now that companies are speaking out and estimating the impact of this idiotic legislation, you guys are in denial and insist that they MUST be lying.

HonestChieffan
03-27-2010, 09:19 AM
The fact that you begin your post stating your desire to screw AT&T and you end your post with a sarcastic comment about a "poor trillion dollar corporation" tells us all we need to know about your mindset and motivation.

You're for the "little guy". I get that. There's nothing wrong with looking out for the little guy. But the interests of the "little guy" and everybody else are best served by a growing economy with (dare I say it) big, profitable corporations. When you declare war on big corporations you might as well be shooting yourself in the foot. THAT'S what liberals fail to understand.

Thats reality. Reality has little impact on the far left until they are the ones unemployed or in the case of college kids they graduate only to find out there are no jobs.

One thing happening on many discussion boards is that while the parry and thrust of right vs left back in the fall was pretty heated, it was all based on each sides theory and what they believed in. But since then this real world thing has hit and a lot of the Obama voters who were independents who bought the hope/change thing and a good number of young folks have started to see what they were being told.

Its easy to demonize corporations till you need a job or lose one. And its easy to throw stones at each other on proposals till they pass and the reality of the consequences begin to show up.

We are at a very dangerous tipping point in this economy and the moves of the administration are clearly seen by a large majority as wrong. As they push through more and ignore the voter further, we should expect a lot of heat to be generated.

ROYC75
03-27-2010, 09:35 AM
Shhh, there will be no new taxes of any form on the middle class. They will not suffer one bit.

Duck Dog
03-27-2010, 09:38 AM
Wow, now he's going after the unions that helped get him elected. This administration will stop at nothing to break this country and force into a socialist, government dependent nation of fools.

Iowanian
03-27-2010, 08:27 PM
John Deere Corp announced they anticipated a $100mil hit also.

Hog Farmer
03-27-2010, 08:30 PM
All this means is the cost is going to be passed on to the consumer eventually. Hell , I can't understand my telephone bill as it is so another sur charge won't really be noticed.

banyon
03-27-2010, 08:36 PM
:hmmm:

banyon
03-27-2010, 08:38 PM
:hmmm::hmmm:

banyon
03-27-2010, 08:39 PM
:hmmm::hmmm::hmmm:

banyon
03-27-2010, 08:41 PM
Toyota and Honda have beat the pants off of GM & Ford and one of the main reasons they have lower costs is because of their public healthcare system.

Iowanian
03-27-2010, 08:45 PM
Toyota and Honda have beat the pants off of GM & Ford and one of the main reasons they have lower costs is because of their NON UNION PLANT system.

fyp

orange
03-27-2010, 08:47 PM
They'll get a chance to explain exactly where the money's going in three weeks.

AT&T, Deere CEOs Called by Waxman to Back Up Health-Bill Costs
March 27, 2010, 7:28 PM EDT

By Viola Gienger

March 27 (Bloomberg) -- Representative Henry Waxman called the chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. to provide evidence to support costs the companies plan to book related to the new health-care law.

Waxman of California, chairman of the House Energy and Commerce Committee, and subcommittee Chairman Bart Stupak of Michigan released letters they wrote to the executives, saying their plans to record expenses against earnings as a result of the law contradict other estimates. The lawmakers requested the executives appear at hearing Stupak plans on April 21.

“The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern,” Waxman and Stupak, both Democrats, wrote in the letters yesterday. “They also appear to conflict with independent analyses.”

AT&T, the biggest U.S. phone company, is among employers that have announced plans to book costs related to the health- care law signed this week by President Barack Obama. The 10- year, $940-billion legislation is intended to cover 32 million uninsured Americans and provide benefits such as restricting premiums and ending the practice of denying coverage for pre- existing conditions.

Dallas-based AT&T said in a regulatory filing yesterday it would record $1 billion of costs, the most of any U.S. company so far.

AT&T previously received a tax-free benefit from the government to subsidize health-care costs for retirees. Under the new bill, AT&T will no longer be able to deduct that subsidy.

Tax Burden

“As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health-care benefits offered by the company,” the carrier said in the filing.

New York-based Verizon, the second-largest U.S. phone company, told employees in a note shortly after the law was signed that the tax will make a drug subsidy less valuable to employers like Verizon and so “may have significant implications for both retirees and employers.”

