Support builds for medical device tax repeal

A bipartisan group of lawmakers predicted Wednesday that the House could repeal ObamaCare’s tax on medical device sales by the end of March.

{mosads}Republicans have pushed to roll back the tax for years, and have insisted for months that would be a top goal if they wrested away full control on Capitol Hill.

The latest effort at repeal, a bill introduced on Tuesday by Rep. Erik Paulsen (R-Minn.), already has the backing of well over half the House — including two dozen Democrats.

“Many of us were saying from the outset this is a very ill-conceived idea,” Paulsen said at a news conference on Wednesday with other repeal supporters. “You’re going to have fewer start-ups, less ideas in the garage.”

Repealing the medical device tax has long had bipartisan support, in large part because several states have large device industries. The U.S. home for device giant Medtronic, for instance, is in Paulsen’s district.

That support from both parties is a major reason that Republicans have eyed scrapping the tax, which K Street has also lobbied extensively to repeal. But some hard-line Republicans seeking to repeal the entire Affordable Care Act aren’t interested in just getting rid of chunks of the law.

In any event, the bipartisan effort to get rid of the 2.3 percent tax on device sales could easily be tripped up if lawmakers can’t find money elsewhere to offset the revenue lost from repeal. The tax raises almost $30 billion over a decade.

Paulsen and Rep. Ron Kind (Wis.), a prominent Democratic opponent of the tax, both said at Wednesday’s news conference that they expected top lawmakers in both parties and both chambers to work to find ways to pay for repeal. The House bill would also allow device companies to seek refunds for taxes already paid under the law.

“The pay-fors are not going to be a problem,” said Paulsen, who, like Kind, is a member of the tax-writing House Ways and Means Committee.

But Paulsen softened that tone a bit after the news conference, insisting “it’ll be up to the leadership to decide” if the legislation is offset. “But we’ve done that in the House before, where we’ve had a pay-for,” Paulsen said.

The House passed a device tax repeal in 2012 that would have offset the costs by recovering subsidy overpayments from the healthcare law.

Sen. Orrin Hatch (R-Utah), the incoming chairman of the Finance Committee, would be one of the lawmakers involved in finding an offset, Paulsen and Kind said. But Hatch told reporters on Wednesday he doesn’t think that’s necessary.

“We’re not looking for offsets,” said Hatch, who called the medical device tax a “stupid dumbass tax” last year.

A spokesman for House Ways and Means Committee Chairman Paul Ryan (R-Wis.) said the panel hadn’t figured out how to proceed on the tax. 

Some Democrats have said that medical device companies won’t be hurt by the tax, because the healthcare law will generate more sales from the industry.

But other Democrats are open to the idea, though they say the costs have to be offset to keep the same funding level for the healthcare law. Almost 80 senators, for instance, voted for a nonbinding repeal proposal in 2013.

The Obama administration has threatened to veto device tax repeals in the past, but would likely have a much easier time vetoing a measure that didn’t have an offset.

“That’s why we’ve stopped short of repealing the medical device tax, because the pay-for has never been determined,” Senate Minority Whip Dick Durbin (D-Ill.) said Wednesday.

Tags Dick Durbin Orrin Hatch Paul Ryan Ron Kind
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