Md. Legislature Overrides Veto on 'Wal-Mart Bill'

John Wagner
Washington Post Staff Writer
Friday, January 13, 2006; 3:00 PM

Washington Post staff writer John Wagner discussed Maryland lawmakers' vote to become the first state to effectively require that Wal-Mart spend more on employee health care.

In a veto reversal that was closely watched nationally, lawmakers in the Democrat-led General Assembly voted largely along party lines for a measure that legislatures in more than 30 states are considering replicating.

Read More:

Md. Legislature Overrides Veto on 'Wal-Mart Bill' (Post, Jan. 13)

The transcript follows.


John Wagner: Welcome to a chat about the bill that cleared the Maryland legislature yesterday that requires Wal-Mart effectively to spend more on employee health care. I look forward to your questions.


New Orleans, La.: Will Wal-Mart challenge this law on the basis that it is preempted by ERISA? One of the basic concepts behind ERISA is that employers are encouraged to voluntarily create employee benefit plans such as for health insurance. Maryland's law would seem to be undermining this purpose.

Second, will Wal-Mart move out of Maryland? What would the Legislature do then?

John Wagner: The Maryland Chamber of Commerce and other business groups have argued that the bill is preempted by ERISA. The state Attorney General's office takes a different view.

Wal-Mart says its lawyers are looking at the issue, and several legislators expect that the company will take legal action.

It's unlikely Wal-Mart will move out of Maryland, though the fate of a distribution center planned for Somerset County, one of the state's least wealthy, hangs in the balance. It could be located in Delaware instead.


Baltimore, Md.: Maryland delegate Clarence Davis, Democrat baltimore city 45 district, was the only rep. from the democratic party in Baltimore that didn't vote for the Wal-mart override -- where was he hiding? Why didn't he vote on such an important issue considering the demographics of his district?

John Wagner: Delegate Davis voted for the bill when it passed last year. He said further reflection made him doubt the wisdom of targeting a single company. He planned to vote to sustain the override, and his decision not to vote was somewhat of a surprise.


Gaithersburg, Md.: "Wal-Mart spokesman Nate Hurst said there are 786,000 uninsured people in Maryland, and fewer than one-half of 1 percent of them work for Wal-Mart. Bruce Josten of the U.S. Chamber of Commerce said that roughly 25 million of the more than 45 million uninsured Americans work for companies with 10 or fewer employees." -Taken from the WashPost article- It has been said that one reason why Gov. Ehrlich vetoed the bill is because that although the employee highmark stands at 10,000, eventually it would be lowered (not neccesarily down to 10) in the future to affect more employers and people. In other words, the 10,000 highmark today may turn into 5,000 in the future. Any truth to this?

John Wagner: Opponents of the bill argued that there could be a "slippery slope" like that you describe. Supporters say that is not their immediate aim, though there has been a bill considered -- but not passed -- in recent years that would apply to employers of any size. It would mandate a lower threshold of health spending, however.


Los Angeles, Calif.: There's a lot of talk that this bill will prompt other states to take similar measures. Do you think this will affect Wal-Mart's expansion into California and other states?

John Wagner: Currently, more than 30 states are considering similar bills to the one that passed in Maryland. It's hard to say how action in any one state will affect Wal-Mart's plans, particularly if multiple states move forward with legislation.


Washington, D.C.: Mr. Wagner,

When does this become effective? How soon can MD Wal-Mart employees see an improvement in their insurance?

John Wagner: The bill becomes effective immediately, but the first requirement imposed on Wal-Mart does not come until next year, when it must report its level of spending on health care. At that point, if the company falls short of the 8 percent threshold, it could be required to pay an assessment of the difference into the state Medicaid program.


Mount Rainier, Md.: Assuming optimistically that Wal-Mart will just eventually comply with the new law, will they opt to pay into the Medicaid system, or up their direct payroll costs?

John Wagner: The hope among bill advocates is that the company will improve its benefits and not be subject to the assessment.


University Park, Md.: Did the governor even try to prevent this override? Given that he has total control over the budget and it is not yet announced, it seems that he had a fair amount of leverage that could have been used to sway members that were on the fence.

