Sens. Klobuchar, Hagan: Delay medical device tax

By Sam Baker - 12/10/12 02:27 PM ET

Sens. Amy Klobuchar (D-Minn.) and Kay Hagan (D-N.C.) on Monday sought to delay a new tax on medical devices, which is part of President Obama's signature healthcare law.

The senators — both from states where the device industry has a large presence — said a delay should be considered as part of larger negotiations surrounding tax reform and the looming "fiscal cliff."

"In an environment focused on increasing exports, promoting small businesses, and growing high-tech manufacturing jobs for the future, we must do all we can to ensure that our country maintains its global leadership position in the medical technology industry and keeps good jobs here at home," Klobuchar and Hagan said in a letter to Senate Majority Leader Harry Reid (D-Nev.).

The tax, set to take effect in 2013, was designed to raise about $20 billion over a decade. But the senators said the new tax threatens an industry that employs more than 400,000 people in the United States.

"With this year quickly drawing to a close, the medical device industry has received little guidance about how to comply with the tax — causing significant uncertainty and confusion for businesses," the wrote. "As we work together to develop a long-term solution to help move our economy forward, reduce our debt and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner."

The Advanced Medical Technology Association (AdvaMed), which represents device makers, praised the senators' effort but said the tax must be fully repealed.

“We appreciate Sen. Klobuchar and Sen. Hagan’s leadership on this issue and also appreciate the broad bipartisan support for preventing the implementation of the device tax which is slated to go into effect Jan. 1," AdvaMed senior executive vice president of government affairs J.C. Scott said. "Delay of the tax is an important step, but Congress must fully address the device tax as it works to develop a long-term solution to help our economy more forward, reduce our debt and reform our tax code.”