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CNN Live Sunday

Wal-Mart Memo Sparks Controversy; Rosa Parks First Woman To Lie In Honor In Capitol Building

Aired October 30, 2005 - 18:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL LIN, CNN ANCHOR: Welcome back. I'm Carol Lin. Here is a quick look at what's happening now in the news. The late civil rights heroine Rosa Parks is receiving a final tribute -- live pictures -- as you can see her motorcade making its way from Baltimore to the nation's Capitol where she where she is going to lie in honor in the Rotunda in Washington.
She initiated a bus boycott in Montgomery, Alabama in 1955 that sparked the movement to end racial segregation. We're going to have special coverage of those attending in the Rotunda to pay their last respects, including President Bush.

Now, after battering the Colombian island of Providencia with Hurricane force and leaving the damage you see here, Hurricane Beta has weakened to a tropical storm. High winds and heavy rains are sweeping Nicaragua and eastern Honduras right now. Residents are warned to beware of flash floods and mud slides.

LIN: President Bush is getting advice as he chooses a new Supreme Court justice nominee. Republicans are lobbying for a solid conservative with a track record as a judge. Democrats want a consensus candidate.

Shops in New Delhi, India, are cleaning up and reopening after yesterday's deadly terror bombing as police try to track down the perpetrators. A caller to the news agency claimed an Islamic militant group set off the explosions that killed at least 59 people and wounded more than 200.

LIN: Plenty of hot topics coming to the front burner for the Bush administration including possible nominees to fill the void left by Harriet Miers' failed Supreme Court bid. Our Carlos Watson joins us with his fresh take from New York tonight. Carlos, good to see you.

CARLOS WATSON, CNN POLITICAL ANALYST: Good to see you.

LIN: We've got a short list. We're hearing a buzz that President Bush, it may seem unlikely, but we're hearing he may make a Supreme Court nominee as soon as tonight. What are you hearing?

WATSON: I think there's no doubt that the Bush White House has settled on a candidate. I don't think we'll hear an announcement tonight. I think instead they would rather use tomorrow's announcement or some time early in the week to turn the page and to make sure the story going forward isn't as much about the scandal last week including "Scooter" Libby but rather looks forward.

I think their ultimate hope is to do three things, Carol, by choosing an obvious conservative. One is to turn the page, as I said, media wise, two is frankly to pick a fight with Democrats instead of Republicans fighting with each other, they're fighting against the other party. And last but not least to get what I call a "Classic Coke bounce", meaning when you mess up with new Coke, you come back to Classic Coke and you hope that you pick up a few points in polls.

LIN: Who are the candidates for Classic Coke or the Supreme Court, whichever the case may be?

WATSON: If you want to think about it as Classic Coke, think about someone like Samuel Lido (ph), a judge on the 3rd circuit, a federal judge, former prosecutor in New Jersey, someone originally appointed by President Bush's father in 1990. That's someone who conservatives think of as an obvious conservative. But remember the last time around before Harriet Miers was announced, everybody was certain it was one of the judges from the 5th circuit, one of the ediths (ph) as they're called. In turn, that wasn't the case. A couple, if you will, sub plots to think about, one, how much of a role will gender play in this? Will he select another woman or will he choose a man? Number two, how much will religion play in this? Not just Christianity versus another religion, but within Christianity will he choose a fifth Catholic to serve on the court or choose a Protestant and answer some of the social conservative critique?

LIN: And you think that that's actually going to be pretty controversial.

WATSON: I think quietly it could be, because remember the people who felt most strongly about Harriet Miers, in some way were those on the right who had been looking towards the nomination of someone who could serve for 25 years. If you include Justice Kennedy, Justice Thomas, Justice, Scalia and now Justice Roberts, four of the members on the court are Catholic. And these folks on the right are certainly hoping, at least some of them are, that a Protestant might be named and a very conservative Protestant at that.

LIN: We'll see what happens. Hey, Carlos, I want to do a fresh take follow here. Because a while ago you said that 2005 was going to be a turning point in health care and just this past week, you heard about the Wal-mart memo, right, the controversy over how they were going to distribute health benefits and to whom and whether they were going to be discriminating in the people that they hire -- this obviously a big issue for corporate America.

