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July 1, 2009
Wal Mart: If you can't beat 'em, join 'em.
Wal-Mart has deserted their business allies at the Chamber of Commerce and National Association of Manufacturers and publicly embraced the mandate in the health care bill that would require businesses over a certain size to supply the employees with insurance.
Janet Adamy and Ann Zimmerman of the Wall Street Journal have the story:
In a major break with most other large companies, Wal-Mart Stores Inc. Tuesday told the White House that it supports requiring employers to provide health insurance to workers, a centerpiece of President Barack Obama's effort to provide near-universal coverage to Americans.
The support of Wal-Mart, the nation's largest private employer, could give momentum to one of the most-contentious aspects of legislation taking shape in Congress to fix the health system. To help pay for covering the 46 million uninsured, lawmakers have proposed mandating that all but small employers provide insurance for workers or help pay for it.
Lobbies for large corporations have opposed the idea. The U.S. Chamber of Commerce has fought such a mandate, saying it would prompt companies to cut jobs, lower wages and possibly drive them out of business. Wal-Mart -- which provides insurance to employees and wants to level the playing field with companies that don't -- on Tuesday delivered a letter to President Obama taking a different stance.
"We are for an employer mandate which is fair and broad in its coverage," said the letter, signed by Wal-Mart Chief Executive Mike Duke. Andrew Stern, president of the Service Employees International Union, also signed the letter, along with John Podesta, who led President Obama's transition team and is chief executive of the Center for American Progress, a liberal-leaning think tank.
The move "flabbergasted" the National Retail Federation but perhaps it shouldn't. Wal-Mart is reacting to what it sees as the inevitability of such a plan and is acting in the company's best interests. It is a little suprising that Stern would have much to do with Wal-Mart. And it is a little shocking that the CAP's Podesta would be involved at all. CAP has a lot of ex staffers and board members working in the White House so Podesta's presence may indicate some pressure put on Wal-Mart by Obama's people.
When Franklin Roosevelt initiated the new deal, Joseph P. Kennedy redirected his son's career paths from the private sector to government service because "that's where the action will be" in the future. He was reacting to what he saw as the reality of the growing power of government. Now Wal-Mart has done something similiar by embracing a costly program that was going to happen anyway. If along the way they garner a little good will from the Obama administration, that doesn't hurt either.