Moline, Illinois-based Deere, the world’s largest maker of farm machinery, said on March 25 that the new health-care law would increase its expenses by $150 million this fiscal year.

Peoria, Illinois-based Caterpillar, the world’s largest maker of bulldozers and excavators, expects to record a charge of about $100 million in the first quarter of 2010, reflecting new tax liabilities on retiree drug benefits.

No Charge at GE

General Electric Co., the world’s biggest maker of jet engines, power-plant turbines and locomotives, said today it doesn’t anticipate taking a charge tied to the health-care law.

GE, of Fairfield, Connecticut, doesn’t see any “material effect” from the law, spokeswoman Anne Eisele said today.

Waxman and Stupak said the Congressional Budget Office had reported that average premium costs per person would decrease as much as 3 percent by 2016 for companies insuring more than 50 employees. They also cited what they said was a November estimate by the Business Roundtable, an association of chief executive officers, of reduced health-insurance cost trends.

The lawmakers asked the companies to provide documents to the committee supporting their planned charges by April 9.

--With assistance from Amy Thomson and Will Daley in New York, Rachel Layne and Edmond Lococo in Boston and Ian King in San Francisco. Editors: Ann Hughey, Mark Rohner

To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net.

To contact the editor responsible for this story: James Kirk in Washington at jkirk12@bloomberg.net.

http://www.businessweek.com/news/2010-03-27/at-t-deere-ceos-called-by-waxman-to-back-up-health-bill-costs.html

I wonder what GE knows that the rest of them don't.

banyon
03-27-2010, 08:51 PM
fyp

I didn't make that up:

http://www.autoweek.com/article/20050401/FREE/504010702

Japan's health care gives Toyota edge; country picks up tab for automaker's retirees


By JAMES B. TREECE | AUTOMOTIVE NEWS
Imagine how much stronger General Motors would be if it launched three additional new-model programs every year, each costing about $1 billion.

It could, if it didn't have to pay for its retirees' health care.

That is one of the most fundamental differences between GM and Toyota Motor Corp. GM pays for the health care of 339,000 retirees - and the number grows every year. In contrast, Toyota pays for fewer than 3,000 retirees' health care in Japan, a number that remains fairly stable.


That difference gives Toyota and other Japanese carmakers a massive advantage over their American rivals.

"The cost of health care in the U.S. is making American businesses extremely uncompetitive vs. our global counterparts," says GM CEO Rick Wagoner.

Toyota and other Japanese carmakers benefit from a national health care plan that reduces its obligations to retirees to almost nothing.

Wagoner and other U.S. auto industry executives are increasingly vocal in seeking government action to address this competitive disadvantage. But Wagoner stops short of seeking a national solution as comprehensive as Japan's.

Day and night

A close look at the numbers at GM and Toyota shows diametrically different conditions.

About 1,200 of Toyota's Japanese employees will retire this year. Within two years, each will switch from the company-backed health insurance scheme to the national health plan. At that point, Toyota's spending on its retiree's health care drops to zero.

Toyota pays health care costs for its employees in Japan in the form of premiums for medical insurance. But it does not continue to pay those costs for retirees. Former employees of Nissan Motor Co. and Honda Motor Co. also turn to the Japanese government for health care coverage.

The American Big 3 pay - and pay and pay - for their retirees' health care.

GM covers the health care costs of approximately 125,000 active employees and 339,000 retirees. Health care costs for those retirees amounted to approximately $3.6 billion last year.

That's more than two-thirds of the $5.2 billion GM spent on health care and medical-insurance premiums last year. GM also contributed about $9 billion in 2004 to a trust fund set up to pay for health care costs.

In 2004, Ford Motor Co. spent $2.0 billion on health care for U.S. retirees.

The Chrysler group last year spent $1.3 billion on retirees' health care.

$1,525 per vehicle

GM says that its payments for retirees' health care - more than what the company spent for steel - add about $1,525 to the cost of every vehicle the company sells.

In contrast, Toyota must contribute to health insurance payments for only about 64,500 active workers in Japan.

Toyota's health care costs are so negligible that they aren't even a line item in the company's financial statements. Toyota benefits both from the Japanese national health plan's coverage of retirees' medical needs and from the way that plan is structured.

