Michigan senator takes on 'deadbeat corporations'
2/10/2006TAYLOR, Mich. - State Sen. Ray Basham, a Democrat from this working-class suburb south of Detroit, wants welfare reform of a different kind. Instead of going after welfare queens and deadbeat dads he wants the state to stop subsidizing "deadbeat corporations."
"These are large, rich companies who have been fleecing the taxpayers out of hundreds of millions of dollars in avoidable Medicaid costs," he fumed. And the biggest of these, "has a W in front of its name." W, that is, as in Wal-Mart, the nation's biggest employer.
Mr. Basham has sponsored a bill to make them, and any corporation with more than 10,000 employees, pay the state back.
What this is really all about is health care. More than half of all full-time Wal-Mart employees, called "associates," have no company-sponsored health care. On average, they make less than $10 an hour. When they have catastrophic illnesses, their only recourse usually is Medicaid, which is funded by state taxpayers.
"According to statistics provided by the Michigan Department of Human Services, just one large Michigan company is costing state taxpayers approximately $46 million annually."
That company, Senator Basham said, was Wal-Mart. Three other large companies are also abusing the system, he said, though he was unable to say which ones they were.
That amounts to welfare for a rich corporation, in his view. "Our public assistance programs exist to assist the poor and disadvantaged, not to subsidize some of the most profitable companies in the world," fumed Mr. Basham.
The 61-year-old senator was himself a Ford worker for 30 years before entering politics. He noted that last year, General Motors Corp. and the Ford Motor Co. lost more than $10 billion between them. Meanwhile, Wal-Mart made $10 billion in profits. Michigan has been having a hard time balancing its budget and many are having a hard time paying their taxes.
Subsidizing Wal-Mart and other big companies like it is ridiculous, the senator says.
So he has introduced legislation (Senate Bill 734) that would give large, profitable companies with more than 10,000 workers a choice. Either they invest at least 8 percent of their payroll into health-care coverage for their employees or they will have to put that amount - or the difference if they invest less than 8 percent - into a new "Fair Share Health Care Fund."
That money would then be used to reimburse the Medicaid costs the big company's uninsured are costing the state.
That sounds like a law that might have some populist appeal - but it is also bitterly controversial. It was denounced by Frank Beckmann, a conservative columnist for the Detroit News.
"Basham's bill would further erode the already unfriendly business climate in Michigan, and could endanger the jobs of some of the 20,000 Wal-Mart workers here," wrote Mr. Beckmann, a former football radio announcer. He added that it would "insert government where it doesn't belong, between a company and its employees."
Mr. Basham brushed off that as "scare tactics." As for jobs fleeing the state, "the companies involved are in retail and services. Unlike manufacturers, the retail and service industry must stay near their local markets." He contends that if Wal-Mart left, another similar retailer would "just step in to assume their place."
Wal-Mart hasn't weighed in on this - publicly at least - perhaps because the company's lobbyists should be well aware that, for the time being at least, they don't have to.
Michigan's state Senate is solidly controlled by the Republicans, who would be certain to vote against Mr. Basham's bill, and in any event, they have refused to even schedule a hearing.
However, the senator says he doesn't intend to quit after this session, no matter what happens. He said as many as nine other states may be considering legislation to go after big companies that push health-care costs back on the states. And a similar bill became law in Maryland last month, when the legislature passed it a second time, overriding Republican Gov. Bob Ehrlich's veto.
Senator Basham is up for re-election this year, but his seat is seen as safely Democratic. If he can't manage to get his "deadbeat corporations" bill through next year, he said he might seriously consider mounting an effort to put it on the statewide ballot in 2008.
Whatever else may happen, it is a good bet that a bill to make "deadbeat corporations" reimburse the state for health-care costs is something Wal-Mart does not want to see on a statewide ballot.
Interestingly, Wal-Mart may be attempting to block such efforts in a different way.
According to the New York Times, the nation's biggest employer is experimenting with a new health-care plan for its workers that will involve a small monthly premium, something important to workers making only $19,000 a year.