American Socialists Declare War

Brendan Miniter has a great article on how Wal-Mart has come under attack by the Left:

http://www.opinionjournal.com/columnists/bminiter/?id=110008023

Always High Taxes

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The war on Wal-Mart is really about expanding government.

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BY BRENDAN MINITER

Tuesday, February 28, 2006 12:01 a.m.

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With the war on Wal-Mart now heating up in nearly three dozen state legislatures, I put a call in to someone who was in on the ground floor in pushing to force the retailer to spend more on health care for its employees. What Maryland's Delegate James Hubbard, a Democrat from Prince George's County, had to say was revealing of both why he backed his state's "Wal-Mart bill" and what this fight is really about: expanding Medicaid and other taxpayer-funded health-care entitlements.

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Let's first understand that the drive to enact anti-Wal-Mart legislation has very little to do with the retail giant except in two respects: dipping into its very deep pockets, and using the controversy surrounding the company to mask the larger agenda of expanding already-bankrupt entitlement programs. Of course, in this war legislators have a ready made ally in the AFL-CIO, which has its own reasons for going after the nonunionized company.

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With that, let's turn to Mr. Hubbard. He began our conversation by pointing out that the Wal-Mart bill--which forces companies with more than 10,000 employees to spend at least 8% of their payroll on health care or pay the state the difference--was always intended to be just the first step. Four years ago, he made his intentions clear by introducing legislation to increase cigarette taxes and to use the tax code to compel employers to provide health insurance. Under his legislation the revenue from these taxes would be dumped into a new state fund that would then be used to expand Medicaid eligibility to families with incomes up to 300% of the poverty line (up from 200% now). But even in a legislature with large Democratic majorities, his bill stalled.

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So Mr. Hubbard and others settled on a new approach--pushing through smaller, bite-sized pieces. The first piece was the Wal-Mart bill. It passed last year and was enacted last month, when the Legislature overrode Gov. Robert Ehrlich's veto. Two weeks ago Mr. Hubbard was at it again, this time introducing a new bill to mandate that companies with at least 1,000 employees spend 4.5% of their payroll on health care or pay the state the difference. Once this piece is in place, Mr. Hubbard told me, the next step will be to create a similar mandate--perhaps 2% or 3%--for companies with fewer than 1,000 employees. Each year, Mr. Hubbard hopes to expand the mandate to include ever smaller companies with the ultimate goal of "health coverage for all Marylanders."

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Mr. Hubbard noted how effective splitting the difference can be in moving legislation toward a larger goal. "If you give up 80% of what you want to get 20%," he said, "after five years you will have nothing left to give up." Mr. Hubbard also noted a quirk in the system that made raising taxes and expanding the Medicaid rolls attractive. With the federal government paying half or more of every dollar spent on Medicaid, states were essentially leaving federal dollars on the table by not expanding the program.

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It is within this context that we should view the National Governors Association's meeting in Washington this week. Like all interest groups, the states' chief executives are determined not to leave town empty-handed; and every year a top agenda item for them is getting more federal dollars to cover the ever-expanding cost of Medicaid. And who could blame them? After all, the federal government created Medicaid as a tiny program in the 1960s.

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Today it eats up, on average, about a quarter of each state's budget and grows every year at a rate that outstrips inflation and threatens to gobble up dollars needed for education and other priorities. Yet Mr. Hubbard isn't the only state lawmaker who has figured out that he can leverage the federal Treasury to his advantage by expanding Medicaid eligibility. New York is well ahead on this learning curve. According to a recent study published by State Policy Reports, the Empire State receives more federal dollars per capita than any other state and more than twice the national average.

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What's now dawning on Wal-Mart CEO Lee Scott is that his company is a middleman in this exchange. So on Sunday he spoke directly to the governors and said there was "too much politics" in state bills taking aim at his company. Of course, that's exactly why more states will target Wal-Mart and other employers in order to raise revenue to expand Medicaid, unless someone in Washington puts a stop to it.
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So then Wal-Mart, and eventually all employers, will not be in the retail business, but in the health-care business.

I'll permit Mr. Limbaugh to do my light-work this time:

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"Wal-Mart is doing more for low-income people than politicians can. That makes the politicians mad, and it threatens them. The Democratic Party, the American left ought to be embracing Wal-Mart. If the Democratic Party really meant what it says about compassion for the less fortunate, for the poor, the hungry, the thirsty, and the whoever, then it ought to be riding Wal-Mart to the bank, they ought to be praising it, trying to make Wal-Mart their friends.

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"Wal-Mart is a big illustration to low-income people that capitalism will accommodate their needs.

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"They are using the power of the state to try to force this private company to support Democrats and Democrat special interests. Universal health care is a Democrat objective. And they are going about it piece meal, bit by bit, small chunks at a time."