Health care is paid for through a combination of mandatory payroll deductions from employees and employers. The cost is spread equally among various employers. That means older companies with large numbers of retirees are not at a disadvantage compared to companies with fewer retirees.

GM argues that it pays for more than its own employees and retirees. Indirectly, it pays for the approximately 45 million Americans who do not have health insurance. That's because medical providers charge higher fees to those who are covered by insurance to compensate for those who are not covered.

Toyota does not pay extra taxes to fund the government health care plan. Corporate income tax rates in Japan and the United States are virtually identical at just below 42 percent.

Perhaps sensitive to comparisons, Toyota declined to say whether its total health care spending in Japan amounted to more or less than $10 million a year.

The difference represents a huge competitive disadvantage for GM. Money that must be spent on retirees' health care cannot be spent on developing new models, upgrading factory equipment or hiring the most sought-after designers.

"The impact of the health care burden is particularly frustrating, because over the past decade GM has made huge improvements in our operational competitiveness," Wagoner says. "We have some of the most productive plants in North America, including four of the top five, and our quality has improved dramatically."

Wagoner's plan

Wagoner stops short of calling for a national health plan.

He wants industry, government and labor to cooperate to find ways to hold down spiraling costs.

"We need to encourage access to affordable health care coverage for all our citizens," he says. GM then wouldn't have to pay indirectly for the uninsured.

He also wants to address so-called catastrophic health care costs, which account for 30 percent of all medical costs. He calls for a "comprehensive insurance model to better share these catastrophic costs among all consumers."

Most of all, he wants Americans to be smarter consumers of health care, choosing less expensive yet comparable medicines whenever possible. But that's unlikely, as long as Americans believe that someone else, whether an insurance company or the government, is picking up the tab.

There is no evidence that Japanese consumers are any savvier in their health care spending than Americans. But in Japan, it's the government picking up the tab for retirees. In America, GM retirees pass the bill to GM.

googlegoogle
03-27-2010, 09:18 PM
Explain why the foreign owned plants in Tennessee are kicking Detroit's ass.

petegz28
03-27-2010, 10:14 PM
They'll get a chance to explain exactly where the money's going in three weeks.

AT&T, Deere CEOs Called by Waxman to Back Up Health-Bill Costs
March 27, 2010, 7:28 PM EDT

By Viola Gienger

March 27 (Bloomberg) --
Waxman and Stupak said the Congressional Budget Office had reported that average premium costs per person would decrease as much as 3 percent by 2016 for companies insuring more than 50 employees. They also cited what they said was a November estimate by the Business Roundtable, an association of chief executive officers, of reduced health-insurance cost trends.

The lawmakers asked the companies to provide documents to the committee supporting their planned charges by April 9.

--With assistance from Amy Thomson and Will Daley in New York, Rachel Layne and Edmond Lococo in Boston and Ian King in San Francisco. Editors: Ann Hughey, Mark Rohner

To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net.

To contact the editor responsible for this story: James Kirk in Washington at jkirk12@bloomberg.net.

http://www.businessweek.com/news/2010-03-27/at-t-deere-ceos-called-by-waxman-to-back-up-health-bill-costs.html

I wonder what GE knows that the rest of them don't.

So, now we are back to rates going down? Which is it, Orange??

A) Rates go down
B) Rates go up but not as fast?


You guys are all over the ****ing place.

orange
03-27-2010, 10:56 PM
So, now we are back to rates going down? Which is it, Orange??

A) Rates go down
B) Rates go up but not as fast?


You guys are all over the ****ing place.

The answer is right there... where you conveniently stopped your boldface.

Waxman and Stupak said the Congressional Budget Office had reported that average premium costs per person would decrease as much as 3 percent by 2016 for companies insuring more than 50 employees. They also cited what they said was a November estimate by the Business Roundtable, an association of chief executive officers, of reduced health-insurance cost trends.

Two different studies.

If you actually want to learn something, read here: http://www.politifact.com/truth-o-meter/statements/2010/mar/19/barack-obama/obama-says-health-reform-legislation-could-reduce-/

But don't expect me to hold your hand and try to walk you through it.