John Wagner: The governor's office said it lobbied the issue hard but that it ran into difficulty because of the strength of the unions backing the bill and the large margins that Democrats hold in the legislature. In both chambers, the number of Democrats exceed the three-fifths margin that is needed to override.


Washington, D.C.: The override was quite a coup for Vinny DeMarco and his organization, the Maryland Citizens Health Initiative, which conceived the Fair Share Health Care bill a few years ago. Does the override make it more or less likely that health care advocates like DeMarco will pass even stronger measures in 2006?

John Wagner: The group says its agenda for 2006 is focused on providing tax credits and grants to help small businesses with insurance for their workers.


Germantown, Md.: John-Thank you for hosting today's session. The Maryland Public Policy Institute ( ) just released a study that questions the basis of the "Wal-Mart" bill.


John Wagner: Consider this a plug.


Cooksville, Md.: Doesn't a law such as this border or cross into socialism? Is this an example of the immense power of lobbyist and the need for campaign reform?

Thank you

John Wagner: Some opponents of the bill did argue that it represents a first step toward state-run health care.

There was a good deal of lobbying on both sides of the bill. Wal-Mart deployed a dozen Annapolis lobbyists in its ultimately unsuccessful effort.


USA: High-wage, unionized employers are suffering because of health costs. (Example: GM, where health insurance is said to cost $1500 per vehicle.)

Low-wage, non-unionized employers (Wal-Mart) are getting bad publicity and legislative pressure for their (lack of) health care coverage for their employees.

So, given that business interests have a huge amount of power in this country...

Do you see any movement building to address the whole health care issue?

John Wagner: Actually, state lawmakers said they embraced this issue in part out of frustration with a lack of broader reforms on the federal level. This, they said, was something they could actually accomplish.


College Park, Md.: could Wal Mart respond by laying off people to get under the 10,000 mark?

John Wagner: The company says it has about 17,000 employees in Maryland, so that seems unlikely.


Maryland Voter: Where can we find the voting tallies for the House and Senate?

Will The Post make them available?

And, do you know which members voted differently yesterday than they did last year?

John Wagner: The Post plans to publish the votes of area lawmakers tomorrow. Stay tuned.


Maryland: I live here and have followed this closely. Do you have a sense for how much of a national story this is?

John Wagner: There was certainly national media interest yesterday. House Speaker Michael Busch was interviewed by CNBC soon after the bill passed. Governor Ehrlich and others involved in the fight had also made national media apperances in recent days.


Arlington, Va.: Considering all of the turmoil with labor unions over the last year, would you say that the fact that SEIU, UFCW, AFL-CIO, etc., were all working side-by-side on this a sign that unions are just as strong as ever when it comes down to it?

John Wagner: On this particular issue, at least, they did seem to come together for a common cause.


Navy Yard, Washington, D.C.: Could WalMart split it's Maryland operations into two or three legally separate units to get under the number?

John Wagner: Some lawmakers have raised that possibility. So far, there's been no comment from the company about the prospect.


Germantown, Md.: At best the Fair Share Health Care Fund Act will maybe provide health care coverage to 1,000 - 2,000 people out of the 700,000 plus uninsured in Maryland. Why haven't lawmakers put forth sound proposals that would cover more of the uninsured, and why would they force a company, Wal-Mart now being the only one, to pay into the state Medicaid fund which itself is on track to fiscal disaster?

John Wagner: Bill supporters argued that this is only one part of addressing health care access. In theory, Wal-Mart paying into the Medicaid program should help reduce its growth, at least marginally.


Silver Spring, Md.: Seems like Senate President Mike Miller has turned from a friend to an enemy of Governor Ehrlich -- and turned into a strong ally of Speaker Busch. Does it look like they'll succeed in overriding a series of other Ehrlich vetoes, like the minimum wage?

John Wagner: The House yesterday overrode Ehrlich's veto of a bill that would raise the state's minimum wage by $1. The Senate is expected to follow on Tuesday.


John Wagner: This ends the chat. Thanks so much for all your questions.


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