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U.S. House passes repeal of medical device tax

A longtime goal of some Minnesota members of Congress is one step closer to becoming reality.

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.”

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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.