If you just want to skip to the conclusion, it's this:

First, none of the forecasts suggests premiums will be going down. Rather, the Hewitt report talks about premiums going up dramatically over the next decade, just not as much as if proper reforms are instituted.

And the report is talking about long-term effects. The CBO doesn't think people getting insurance through an employer will see much change in premiums either way by 2016.

banyon
03-27-2010, 11:10 PM
Explain why the foreign owned plants in Tennessee are kicking Detroit's ass.

Their workers haven't reached retirement age in significant numbers, is my understanding.

Taco John
03-27-2010, 11:14 PM
Toyota and Honda have beat the pants off of GM & Ford and one of the main reasons they have lower costs is because of their public healthcare system.

...and one of the reasons that they can afford a healthcare system is because we subsidize their national security.

banyon
03-27-2010, 11:19 PM
...and one of the reasons that they can afford a healthcare system is because we subsidize their national security.

There are other companies doing just as well, where that rationale doesn't affect it. viz., Hyundai, Tata, BYD, etc.

patteeu
03-28-2010, 09:09 AM
I've got plenty to say about this. Don't speak for me, asswipe! I don't live at your beck and call.


As for AT&T - screw them. Why the hell should they get a free ride on OUR BACKS?

I'm guessing you folks don't know what this cost they're booking actually is.

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.
http://www.startribune.com/business/89280147.html

DAMNATION! Only being able to deduct the money you ACTUALLY spent! How's a poor trillion dollar corporation going to get by?!

Hypocrites who've posted about the evils of gov't. subsidies line up below.

This "subsidy" like so many other tax incentives in our overly complex tax system was created for a laudable reason. Mark Steyn (http://article.nationalreview.com/429537/obamacare-dystopia/mark-steyn) explains:

In 2003, Washington blessed a grateful citizenry with the Medicare prescription-drug benefit, it being generally agreed by all the experts that it was unfair to force seniors to choose between their monthly trip to Rite-Aid and Tony Danza in dinner theater. However, in order to discourage American businesses from immediately dumping all their drug plans for retirees, Congress gave them a modest tax break equivalent to 28 percent of the cost of the plan.

Getting rid of that tax break will presumably have the effect that it was created to avoid. The same effect that critics of Obama's reform have been warning about. Private plans disappear and people get dumped into the government system. So much for the Obama promise that people would be able to keep the plans they have if they want to.

This isn't about hypocrites speaking out of two sides of their mouths about subsidies, it's about how people who warn about the negative unintended consequences of government action are usually proved right in time. Bush's prescription drug program was bad enough as it was originally envisioned. Quickly though, the costs escalated way beyond the projections. And right on the heels of these unexpected costs come the reformers who eliminate the cost containment strategy of the doughnut hole and the tax disincentives that were designed to prevent business from dumping privately insured people into the medicare system.

So what is the financial impact of this tax increase? As usual, the morons in Washington aren't even getting us a good financial deal. More Steyn:

Ask yourself this: If you impose a sudden 35 percent tax on something, are you likely to get as much of it? Go on, take a wild guess. On the day President Obama signed Obamacare into law, Verizon sent an e-mail to all its employees warning that the company’s costs “will increase in the short term.” And in the medium term? Well, U.S. corporations that are able to do so will get out of their prescription-drug plans and toss their retirees onto the Medicare pile. So far just three companies — Deere, Caterpillar, and Valero Energy — have calculated that the loss of the deduction will add a combined $265 million to their costs. There are an additional 3,500 businesses presently claiming the break. The cost to taxpayers of that 28 percent benefit is about $665 per person. The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person. So we’re roughly doubling the cost of covering an estimated 5 million retirees.

patteeu
03-28-2010, 09:14 AM
To reiterate:

Caterpillar started it all by saying it would take a $100 million hit on its first quarter earnings.

Wall Street Journal said in a published report that it calculates Caterpillar’s loss would be more like $7 million.


Quite a spread, there. SOMEONE'S lying.


... And if they're taking that deduction in perpetuity, then they better not be cutting those benefits in the future. Right?

It's not lying, it's accounting. And nothing prevents them from dropping the plan just because they took a legal tax loss in the upcoming quarter, they'll just have to account for it.

patteeu
03-28-2010, 09:14 AM
killshot.

Haha. Not really.

