House Democrats turn to McCarthy-ite tactics against businesses

The new federal health care law is barely a week old, and already House Democrats are using their power as the majority party to intimidate businesses and silence criticism of the massive legislation.  Not surprisingly, this first round of bullying is coming from the Commerce Committee, headed by Henry Waxman of California, perhaps the Capitol’s meanest and most feared inquisitor.

Shortly after President Obama signed the lengthy piece of legislation into law on March 23rd, several major companies released their own analyses of how the law’s many provisions would affect their companies and their employees.  Caterpillar, for example, estimated the cost to the world’s largest manufacturer of heavy construction equipment to be in excess of $100 million; the John Deere company estimated its expenses would increase by some $150 million.  Verizon and AT&T, while releasing analyses less specific than those issued by Caterpillar or John Deere,  noted that the new law would have significant negative impact on their businesses as well.

Almost as soon as these companies issued their statements, the Commerce Committee’s investigations subcommittee sent ominous letter to the four CEOs, demanding to know how they arrived at their figures and “requesting” that they appear at a hearing scheduled for April 21st.  The letters were signed by Waxman and subcommittee chair Bart Stupak of Michigan, who probably still is smarting from the negative publicity he received after his 11th-hour conversion from pro-life opponent of the health care bill to ardent supporter.

In Orwellian prose, the Waxman-Stupak letters express “concern” with the CEOs’ figures and analysis, especially since they are identified by the congressmen as being “in conflict with independent analyses.”  One of the “independent analyses” cited in the letters is one used by the White House and congressional Democrats to support their position that the $1 trillion bill would wind up actually “saving” taxpayers monies.  The analysis referenced by Waxman and Stupak actually was conducted by the Congressional Budget Office (CBO), which is well-known for furnishing members of that body numbers that support whatever they want them to support, since its analyses must be based only on figures furnished by the requesting members themselves.

Another “independent” analysis noted in the letters included figures from the Business Roundtable,  a group of businesses which already had alienated many of its members because it had decided early on to actively support the health care legislation.

The four targetted CEOs are “requested” by Waxman and Stupak to provide not only the “analyses” on which were based the estimates of the cost of the health care legislation to their companies; but also any other data — internal company including e-mails – relating in any way to the matter of determining the impact on their companies.  Additionally, the companies are “requested” to furnish an explanation of the “accounting methods” used by them over the past seven years in calculating the financial impact of the deductability or non-deductability of retiree drug coverage.

Whether and how these companies will stand up to this thinly-veiled move to intimidate them for simply disagreeing with self-serving congressional “analyses” of its health care legislation, remains to be seen.  However, if they fail to exhibit sufficient resolve in doing so, a new wave of McCarthy-like bullying designed to silence criticism can be expected to permeate future political and economic debates.

69 comments Add your comment

retiredds

March 31st, 2010
3:08 pm

Jess, Ford is not taking the accounting charge. I think the truth of the matter is that some will and some won’t. I don’t think ideology plays a role here, just wishful thinking on your part.

TW

March 31st, 2010
3:13 pm

Waxman is kind of like you, Bob, only he’s tough, smart, and cares about other people.

Barack

March 31st, 2010
3:35 pm

You all should quit whining. Just look at the ADP jobs report for private employers that came out today. That should cheer you up!!! Although ADP had forecasted 40,000 private sector jobs would be added to payrolls in March, actually 23,000 jobs were CUT. Now that is what I call health care refom in action. Change you can believe in baby!!! Mr. Waxman is nothing but a gasbag.

joan

March 31st, 2010
4:35 pm

I am all for “change” and sincerely “hope” for it in this fall’s election. And if the Republicans don’t toe the mark, then we will dump them too, and keep turning these puppies over until they understand who is in charge.

No More Progressives!

March 31st, 2010
5:03 pm

TW

March 31st, 2010
3:13 pm
Waxman is kind of like you, Bob, only he’s tough, smart, and cares about other people.

