Originally uploaded at SSRN.


Is the Patient Protection and Affordable Care Act (ACA) bad for business? Did the countries' most prominent companies game the Securities and Exchange Commission (SEC) disclosure process to make negative political statements about ObamaCare? Immediately following the ACA's enactment on March 23, 2010, a number of companies drew scrutiny for issuing SEC filings writing off millions – and in AT&T's case, one billion dollars – against expected earnings for 2010 alone, based on a single, discrete tax-law change in the ACA. Congressional and Administration officials accused the firms of being "irresponsible" and using "big numbers to exaggerate the health reform's burden on employers." To further test the suggestion that these disclosures were politically motivated, we searched all publicly filed SEC real-time and scheduled filings forthe quarter following the ACA's enactment. We identified 147 firms that issued SEC disclosures relevant to the tax-law change, writing off a total of five billion dollars. Our deeper analysis of these data amplifies the congressional committee's conclusion that the firms' disclosures were consistent with SEC requirements and financial accounting standards. A handful of firms account for the bulk write-offs, but the only evidence of political speech was by politicians. The episode has significant implications for government regulation of corporate speech and the integrity of the securities disclosure system, particularly as the remaining portions of the ACA are implemented.