Brainiac
03-28-2010, 09:38 AM
They'll get a chance to explain exactly where the money's going in three weeks.

AT&T, Deere CEOs Called by Waxman to Back Up Health-Bill Costs
March 27, 2010, 7:28 PM EDT

By Viola Gienger

March 27 (Bloomberg) -- Representative Henry Waxman called the chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. to provide evidence to support costs the companies plan to book related to the new health-care law.

Waxman of California, chairman of the House Energy and Commerce Committee, and subcommittee Chairman Bart Stupak of Michigan released letters they wrote to the executives, saying their plans to record expenses against earnings as a result of the law contradict other estimates. The lawmakers requested the executives appear at hearing Stupak plans on April 21.

“The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern,” Waxman and Stupak, both Democrats, wrote in the letters yesterday. “They also appear to conflict with independent analyses.”

AT&T, the biggest U.S. phone company, is among employers that have announced plans to book costs related to the health- care law signed this week by President Barack Obama. The 10- year, $940-billion legislation is intended to cover 32 million uninsured Americans and provide benefits such as restricting premiums and ending the practice of denying coverage for pre- existing conditions.

Dallas-based AT&T said in a regulatory filing yesterday it would record $1 billion of costs, the most of any U.S. company so far.

AT&T previously received a tax-free benefit from the government to subsidize health-care costs for retirees. Under the new bill, AT&T will no longer be able to deduct that subsidy.

Tax Burden

“As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health-care benefits offered by the company,” the carrier said in the filing.

New York-based Verizon, the second-largest U.S. phone company, told employees in a note shortly after the law was signed that the tax will make a drug subsidy less valuable to employers like Verizon and so “may have significant implications for both retirees and employers.”

Moline, Illinois-based Deere, the world’s largest maker of farm machinery, said on March 25 that the new health-care law would increase its expenses by $150 million this fiscal year.

Peoria, Illinois-based Caterpillar, the world’s largest maker of bulldozers and excavators, expects to record a charge of about $100 million in the first quarter of 2010, reflecting new tax liabilities on retiree drug benefits.

No Charge at GE

General Electric Co., the world’s biggest maker of jet engines, power-plant turbines and locomotives, said today it doesn’t anticipate taking a charge tied to the health-care law.

GE, of Fairfield, Connecticut, doesn’t see any “material effect” from the law, spokeswoman Anne Eisele said today.

Waxman and Stupak said the Congressional Budget Office had reported that average premium costs per person would decrease as much as 3 percent by 2016 for companies insuring more than 50 employees. They also cited what they said was a November estimate by the Business Roundtable, an association of chief executive officers, of reduced health-insurance cost trends.

The lawmakers asked the companies to provide documents to the committee supporting their planned charges by April 9.

--With assistance from Amy Thomson and Will Daley in New York, Rachel Layne and Edmond Lococo in Boston and Ian King in San Francisco. Editors: Ann Hughey, Mark Rohner

To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net.

To contact the editor responsible for this story: James Kirk in Washington at jkirk12@bloomberg.net.

http://www.businessweek.com/news/2010-03-27/at-t-deere-ceos-called-by-waxman-to-back-up-health-bill-costs.html

I wonder what GE knows that the rest of them don't.
There's a real shocker for you: two Democrats say they don't believe what the companies are saying about their own businesses.

banyon
03-28-2010, 12:27 PM
So, I never got a reply to why these stocks have surged with this enormous burden?

Are the investors stupid?

petegz28
03-28-2010, 04:32 PM
The answer is right there... where you conveniently stopped your boldface.

Waxman and Stupak said the Congressional Budget Office had reported that average premium costs per person would decrease as much as 3 percent by 2016 for companies insuring more than 50 employees. They also cited what they said was a November estimate by the Business Roundtable, an association of chief executive officers, of reduced health-insurance cost trends.

Two different studies.

If you actually want to learn something, read here: http://www.politifact.com/truth-o-meter/statements/2010/mar/19/barack-obama/obama-says-health-reform-legislation-could-reduce-/

But don't expect me to hold your hand and try to walk you through it.


It's pretty simple, if rates go up, even if at a slower pace, they still cannot go down 3%.
If you just want to skip to the conclusion, it's this:

First, none of the forecasts suggests premiums will be going down. Rather, the Hewitt report talks about premiums going up dramatically over the next decade, just not as much as if proper reforms are instituted.

