By Scott Hensley
Arcane accounting rules don't usually make for Congressional fireworks. But we were really looking forward to a scheduled clash next week between Rep. Henry Waxman (D-CA) and a bunch of companies that said the new health law is going to cost them big time.
How come? When congressional staffers took a look at the companies' books, they concluded their financial filings making provision for higher future taxes were legit. (Read the report here.)
AT&T, Verizon, Caterpillar, and Deere & Co. made waves when they informed investors and the Securities and Exchange Commission that they would take big hits because the health law eliminates a tax deduction on federal subsidies that help defray the cost of drug benefits for retirees.
Heavy equipment maker Caterpillar said it would take a $100 million charge in the first quarter of this year. AT&T said its charge would amount to $1 billion.
Waxman didn't buy it, launched an investigation and sent letters to Caterpillar and the other firms demanding an explanation. Now, the accountants say the companies' charges are by the book.
That said, the companies only lose the tax deduction on the subsidies -- not the subsidies themselves -- and the change doesn't take effect until 2013.
Other parts of overhaul health law could help the companies. As the congressional report notes, "Several companies and their representatives said that if the new law is implemented correctly, the overall impact of the law on large employers could be beneficial."