U.S. House passes repeal of medical device tax

Rep. Erik Paulsen
Rep. Erik Paulsen

WASHINGTON — A longtime goal of some Minnesota members of Congress is one step closer to becoming reality: on Thursday, the House of Representatives voted 280 to 140 to repeal the tax on medical devices included in the Affordable Care Act. (That’s one vote short of it being veto-proof.)

The law, titled the Protect Medical Innovation Act, has been introduced before by 3rd District Rep. Erik Paulsen, passing the House once before but failing to move through the Senate. Now that the Senate is controlled by Republicans, however, the tax repeal’s chances look better than ever.

All members of the Minnesota delegation have, at some point, voiced opposition to the medical device tax. Minnesota, along with New York, Massachusetts, and California, is home to many companies that manufacture medical devices. Repealing the tax would undoubtedly ease the tax burden of some major Minnesota businesses to some degree. A stumbling block for the law has been the so-called pay-for: offsetting the $24.4 billion the tax would raise over 10 years with other revenue or savings.

Paulsen’s bill offers no such pay-for. For that reason, Reps. Keith Ellison and Betty McCollum voted against it. In a statement, McCollum said the repeal will add to the deficit. “My goal is to eliminate this tax so that the medical device industry can thrive and all hard-working Americans can benefit from the improvements in health care that industry creates,” she said. “However, we must find a responsible offset that does not further increase our nation’s deficit.”

1st District Rep. Tim Walz — who joined Reps. Rick Nolan and Collin Peterson in voting for the repeal — sat in a chair on the House floor and talked with McCollum about the vote. Afterward, Walz said that McCollum’s argument on the deficit was fair, but he stressed that the current legislation makes sense and is necessary progress.

The bill will now head to the Senate, where it has stalled before. There, as in the House, parties haven’t been able to come to an agreement about the pay-for. Democrats like Al Franken and Amy Klobuchar support the tax repeal but are adamant that the money be accounted for elsewhere. Klobuchar said on Thursday she is “continuing to work on options” for an offset. Whenever that is finished, Franken, Klobuchar, and other Democrats will likely push for that during debate in the Senate.

The other side of the aisle won’t greet it with much enthusiasm. Several GOP senators argue that cutting the tax pays for itself because it will stimulate additional economic activity. And beyond that, the idea of raising other revenue to account for the tax conflicts with their overall goal of reducing taxes.

Regardless, at least for today, Paulsen was all smiles. The pay-for “wasn’t a hang-up in the House and it won’t be a hang-up in the Senate whatsoever,” he said. About its chances in the Senate, he said he was “very optimistic,” and said a veto-proof majority might even be possible. “It’s a good day to get innovation in America back on track,” he said.

Comments (8)

  1. Submitted by Dennis Tester on 06/18/2015 - 06:55 pm.

    Betty’s priorities are clear

    “My goal is to eliminate this tax so that the medical device industry can thrive and all hard-working Americans can benefit from the improvements in health care that industry creates,” she said.

    However, federal tax revenue has a higher priority with Betty.

    • Submitted by richard owens on 06/19/2015 - 10:29 am.

      Betty also said:

      “However, we must find a responsible offset that does not further increase our nation’s deficit.”
      I think you are arguing both sides. Republicans preach debt doom whenever it suits them.

      btw, Did you notice the loyalty of Medtronic to the country that incubated it, the country that tests and approves its products and the country that holds limitless court proceedings to settle all the legal problems they stir up between competitors and defective product liability suits?

      Did you consider the huge number of new sales these device makers received by virtue of the ACA itself?

      You ought to look into the ethical practices of these device makers, the graft and corruption they have caused buying off doctors and using salesmen as surgeons.

      The money was a revenue component of the ACA and needs to be replaced (or better yet, sustained).

      Rep. McCullom perhaps deserves an apology for falsely accusing her.

      Erik Paulson is the top recipient of campaign money from the medical device industry.

      [MinnPost 2013]

      “Medical device industry contributions 2012

      Top 20 members of the House
      Rank Candidate Amount
      1 Paulsen, Erik (R-MN) $113,350
      2 Camp, Dave (R-MI) $77,400
      3 Boehner, John (R-OH) $74,750
      4 Upton, Fred (R-MI) $63,000
      5 Matheson, Jim (D-UT) $61,246
      6 Donnelly, Joe (D-IN) $50,421
      7 Bilbray, Brian P (R-CA) $45,500
      8 Dold, Robert (R-IL) $44,250
      9 Boustany, Charles W Jr (R-LA) $42,055
      10 Pitts, Joe (R-PA) $40,750

  2. Submitted by joe smith on 06/18/2015 - 07:21 pm.

    I guess this was one of “goodies” that Pelosi was talking about when she said we have to pass the law to find out all the “goodies” hidden in it. I argued this was just another money making tactic for law makers to get their greedy hands on more of our dollars. It never made sense but our Democratic friends jammed it thru along with other mandates that grew Govt.

  3. Submitted by ALAN BELISLE on 06/19/2015 - 09:05 am.

    How much?

    Isn’t it interesting that Eric Paulsen was so opposed to a measly 2.4% tax that would have funded much of the ACA? Anything to do with the nearly $100,000 in campaign contributions from the medical supply lobbyists? Finest government money can buy.

  4. Submitted by Steve Titterud on 06/19/2015 - 09:49 am.

    Campaign contributions PAY, BIG TIME !!! The ROI is…

    …incomparable – you can’t get this kind of ROI with any other kind of investment. And the price is so low !!

    Let’s not call this outright corruption or political bribery. That makes everyone uncomfortable.

    So let’s call it the American Dream, let’s call it What Makes America Great:

    You too can own your own Congressmen and Senators !!

  5. Submitted by Hiram Foster on 06/19/2015 - 12:35 pm.

    Tax

    I never understood the desire to repeal this tax. It seems to me the medical device manufacturers are exactly the people we should tax in order to pay for health care.

  6. Submitted by Eric Ferguson on 06/19/2015 - 03:07 pm.

    What’s EriK Paulsen going to do

    when the tax is gone? It’s his only issue!

    But I am disappointed with Minnesota’s congressional delegation in general. This might be Minnesota’s special interest, but it’s still a special interest tax break and it’s shameful. Other medical industries agreed to pay in, but the device industry thinks the rules don’t apply to them.

    • Submitted by Ted Hathaway on 06/22/2015 - 06:37 am.

      RE: What’s Erik Paulsen going to do

      Either back to advocating for a balanced budget amendment – something he did a few years back – or keep working on his inevitable post-Congressman career: Lobbyist. Probably for the medical device industry.

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