And the report is talking about long-term effects. The CBO doesn't think people getting insurance through an employer will see much change in premiums either way by 2016.

Just like I said, all over the place. Rates will go down, but not really. They will go up, but not as much. But somehow the latter equals a rate decrease of 3%. I hope you're not a math teacher.

petegz28
03-28-2010, 04:34 PM
There's a real shocker for you: two Democrats say they don't believe what the companies are saying about their own businesses.

They know better than the businesses do.

BigRedChief
03-28-2010, 05:05 PM
They know better than the businesses do.yeah WTF? After all Fortune 500 companies always tell the American people the whole truth about their business.

petegz28
03-28-2010, 05:16 PM
yeah WTF? After all Fortune 500 companies always tell the American people the whole truth about their business.

If they are publicly traded companies they are more honest than the Fed Gov is, has too, or will ever be.

BigRedChief
03-28-2010, 05:38 PM
If they are publicly traded companies they are more honest than the Fed Gov is, has too, or will ever be.So now the standard for truth is the government?ROFL

petegz28
03-28-2010, 05:51 PM
So now the standard for truth is the government?ROFL

Well, BRC, when they are the ones that are taking over the insurance companies, banks, mortgage industry and automakers who else are you going to compare too??

BigRedChief
03-28-2010, 05:54 PM
Well, BRC, when they are the ones that are taking over the insurance companies, banks, mortgage industry and automakers who else are you going to compare too??Neither of those type of organizations have earned trust. "Trusting" a damn thing they put out as fact without some fact checking is a folly that too many stumble into.

petegz28
03-28-2010, 05:57 PM
Neither of those type of organizations have earned trust. "Trusting" a damn thing they put out as fact without some fact checking is a folly that too many stumble into.

Nice dodge....

Brock
03-30-2010, 03:15 PM
The gigantic company I work for just sent out a company wide email telling us that health care costs for certain employee groups are "being reevaluated". I wonder what they mean by that. (not really)

HonestChieffan
03-30-2010, 03:21 PM
Prudential announced the hit they will take. That will cut dividends to fixed income older people. Such a nice thing.

Iowanian
03-30-2010, 03:37 PM
The gigantic company I work for just sent out a company wide email telling us that health care costs for certain employee groups are "being reevaluated". I wonder what they mean by that. (not really)


I'm pretty sure it means you're going to double your benefits for half of the cost.

I hope you can spend the rebate on a nice family trip to a desirable destination.

Brainiac
04-17-2010, 10:36 AM
So now that Waxman has canceled his witch hunt, where are Orange and BRC and all of the other liberals who were convinced that these companies were lying?

http://upload.wikimedia.org/wikipedia/commons/archive/a/a9/20070505104053!Censourship_quiet_silence_no_words.jpg

orange
04-17-2010, 11:00 AM
So now that Waxman has canceled his witch hunt, where are Orange and BRC and all of the other liberals who were convinced that these companies were lying?




WALL STREET JOURNAL LAUGHS AT EMPTYBRAINIAC

Companies Take Health-Care Charges


Deere Joins Caterpillar, AK Steel in Toting Up Costs of Overhaul; White House Disputes Accounting Article

By Kris Maher, Ellen E. Schultz and Bob Tita

In the wake of Washington’s health-care overhaul, some companies are taking big one-time charges for anticipated costs, fanning tension with the administration over the legislation’s impact on corporate America.

Three companies that were among vocal opponents of the legislation have warned they would see an immediate impact on their earnings as a result of the loss of deductions on tax-free subsidies they receive for providing retiree prescription-drug benefits.

On Thursday, Deere & Co. said it would take a $150 million one-time charge in the current quarter related to the loss of deductions. Earlier in the week, Caterpillar Inc. reported a $100 million charge and AK Steel recorded a $31 million charge.

Beginning in 2006, companies have received a 28% federal subsidy, up to $1,330 per retiree, tax-free, to help pay for prescription-drug coverage. Until now, companies could deduct the subsidy from their taxes, essentially getting a second benefit from the money. Under the new law, companies will no longer be able to deduct the subsidy, but it remains tax-free.

