RED ALERT: Dems’ Takeover a “Serious Mistake” for Job Creation

Buried Provision Deals a “Serious Blow” that “Discourages Companies from Hiring More Workers”

“An association representing 300 large corporations urged President Obama and Congress on Monday to repeal a provision of the health care overhaul that prompted AT&T, Caterpillar and other companies to announce substantial charges for the current quarter.

“The association, the American Benefits Council, said the provision — which reduces the tax deductions for companies with drug coverage for their retired employees — would deal a significant blow to corporate profits and would discourage companies from hiring more workers.”

“James A. Klein, the president of the American Benefits Council, called the provision ‘a serious mistake that is having negative and unintended consequences.’

“White House officials defended the provision, saying it was a deliberate effort to eliminate what they said was an unusually generous tax loophole.”

“AT&T said in a filing to the Securities and Exchange Commission, ‘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.’

“Henry A. Waxman, a California Democrat who is chairman of the House Energy and Commerce Committee, criticized the charges by the companies, asserting that the health reform would save companies more money than it cost them.”

“Mr. Klein argued that the provision would undercut Mr. Obama’s job creation plans. ‘If companies are going to take a hit like this on their financial statements that will certainly hurt their ability to borrow in the marketplace and make the type of investments that will retain and create jobs,’ he said.

“But White House officials said the provision would not affect job creation because it does not take effect for three years and any charge for a given year would not be large.”

(Steve Greenhouse, “Companies Push to Repeal Provision of Health Law,” The New York Times, 3/29/10)

By Code Red