Waxman is smart? Fooled me……………

Ragnar Danneskjöld

March 31st, 2010
5:51 pm

Dear retiredds @ 2:15, apologies for slow response. I agree with your factual observation that oil prices dropped significantly through the 1980s after the first year of the Reagan administration, but I disagree with your analysis of causation. Government price restrictions – imposed by President Nixon, not removed until after the departure of President Carter – artificially suppressed production. When the price caps were removed, greedy producers decided to make a killing by flooding the market with refined product, and the glut that followed brought prices down to the true market. Classic economics.

Dear No More @ 2:41, thank you, I merely built on the work of a genius.

Paul Leighty

March 31st, 2010
6:51 pm

The only McCarthy-ite tactics here is the ‘Orwellian prose’ of Mr. Barr. to twist and distort the fact that Chairman Waxman is exercising his committees legitimate duty to try to find out the truth about these companies statements. Since Mr. Barr is well known throughout the country for telling outright falsehoods as one of your congressmen, I believe that this is a text book case of the pot calling the kettle black. Paul from Seattle.

The Wild West » Blog Archive

March 31st, 2010
8:48 pm

[...] that published nine-digit damages anticipated from the insurance reform bill were being intimidated. Almost as soon as these companies issued their statements, the Commerce Committee’s [...]

Louie

April 1st, 2010
7:48 am

jackhammer, where you at ??????????//

jconservative

April 1st, 2010
9:07 am

Do not get excited over this. I was, and still am opposed to, the “health care reform” bill now US law.

Caterpillar’s $100 million is not a major concern, their regular business expenses were over $8.5 billion last year. That is why they elected to release the info after the bill was signed into law, it is not a major expense item.

All the info they will provide Congress is already in their latest 10K filings with the SEC. I just looked at one of Caterpillar’s 10K filings, you can do the same. Public info. Waxman is simply bringing them up for publicity.

Every time a company is asked to appear before congress it is just for appearances. This is no better or worse than any other.

The problem will be those companies that will have an expense related to this health care bill and try to hide it from the from the public/investors/stockholders. And there will be some.

retiredds

April 1st, 2010
10:29 am

Ragnar, I am just getting back so I wanted to ask two questions: (1) Are you saying that it was ONLY government fiat that doomed the auto companies and the free market mechanism and poor judgment by the strategic planners of the US auto companies had nothing to do with the auto makers plight when gas prices changed for good in 2002 and 2003? (2) How come the foreign auto makers, who made a lot of efficient autos here is the US, were able to see that fuel efficiency would be important to their bottom line over the long term?

DirtyDawg

April 1st, 2010
11:02 am

Dammit Barr, you know full well what these corporations are doing and the excuse they’re using to do it…and shame on you for not pointing it out. Of course, I’m not surprised since you’ve clearly been forced to ‘drink the kool-aid’ of ‘not cuttin’ this administration, or Democrats in general, any slack, or give them credit for anything, at all’.

As for the money, particularly with at&t, that’s being ‘written off’. in this quarter…In 2003, with the passage of the prescription drug bill for Medicare recipients – the one where they refused to allow ‘negotiated’ prices with Big Pharma and left that huge ‘doughnut hole’ that hit so many so hard – the Bush admin also ‘gave’ corporations a 28 percent ’subsidy’ for them to provide ‘prescription drug’ coverage for their retirees…and, at the same time, they also allowed the corporations to ‘deduct’ that same 28 percent from their taxes – so rather than an ‘honest’ deduction of the 72 % that they actually spent, the got to deduct, in essence, 128%. Stated another way, the difference in what they should have deducted – 72 cents on a dollar versus $1.28 – is actually 77% more than they should have. Now is that a ‘loophole’ or a chasm? All this bill does is to stop these corporations from taking this ‘inflated’ deduction and only being able to ‘charge off’ what they actually spent of their own money. They’re still getting the 28% subsidy.

And on top of that, Ma Bell, decided to ‘write down’ thirty years’ worth of these forecast, bogus, deductions. Why? Probably to make the health care bill look worse. It sure ain’t that their retirees are likely to live another 30 years. Those of us that have had to endure dealing with Ma over these past few years – since she took over from BellSouth – have known her to be not only a Cheap Mother, but an ‘abusive’ one as well.

Tell the whole story, Bob, you’re better than this.

joan

April 1st, 2010
11:10 am

Waxman has to be smarter than Hank Johnson. I can see Waxman’s brain through his nose holes.