Although the changes don’t go into effect until 2013, companies say they have to take the charge to earnings now, to reflect the loss of the future tax deductions. In all, the S&P 500 companies will take a combined hit of $4.5 billion to first-quarter earnings, estimates David Zion, an analyst with Credit Suisse.

Administration officials say companies are exaggerating the impact of the loss of the deduction because of their general unhappiness with health reform.

“During the past year, I have heard from CEOs from across the country that skyrocketing premiums are crippling the competitiveness of their companies,” said Commerce Secretary Gary Locke. “It is simply not responsible to suggest that the new health-care law is bad for business.”

Jim Dugan, a Caterpillar spokesman, said the company’s announcement wasn’t politically motivated. “We take a very prudent and cautious approach as it relates to all of our filings with the SEC and other regulatory agencies,” he said.

Caterpillar and other companies declined to detail how they arrived at the actual charges. They have wide latitude in how they calculate the amount, including different assumptions on coverage levels and mortality rates.

About 40,000 Caterpillar retirees receive company-sponsored drug benefits. A March employer-funded analysis of the impact of the health-care bill by human-resource consultant Towers Watson put the average lifetime value of the prescription-drug subsidy deduction at $2,800. That calculation would put the loss of the deduction at $112 million for Caterpillar, assuming the benefits remain unchanged.

The one-time charge is a hefty number because the company is taking the impact right away of the future changes over the life of the retirees.

But the actual impact on cash flow is much less. The loss of tax deductions for Caterpillar would be closer to about $7 million a year, or less than 1% of last year’s profit of $895 million, based on a 35% corporate tax rate and the $20 million in annual subsidies that the company said it expected to receive in papers filed with the Securities and Exchange Commission. Mr. Dugan confirmed by email that these figures are accurate.

Ken Golden, a spokesman for Deere, declined to discuss how the company arrived at its $150 million figure, or how many retirees are covered by the company’s plan. He said it was too soon to say how retiree plans could be affected at the company.

Several companies that appear to have received the prescription-drug subsidy, based on SEC filings, declined to comment, including Citigroup Inc., Duke Energy Corp. and Whirlpool Corp.

“Given that the legislation is brand-new and subject to ongoing changes, we won’t be offering comment,” said Jill Saletta, a Whirlpool spokeswoman.

Congress granted the subsidy to employers to encourage them to continue to provide prescription-drug coverage to retirees after it adopted the Medicare prescription-drug benefit in 2003.

In 2004, companies booked billions of dollars in gains for the anticipated subsidies, but many later reduced benefits anyway.

Still, an estimated 1,400 private-sector companies still offer prescription-drug benefits for retirees, covering several million people, according to Roland McDevitt, who is the director of health-care research at Towers Watson.

The change in the law is expected to affect primarily industrial companies with retirees represented by collective bargaining pacts, whose benefits are more difficult for companies to cut.

The subsidy has been controversial from the beginning. Companies have been able to receive subsidies even when retirees pay some or all of the cost of the prescription drugs, and have been allowed to deduct the cost of the benefits that retirees pay for. Now, they’ll continue to receive the tax-free subsidy based on their retirees’ contributions, but won’t be able to deduct the amounts.

“Companies not only get the get the subsidy tax-free, but they then deduct the amount. Our bill simply closes the loophole,” said White House Press Secretary Robert Gibbs on Thursday.

—Robert Guy Matthews
and Scott Thurm
contributed to this article.



http://74.125.155.132/search?q=cache:d9DhvVBtYdAJ:online.wsj.com/article/SB20001424052748704094104575143723100528284.html+Three+companies+that+were+among+vocal+opponents+of+ the+legislation+have+warned+they+would+see+an&cd=1&hl=en&ct=clnk&gl=us

orange
04-17-2010, 11:08 AM
p.s.

They didn't. That's the answer.

What stupid-ass email did you get this whopper from?

Just out of curiosity, did you just assume that they didn't exempt themselves, or do you have a source that backs up your assertion?

Yes. Yes I do.

But I'm not the one making the original - I'm waiting for petegz28 to back up his nonsensical claim. With something resembling actual information.

Here's a hint. If something like this was actually out there - it would be ALL OVER Internet. Try Google.

Yes, it is clear that you do. :rolleyes:

Is that a gauntlet I hear being thrown down?

