The new Medicare legislation actually provides a giant subsidy to Corporate America: "Some companies with many retired workers are expected to post big earnings gains for 2003 or 2004, thanks to accounting guidelines for subsidies under the federal prescription-drug program." That gets right down to it. Of course there's more:
...if an employer and a retiree each pay $1,000 toward the retiree's medical costs, the employer's subsidy is calculated on the full $2,000, bringing the company a total subsidy of $490, rather than the $210 that it would get if it received a subsidy only on its share. [paragraph break] As a result, when combined with tax and accounting rules, the program allows employers in some cases to use the subsidy to erase the entire cost of prescription drugs for retirees, or even turn a profit from a drug plan.
It's as if it didn't occur to the right lobbyists that congress just vacuumed money away from us to give to big corporations. I hope this gets more play that just the Wall Street Journal. That's something you have to pay to read, and most people aren't subscribers.
I was already angry over the Medicare drug bill, and I was aware that some retirees would lose their coverage simply because their employers didn't want to pay for something the Feds would cover...but I didn't quite turn it upside down and make the connection that I'm now paying for a giant corporate subsidy when that money is taken out of my paycheck. Now that corporations will have a little extra money in the benefit area, maybe they'll use it to shore up their defined-benefit pension plans.
Yeah, right.
Posted by nicole at January 09, 2004 09:04 AM