WATSON: No two ways about it, Carol. We said early in the year watch 2005. Even though there was not an election this year, this could finally be the year in which all we talked about health care, major change for more than 50 years, this could be the year that we see change galvanized because costs are so high, that not only the heads of states, namely governors, but also heads of corporations like Wal-mart, like Starbucks, like Delta, like General Motors, are starting to say that costs are out of hand. And so stay tuned over the next 18 months. I won't be surprised not only to see 2008 presidential contenders offering up major new Hillary-care like health plans but I wouldn't be surprised to see something major coming forth from the Bush administration given that the pressure isn't on from just consumer groups but from corporations, as well.

LIN: Right. And you have been saying, too, that President Bush needs to get a win, right. He needs to figure out a way to dig himself out of these public opinion polls after the "Scooter" Libby, CIA leak scandal and the failure of Harriet Miers. So maybe health care would be it. But you're not suggesting that he would actually proposal a national health care plan, per se.

WATSON: Yes, I wouldn't be surprised to see --

LIN: Really? Guaranteed health care? Guaranteed health care?

WATSON: When I say national plan, I don't essentially equate a national plan with guaranteed health care. But after the 2006 election, if it ends up being as big an issue as I think, I think President Bush could end up using his final two years to make a surprise in the same way that a Nixon goes to China, and in the same way that a Clinton signs welfare reform. I wouldn't be surprised to see President Bush with CEOs in his office saying this is a big business issue not just a health issue or moral issue. You saw Howard Schultz, the CEO of Starbucks say, "I spend more on health care than I do on coffee beans." I think that could clearly drive President Bush in an unexpected direction.

LIN: We'll see what happens. Carlos, thank you.

WATSON: Good to join you.

LIN: You too.

News across America right now. CNN affiliate KNBC in Kansas City, Missouri, reports AMC theaters are replacing some movie posters of rap star "50 Cents" The activists say the posters for the movie "Get Rich or Die Tryin" give young people a negative message. One poster shows the rap star holding a child with a gun in his pocket. Another shows him holding a gun and a microphone.

All subway bus and trolley service in Philadelphia could come to a screeching halt tomorrow morning. The transit workers' union is threatening to strike if its labor dispute isn't resolved by midnight tonight. The union wants to change some of its health care contributions and disciplinary rules. Negotiations are ongoing. We'll keep you posted.

Runners ruled the streets today in northern Virginia and Washington, D.C. It was the 30th annual Marine Corps marathon. And this year, 30,000 runners took part. That's almost double the number from the past years. An impressive showing considering the course is 26 miles -- 26.2 exactly, but not exactly a Sunday fun run.

LIN: All right. It's something you were never meant to see. But now that the Wal-mart memo is out, many are outraged. And remembering Rosa Parks. The nation mourns and pays tribute to her extraordinary life. We have continuing live coverage of this.

Wal-mart, the largest retailer may be facing an equally large PR problem. An internal memo that was leaked to the public spells out several company proposals to lower employee health care costs. Those proposals, critics say, reveal Wal-mart is much more concerned about its profits than its people. CNN's Adaora Udoji has more.

(BEGIN VIDEOTAPE)

ADAORA UDOJI, CNN CORRESPONDENT, CNN (voice over): The sometimes controversial megastore chain Wal-mart prides itself on family values. But critics charge an internal company memo, one you were never meant to see, shows the nation's largest private employer caring more about its public relation woes and its profits than its 1 million plus employees.

TRACY SEFL, WAL-MART WATCH: What this memo reveals is that there's essentially nothing more than rampant corporate greed that moves their every move.

UDOJI: The memo about health care costs and other benefits, which the company says was a draft, was leaked to a watchdog group critical of Wal-mart. In the document a Wal-mart executive says, quote "Our workers are getting sicker than the national population, particularly in obesity related diseases". "Health care to the tune of 1.5 billion the past three years is a major reason for rapidly rising benefit costs," it says. Among several solutions is to hold it down, the executive writes, quote "Given the significant savings from even a small improvement in the health of our associate base, Wal-mart should seek to attract a healthier workforce, to design all jobs to include some physical activity as well as better informing their work force." Does that mean Wal-mart wants younger and more able-bodied employees? The memo's author says no.

SUSAN CHAMBERS, EXECUTIVE VICE PRESIDENT, WAL-MART: We are very interested in encouraging more healthy lifestyle choices, if you will. As an employer, we believe the way we can best do that is providing better information, raising awareness and certainly offering choices that make for healthy lifestyles.