Want to bet avatars?

If you have a source, you'd be a hell of a lot more convincing if you'd provide it rather than playing coy and saying "Yes, yes I do".

So do you?

Yes I do. And I'm not going to post it until I hear back from Mr. gz28.
Or YOU if you want to take my bet.



You never got back to me. I'm STILL waiting!

http://www.clipartguide.com/_named_clipart_images/0511-1001-2519-4221_Cartoon_Depicting_the_Metaphor_for_Tail_Between_Your_Legs_or_Chicken_clipart_image.jpg

http://www.chiefsplanet.com/BB/showthread.php?p=6681809#post6681809

orange
04-17-2010, 12:27 PM
So now that Waxman has canceled his witch hunt, where are Orange and BRC and all of the other liberals who were convinced that these companies were lying?

P.P.S.

A.P. Business Writer Joins in Laughing in Emptybrainiac's Face

Dems cancel hearing on business health care gripes
April 14, 2010 - 7:14pm

By MATTHEW PERRONE
AP Business Writer

WASHINGTON (AP) - Democratic lawmakers on Wednesday canceled a hearing called to hear concerns by AT&T and other corporations about new employer costs in the health care overhaul, saying the companies now believe the overhaul could ease their costs if implemented properly.

AT&T, Caterpillar, AK Steel and other companies said last month they would be forced to take billions of dollars in writedowns because of changes in how health care subsidies will be taxed.

But Energy and Commerce Committee Chairman Henry Waxman, D-Calif., issued a statement late Wednesday, saying he canceled a hearing scheduled for next Wednesday at the request of several companies that want more time to see how the law is implemented.

"Companies like AT&T, Verizon, and a range of stakeholder associations are hopeful that the benefits of the new law will outweigh the costs," Waxman stated.

Beginning with construction equipment maker Caterpillar, a succession of companies said the health care plan signed into law last month would require them to pay new taxes on a subsidy for retiree drug coverage. Some companies said they could decide to scale back benefits to absorb the costs.

Under the 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 spend.

However, company executives have apparently changed their minds about the extent of that cost.

Waxman's statement quotes an AT&T vice president saying that if other parts of law aimed at lowering health care costs are successful, "self-insured companies like AT&T would likely benefit from such reduced costs."

According to a Waxman memo distributed to committee members, the companies were required to estimate the impact of the new health care law to comply with financial regulations. But the charges they cited will be spread out over decades, making it "only a fraction of the amount of the noncash charges reported."

Waxman said he would "schedule hearings on the impact of the law as appropriate," but set no timeframe.


(Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
By MATTHEW PERRONE
AP Business Writer

WASHINGTON (AP) - Democratic lawmakers on Wednesday canceled a hearing called to hear concerns by AT&T and other corporations about new employer costs in the health care overhaul, saying the companies now believe the overhaul could ease their costs if implemented properly.

AT&T, Caterpillar, AK Steel and other companies said last month they would be forced to take billions of dollars in writedowns because of changes in how health care subsidies will be taxed.

But Energy and Commerce Committee Chairman Henry Waxman, D-Calif., issued a statement late Wednesday, saying he canceled a hearing scheduled for next Wednesday at the request of several companies that want more time to see how the law is implemented.

"Companies like AT&T, Verizon, and a range of stakeholder associations are hopeful that the benefits of the new law will outweigh the costs," Waxman stated.

Beginning with construction equipment maker Caterpillar, a succession of companies said the health care plan signed into law last month would require them to pay new taxes on a subsidy for retiree drug coverage. Some companies said they could decide to scale back benefits to absorb the costs.

Under the 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 spend.

However, company executives have apparently changed their minds about the extent of that cost.

Waxman's statement quotes an AT&T vice president saying that if other parts of law aimed at lowering health care costs are successful, "self-insured companies like AT&T would likely benefit from such reduced costs."

According to a Waxman memo distributed to committee members, the companies were required to estimate the impact of the new health care law to comply with financial regulations. But the charges they cited will be spread out over decades, making it "only a fraction of the amount of the noncash charges reported."

Waxman said he would "schedule hearings on the impact of the law as appropriate," but set no timeframe.


(Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

http://www.wtop.com/?nid=111&sid=1934531