After President Obama signed the new health care bill into law, large corporations like AT&T, Catepillar and John Deer announced that a provision in the law that preserves the subsidy employers receive for providing retirees with prescription drug coverage, but prevents companies from deducting it from their taxes, would lead to billions in losses. Energy and Commerce Chairman Henry Waxman (D-CA) called a hearing to investigate the claims and Republicans immediately seized on business’ opposition to the provision to argue that the new law would severely disadvantage employers and hurt the economy. Conservatives even portrayed Waxman’s hearings as a “witch hunt” against “companies who dare speak out about the costs and consequences of Obamacare.”

Well yesterday, Waxman unexpectedly canceled the April 21st hearing, but not before releasing the results of the committee’s investigation into the corporation’s claims. Committee staff “reviewed records produced by each company,” met or spoken with representatives of the companies, as well as with a number of industry trade associations” and concluded that while the companies “acted properly and in accordance with accounting standards” in projecting losses from the bill, “the actual impact on annual company cash flows will be only a fraction of the amount of the noncash charges reported to the SEC”:

Although the reported noncash charges are quite large, the impact is spread over a long period of time. The tax change also does not take effect until 2013. The actual impact on the companies’ annual cash flows will be much smaller than the amount reported in the filings. Companies that made the filings calculated the present day value of taxes that will be paid over 30 or more years. In fact, AT&T told the Committee staff that its figure was calculated to “infinity.” [...]

The result is that the annualized impact on each company will be less than the amount charged against earnings. AT&T reported a one-time charge of $1 billion to the SEC, but documents provided to the Committee estimate that the tax change will reduce the value of the subsidy by just $44 million annually. Caterpillar reported a one-time charge of $100 million, but the documents it provided to the Committee estimate that the annual cost will be just $8 to $10 million. While Verizon reported a one-time charge of $970 million, it predicted an annual decrease in net income of $100 million, less than 1% of the $10.4 billion in net income the company reported for 2009.

In fact, when staff spoke to these companies, they acknowledged that reform could help reduce their health care spending. John Castellani, the President of the Business Roundtable, said, “If implemented right, the law has the potential to make employers and employees better off because it could bend the cost curve.” “Should the structural reforms intended to reduce the costs of delivering healthcare under the PPACA ultimately prove successful over time, self-insured companies like AT&T would likely benefit from such reduced costs,” an AT&T representative added.

None of this is very surprising, however, because closing the double dipping provision for retiree benefits does not result in a loss of real wealth. For the last seven years taxpayers have been bribing these companies to continue providing prescription drug coverage to their retirees by paying for 28% of their expenses. AT&T and Boeing cashed the checks and deducted the value of the credit from their taxes. Under the new health reform law, companies are still being bribed, but they’re no longer able to deduct that money from their taxes and so they must revise their future earning projections. They’re revising how much they think they will receive in subsidies in the future.

Last night, Fox News hosted what may have very well been the first conversation about how the constitutional challenges fit into the current state of law. Greta Van Susteren invited Charles Fried, the former U.S. Solicitor General under President Regan, to explain his opposition to the lawsuits. Fried did what few Fox News guests ever attempt: he used Supreme Court precedent to predict how the Court would respond to the lawsuits.

Fried was so certain that the Court would preserve the health law, he promised to eat an Australian leather hat on television if was ever overturned:

VAN SUSTEREN: You have said this lawsuit in Florida is ridiculous. Why?

FRIED: That’s correct, it is ridiculous, because, first of all they say that they are going to pass a statute which will exempt Florida citizens from the reach of the act. If the act is unconstitutional you don’t need it. And if the act is constitutional, it is useless, because we fought a civil war about that. State legislatures can’t just bow out of the constitutional federal statute. So that’s nonsense, and I think any serious person knows that.

So, the question is, is it constitutional? And it seems to me, though there are a lot of things to object in this, and I would be the first to say so, the constitution is not one of them. If you don’t like it, repeal it or amend it. But don’t ask the courts to do the job for you, because they won’t. [...]

VAN SUSTEREN: The issue that will confront the federal judge, and the Supreme Court if it goes on, is whether or not the Commerce Clause gives the federal government the power to do this….And does the constitution in your opinion, sir, enable them?

FRIED: It certainly does. The statute which I have in front of me, I bothered to read it, says that the health insurance industry is an $854 billion dollar industry. That sounds like commerce. The Supreme Court just five years ago with Justice Scalia in the majority said that it is all right under the Commerce Clause to make it illegal for California for residents in California to grow pot for their own use, because that has affect on interstate commerce. Well, if that has affect on interstate commerce, what happens in an $854 billion national industry certainly does.

VAN SUSTEREN: Is there any possibility, in your mind, or any thought that you could be wrong?

FRIED: Well, I suppose I could. But I’ll tell you what, I would be happy to come on this program and eat a hat which I bought in Australia last month made of kangaroo skin.

Watch it:

All of this is a major obstacle for those who argue that the mandate violates the 10th amendment. The Court has decided that the Commerce Clause grants Congress the authority to regulate economic activity among the states. And, since federal laws are supreme to the laws of the states (under the supremacy clause), states have to heed the new mandate requirements. The tenth amendment only provides that states retain powers that are not granted to Congress. (H/T: MMFA)

Yesterday, former Gov. George Pataki (R-NY) announced that he will head a new organization to lead the charge for repealing health care reform. Pataki’s group, Revere America, will launch a nationwide petition drive to “repeal and replace” the health care reform legislation in Boston on April 18 – the 235th Anniversary of Paul Revere’s ride — after which Pataki will “embark on a cross-country tour that will ultimately take the Revere America petition drive to all 50 states.” “Revere America is being launched to counter the forces of liberalism by advancing common sense public policies rooted in our traditions of freedom and free markets, and that will once again make America secure and prosperous for generations to come,” Pataki said.