David

April 1st, 2010
11:39 am

Sounds like the chickens of reality have come to roost with corporate responsibility. The costs have to be paid somewhere. Before the plan, the costs were passed on to consumers and Medicaid for the price of treatment for the uninsured.

If the GOP doesn’t like it, they should have put forth a plan. Oh, wait, they did, and this is it.

You can’t complain about a plan that your own party created.

For myself, I would’ve gone for a single-payer system, or at the least, a public option, because this bill will do little to help the middle-class afford health care.

Ragnar Danneskjöld

April 1st, 2010
11:49 am

Der retiredds @ 10:29, apologies for slow response, thanks for the note on the other site. Your questions are fair:

(1) “Are you saying that it was ONLY government fiat that doomed the auto companies …” intellectual integrity requires that I demur – I cannot affirm that “only” government policies doomed the auto companies, I can affirm only that government policies were sufficient alone to doom the auto companies. Had the CAFE and safety mandates offered some off-setting (even if unrelated) cost saving to set a level playing field – e.g., more liberal capacity to invalidate a union contract, or even taxpayer grant/subsidy for retooling expense – we could reasonably charge managerial incompetence or market changes as a/the principal causation.

(2) I do not grant far-sightedness as an inherent attribute of the foreign car manufacturers. They simply made the vehicles that fit their home markets, and adapted those for sale in the US. Congress then changed US laws to compel the US market to change, so the foreign car manufacturers obtained a US legislative “windfall.” Do I deny the long-term technological leadership of Honda, or the ground-breaking nature of the Toyota hybrid technology? No, of course not, but I also believe that GM would have been the pioneer but for the massive retooling costs inflicted by Congress. Simply an unanticipated consequence of too much government.

retiredds

April 1st, 2010
12:21 pm

Ragnar, thanks for your response. You have made some good points that should be in the equation. I still lean to the side that market forces played a major role as well. Part of my reasoning is that Wall Street demands a quarter-by-quarter gauge of “progress”. I think this inhibits longer term thinking and planning, for some. Also the incentives to the auto execs who are the decision makers have been too short-term oriented. In the auto industry a short-term, 1-2 years and 5-10 year bonus system would be more sensible, especially if the pay-off for the longer term were “very” substantial.

I recently went to the Atlanta Auto Show. All the companies represented, including GM and Ford, were showcasing their fuel efficiency and lower carbon emissions. If today’s auto numbers are a start for American autos to regain market share it pleases me no end. By the way, I bought a Ford Focus wagon in 2000 and it still gets 30+ highway and 26+ city. My next vehicle will need to match or, preferably, exceed those numbers. Not trying to boast here but I have always felt there was a strong market for cleaner fuel efficient cars.

I know I’m rambling, but don’t you think that the US auto companies could make a large SUV or large pick-up truck that could get 40+ miles to the gallon? I do. Why not put a few GA Tech, MIT, or Cal Tech men and women on it. Bet they’d have something if short order, especially if the auto companies offered them a significant seven figure bonus. We put men on the moon in 10 years, I think we could do this in 5. Then I would have them move onto new ways to transport people around Atlanta without needing the car. I get ahead of myself, sorry.

Ragnar Danneskjöld

April 1st, 2010
12:43 pm

Dear retiredds @ 12:21, other than our views of the virtue of government management we are broadly in agreement. I sense – without any informed basis – that the Volkswagen clean diesel technology could produce your good-mileage large truck/SUV. Of course, if we had unlimited cheap electricity (e.g., fusion) you could burn hydrogen in the vehicles. (Get ready for the 2013 Cadillac Hindenburg.)

retiredds

April 1st, 2010
1:08 pm

Ragnar, I like your Cadillac analogy. I think I’ll let others test drive that one. Have a good day. I’m going outside to soak up some rays, while they last.

No More Progressives!

April 4th, 2010
6:34 am

joan

April 1st, 2010
11:10 am
Waxman has to be smarter than Hank Johnson. I can see Waxman’s brain through his nose holes.

The Hahira villiage idiot is smarter than Hank Johnson.