Transcript: Wal-Mart's Health Care Scare

This is a partial transcript from "Your World with Neil Cavuto," January 16, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Did you hear what just happened to Wal-Mart (WMT)? Lawmakers in Maryland voting to force any company that employs more than 10,000 folks in the state to spend at least 8 percent of its payroll on health care.

Now, Steve Forbes says, watch out; this could be a sign of bad things to come for corporate America — Steve, of course, the president and CEO of Forbes Inc, and, of course, star of "Forbes on FOX."

Worried?

STEVE FORBES, PRESIDENT & CEO, FORBES INC.: Very worried. I think it sets a bad precedent. Make no mistake. That 10,000 number is just the beginning. Soon, it would go down to 1,000, then 100.

It's a way to get socialized medicine. They couldn't do it 12 years ago with Hillary care. Now they are going to try to do it by going after Wal-Mart, and then using that as the horse to bring it to the rest of us.

CAVUTO: In other words, states that are hurting for money, just go to the companies to get the money?

FORBES: Sure. And it's a great thing.

You want to bridge to where nowhere, force Wal-Mart to do it. And it's a way, again, of getting nationalized medicine. You can't do it directly, do it indirectly by mandates to employers, say, you foot the bill; you have to do it, or we are going to take the money from you.

CAVUTO: I guess my bigger concern with this — and I don't care what people's position is on Wal-Mart: a lot of people love it, a lot of people hate it — is when a government steps in and starts telling a company what it should do and how it should allocate its funds.

That, to me, was the more worrisome sign.

FORBES: It is.

And, again, Wal-Mart is just the beginning. If they can get away with Wal-Mart, figuring they have tarred the country, besmirched its reputation, then, they can say, well, if it's 10,000, what about other big companies? What about IBM? Look what it did on pensions. It's a way of telling companies what they have to do. It's a way of destroying businesses, destroying jobs.

All you have to do, Neil, is look at Europe — twice the unemployment rate here — virtually no job creation in many of those countries, like Germany and France and the private sector. That's the path Maryland is headed on. We have got to make sure it doesn't happen to the rest of the country.

CAVUTO: Those who argue for this, Steve, have said that, if there can be a partnership between business and government, akin to what Maryland, I guess, was trying to do here, that's good.

FORBES: It's more like a Tony Soprano partnership. You know, you do it or we break your kneecaps.

(LAUGHTER)

CAVUTO: So, you don't buy that this is sort of a quasi-public-private type of a joint agreement?

FORBES: Oh, no, not at all. Wal-Mart, as a matter of fact, have been making great strides on health care, including health savings account.

CAVUTO: In fact, they just missed that 8 percent figure. It was, what, 7.85 percent, or whatever, right?

FORBES: Well, they will find a way to get them anyway.

CAVUTO: Right.

FORBES: And Wal-Mart has health savings accounts, up to $1,000. And that's the way to go. Give the money to the worker.

Let them decide how the money is going to be spent, not bureaucrats. That just means out-of-control costs. You just look what happened to laser surgery on eyes, not covered by insurance, cost one-third of what it did 10 years ago. With health savings account. By putting the consumer in charge, we can get real productivity in health care, instead of these spiraling costs.

CAVUTO: But what is the issue? Is it for states and municipalities that are out of dough? They have projects they want to finance, health benefits they want to provide, whatever else they want to do. If they can't do it, they will force it on companies to do it?

FORBES: They will force it on companies, and not reform the system.

The problem with the system is, no one is in charge of it. The costs are all third-party. So, you don't get market forces working to get productivity, as you do with the rest of the economy. So, they are taking it out first on Wal-Mart and then on everyone else. Reform the way health care is paid for in this country. Put the consumer in charge. And guess what? You will see productivity, and an area that consumes dollars is going to be a huge source of future economic growth.

CAVUTO: But, in the meantime, as Maryland goes, you fear, so go a lot of other states on this...

(CROSSTALK)

FORBES: There is going to be a real push for it. It will be an issue in the elections this November, in 2008.

One thing Wal-Mart should do is pull that distribution center they were going to build in Maryland, 800 jobs, and say, hey, let's go to Delaware or Virginia, a place that is more friendly to business. Send a message. These things have consequences.

CAVUTO: All right. Steve Forbes, thank you very much.

FORBES: Thank you, Neil.

CAVUTO: Good seeing you again.

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