Pataki appeared on Morning Joe today to explain what those “common sense public policies rooted in our traditions of freedom and free markets” actually are. Here is Donny Deutsch challenging Pataki to name five Republican health care ideas that could replace the existing law:

PATAKI: First of all, we can lower the cost of health care by having true medical malpractice reform….Second of all, we can allow people to purchase across state lines.….Third, put in place health care accounts where you have health savings accounts so you can follow the model that many companies have used where they have comprehensive health care coverage that has a high deductible…. Four, put in place some off the very good things that are in the bill like pre-existing conditions and lifetime caps. And five, undo the taxes that have — are going to be suffering under this new health care bill.

Watch it:

If I’m hearing him correctly, Pataki actually only has 3 ideas to reform the health care system and all three are already part of the bill in one form or another. While the malpractice reform provisions could be stronger, the bill does fund state-based demonstration projects to determine the best way to lower malpractice costs. Americans can buy health care across state lines if their state forms a compact with other states and expects actually expect more people to opt for HSAs under the new health care law (taxes for health savings account withdrawals before age 65 for nonqualified medical expenses will increase from 10 percent to 20 percent, beginning in 2011.)

To be clear, these provisions are not exact replicas of Republican proposals. They’re compromises designed to attract Republican support and appease conservative Blue Dogs. (Which, incidentally, is the very kind of bipartisan approach to politics that Republicans have been demanding since they found themselves in the minority.)

Pataki isn’t arguing that we should repeal this bill and replace it with some new innovative proposal to increase access to coverage and lower health care costs. He wants to repeal a fairly conservative reform bill and replace it with its slightly more conservative uncle. That, to me, sounds like a waste of time that only a man who’s hoping to run for future office would be willing to engage in. But more broadly, if all of the repealers’ ideas are already in law, what does it say about their efforts and…well reform itself?

Controversial Gov. Bob McDonnell (R-VA) has proposed an amendment to the state budget that would withhold “state money for abortions, including cases in which the health of the mother is at risk or the child might be born with a deformity. Under the proposal, money could be spent on abortions in cases of rape, incest or when the life of the mother is at risk” — thus meeting the bare minimum requirements of the federal Hyde Amendment.

Lawmakers will now have “a week to consider the governor’s alterations before returning Wednesday for a one-day reconvened session in which they can override the amendments or write them into law.”

McDonnell’s position is somewhat ironic, however. His new funding restrictions are intended to encourage women to go through with their pregnancies, but his other budget proposals would actually make it more difficult for mothers to obtain government assistance. For instance, McDonnell “proposed capping state spending on comprehensive services for at-risk and troubled children. The change would result in a $9.9 million cut to funding for programs that were already reduced by $86 million over two years.”

Currently, Virginia prohibits public funding for abortion for women eligible for state medical assistance for general health care unless: (1) the physician certifies that the woman’s life or health would be substantially endangered if (2) the pregnancy is a result of rape or incest that has been reported to a law-enforcement or public-health agency; or (3) a physician certifies that the fetus will be born with a gross and totally incapacitating physical deformity or mental deficiency. Moreover, a woman may not obtain an abortion until at least 24 hours after a provider offers a medical explanation of the procedure, the probable gestational age of the fetus and offer to review state-prepared materials about alternatives to abortion.

Virginia, which is already spearheading it’s own constitutional challenge to health care reform, may also soon offer legislation that would strip abortion coverage from the exchanges established under the new health care reform law, a conservative anti-abortion site is reporting.

On Sunday, the New York Times’ Kevin Sack reported on the difficulty Mitt Romney faces in convincing conservative voters that the new health care reform law is substantially different from the reform he signed in Massachusetts. “As he promotes himself as a problem-solving pragmatist, Mr. Romney can justifiably point to the landmark universal coverage law in Massachusetts that he, as governor, proposed in 2006,” Sack writes. “But as he appeals to conservative activists and Republican primary voters, he is trying to draw nuanced distinctions between his Massachusetts law and the federal legislation that shares many of its fundamental elements, including a requirement that people have insurance.”

Currently, Romney is denying that Massachusetts served as a template for national health reform reform, but Sack’s article suggests that the former Governor may be prepared to change his position if he wins the Republican Presidential nomination in 2012:

“I keep on scratching my head,” Mr. Obama said at a fund-raising reception in Boston. “I say, ‘Boy, this Massachusetts thing, who designed that?’ ”

In response, Mr. Romney is reminding audiences that Mr. Obama has cast the Republicans as the “party of no,” devoid of ideas. “And yet,” Mr. Romney said in Bedford, “he’s saying that I was the guy that came up with the idea for what he did. He can’t have it both ways.”

He added, “If ever again somewhere down the road I would be debating him, I would be happy to take credit for his accomplishment.”

Taking credit for ObamaCare shouldn’t be too difficult. Romney is already coming around to supporting key portions of the new health care law. On Monday, Romney appeared on Fox News Business and made the case for the individual mandate and subsidizing insurance to individuals who can’t afford to buy their own coverage. “Everybody in America today has health care. If they get sick, even without insurance, they get free care, paid for by government. We said no more of that. No more free riders. We want people taking personal responsibility for getting health insurance if they can afford it,” he said.

“We said, no, no. If you can afford it you have to buy insurance on your own. Half the people can afford it, bought insurance on their own. No more government subsidy for them. Others we had sliding scale based on income.” Watch it:

Last week, Romney added even more nuance to his position, telling the New Hampshire Union Leader that it was unconstitutional for the federal government to require everyone to purchase insurance coverage. “I think it’s unconstitutional on the 10th Amendment front,” he said.