UDOJI (on camera): Wal-mart benefit executive Susan Chambers say the company already offers roughly 18 different health plans to employees across the country in 3,600 stores which they're trying to improve. In response to the leak, the company released its own official copy of the memo. But critics point out as the company's memo does, that nearly half of employee's children does do not have medical insurance or are covered by taxpayer welfare dollars. Another concern is spousal coverage. It's expensive and the company wants to minimize it. Wal-mart pulled in over $10 billion in profits last year. So critics say it can do more for the people who helped get them there.

SEFL: They can stand to pay more for their health benefits. But instead, they're trying to cut corners. And they're doing it on the backs of the lowest paid workers. UDOJI: Wal-mart maintained it's grappling with complex health issues with both their employees and the company's interest in mind. Critics say it is not what Wal-mart says but what the company does and they're not convinced it's enough.

Adaora Udoji, CNN, New York.

(END VIDEOTAPE)

LIN: So joining me from Washington to delve a little deeper into this debate, Andrew Grossman, the executive director of the group Wal- mart Watch. And Michael Cannon, director of health policy studies at the Cato institute. Welcome to both of you. Andrew, let me start with you. You actually say that Wal-mart is not a social welfare agency. What do you mean by that? Don't they have a responsibility to their more than million employees?

ANDREW GROSSMAN, EXECUTIVE DIRECTOR, WALMART WATCH: We think that Wal-mart does have a responsibility to its 1.3 million employees. More importantly than that, Sam Walton used to say that if you treat your employees like family you'll get more out of them. You'll get better service and that's better for the customer. Geez, making older women and disabled employees push shopping carts is not really treating somebody like a member of the family. And we think that Wal- mart can and should do better and they'll be better off as a company if they do.

LIN: Andrew, my mistake, it was Michael who said that. Obviously, Michael, you're with the Cato Institute. You say that it's not a social welfare agency. Doesn't a company that hires the number of employees that could fill a major metropolitan city, doesn't that company owe something to its employees?

MICHAEL CANNON, CATO INSTITUTE: Well, it owes them the terms of the contract that it set with them. Look, Wal-mart is not the problem here. The problem here is health care costs are rising uncontrollably. All companies are facing that same problem. Now, I think Wal-mart probably deserves some criticism for some of the choices that -- decisions that it's made. But I think that a lot of critics fail to see all the good things that Wal-mart is doing to improve health care in this country. And in fact they're doing a lot more than its critics are doing to improve health care.

GROSSMAN: The interesting thing is from Michael's point is that we as taxpayers pick up an enormous amount of Wal-mart associate health care. Just by the numbers alone from their own memo, we estimate that it's half a billion dollars a year that Wal-mart profits off of taxpayers by having the taxpayers pay for their employees --

LIN: Because most of the employees qualify for Medicaid. Let me ask you this, Michael. Michael, when the memo says something about hiring -- you know, they want to practice something in their hiring practices to attract healthier associates, doesn't that imply discrimination, that they're going to go for the skinny, healthy runner over the overweight you know, secretarial candidate? CANNON: Absolutely. That implies discrimination. I think that's a natural consequence of the expectation that we all have that employers are supposed to provide health insurance for people. That's a characteristic of our system that wasn't created by Wal-mart. And if you want to know who the culprits are there, the trail of bread crumbs leads all the way to Washington, D.C. That's a creation of the federal government. And as long as employers are --

LIN: What are you saying? Wait a second. What are you saying? I mean, if Wal-mart is saying we want to attract healthier associates meaning we want to hire healthier people, that could imply younger, that could imply thinner.

CANNON: Well, what I'm saying is that as long as any company is operating under these incentives where the firm is expected to provide health benefits, then the firm has an incentive to try to discriminate along those lines. I don't think that it made any sense for the government to create this employer-based health care system because going to end up with exactly those kind of incentives and we'll have employers making really unpopular decisions like this when employees, workers, individuals should be the ones controlling their own health care.

LIN: Andrew, shouldn't a company have the right to hire employees that are going to serve them better over a longer period of time?

GROSSMAN: The question at the table is does Wal-mart make the case that somebody who has worked there for a longer period of time cost them more money and so therefore they don't want them? So the Wal-mart employee who has been there for five or six or seven years is not somebody who Wal-mart wants. I as a customer would prefer that somebody who is familiar with the products in the stores can show me around, that person's going to be a better servant -- will serve me better when I go into the store. I'm a little bit surprised that Wal- mart doesn't want the employee who knows the customers, who knows where the products are, to be there.

And in fact I can't imagine that there is some sort of economic effect that shows that that person actually makes them more money by being a good customer service representative.

LIN: But the sad thing is, but Andrew, the sad thing is, that people go to Wal-mart not for the service, but for the prices and as long as a big company like that can keep prices down, that's why people are going to go and that's something that works against you there.

GROSSMAN: Our job at Wal-mart watch is to awaken people to the fact that Wal-mart employees make less than the federal poverty line and don't use taxpayer funded health care.

LIN: Understood.

Andrew Grossman, thank you very much, with Wal-mart Watch. Michael Cannon with the Cato institute. Good to have both of you. CANNON: Thank you.

GROSSMAN: Thanks, Carol.

LIN: I want to introduce our viewers to an esteemed guest sitting next to me is the Reverend Joseph Lowery. He's the founder of the Southern Christian Leadership. He knows Rosa Parks very well and knows what a special day this is to have this great woman lie in honor at the nation's Capitol. He's going to be joining me for this discussion and a tribute in just a moment.

LIN: A live picture of the Capitol Rotunda where Rosa Parks will be lying in honor starting in the next hour as her body makes its way to the nation's Capitol from the airport. Welcome back. I'm Carol Lin. This is our special coverage of this event. An historic one to say the least. Joining me right now is someone who worked with Rosa Parks in the turbulent years of the civil rights movement, who remembers her well. Reverend Joseph Lowery co-founded the Southern Conference with Dr. Martin Luther King, Jr. He was at her service in Alabama today. He joins me on set right now. What was that like today?

REVEREND JOSEPH LOWERY, CIVIL RIGHTS ACTIVIST: Very moving ceremony. Long. And sometimes too quiet. But very moving. I think the nation's reverent observance of her passing is healthy.

LIN: And the perspective to see someone like Secretary of State Condoleezza rice go up there and say that she would not be Secretary of State today if it wasn't for Rosa Parks. The impact she had.

LOWERY: I enjoyed the tribute and I reminded her that her tribute would be even more forceful if she joined us in extending Rosa's work like extending the voting rights act provisions that are about to expire in a couple of years.

LIN: You can remind her of that.

LOWERY: Well, I did. She committed her herself. I want to say publicly on the record she committed to help us get the voting rights act extended. I hope she doesn't fall for the little trick that they're playing about making it apply to all the states in the nation instead of those that are now.

LIN: Let's talk about Rosa parks.

LOWERY: Good.

LIN: She was 41, 42 years old on that fateful day in 1955 when she was supposed to, according to the Jim Crow laws, give up her seat for this white man who got on the bus. She made a choice. When you first met Rosa Parks, what was your first impression of her? Was she a rabble-rouser, someone who would take politics by the fists?

LOWERY: She was an activist but she was not an a rabble-rouser. What do they say, -- still waters ran deep, she ran deep. She was very committed to putting an end to segregation and to making a strong witness for civil rights and racial justice. But when I was called, I was in Mobile, Alabama, leading the movement in Mobile while Martin and Ralph (ph) were in Montgomery. When they called me and told me that the boycott was on, that who had triggered it, I said I didn't believe it was Rosa Parks. We had a little mild mannered lady secretary of NAC that said yes. But God moves in mysterious ways and He uses people sometimes we don't expect to be used in that way. Only god could have chosen a person with such a gentle voice and a quiet whisper to translate it into a global revolution.

LIN: When we look at these black and white photos of her being fingerprinted after her arrest, there is a look of peace on her face, would you say?

LOWERY: Yes, she said over and over again that while she may have been physically tired, she was simply tired of being pushed around. She was tired of being asked to move back and give someone a seat because of his color. And both of them had paid the same fare and had the same right. And she was very courageous because it may be difficult to perceive now, but she risked her life. She very well could have been dragged off that bus and lynched. She could have been beaten brutally by police officers. She could have been beaten by other passengers on the bus. It was a very, very courageous act.

LIN: And something about her presence perhaps that saved her and allowed her to make history. Reverend you'll be with me as we go into our special coverage of her laying in honor at the Capitol Rotunda. We're waiting for her motorcade to arrive at the Capitol Rotunda. President Bush is waiting for her as well. Getting ready to lay a wreath in her honor. We have much more ahead on CNN. Coming up at 7 Eastern, in just a couple minutes, one woman's fight for her life in a burn unit. But the attack could have been prevented. Her family speaks out. At 8:00, "CNN Presents" reasonable doubt. Can crime labs be trusted. Serious flaws raise doubts about some evidence. And at 9 o'clock Eastern "Larry King Weekend". And Larry's guest tonight is country's superstar Wynnona Judd. I'll have today's top stories right after a short break.

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