a staffer from Max Baucus's Office passed this on to me re: the Medical Device Tax and it's repeal...both Max and Jon Tester voted against the repeal.
Updated March 22, 2013, 6:10 p.m. ET
Medical-Device Tax Repeal Faces Uphill Climb in Senate
By KRISTINA PETERSON And CHRISTOPHER WEAVER
WASHINGTON-The push to repeal the 2010 federal health-care law's tax on medical devices got a boost in the Senate this week, but the search to replace the nearly $30 billion the levy provided to fund other parts of the law will impede efforts to unwind it.
Intense lobbying from the medical-device industry helped nudge the Senate to vote 79-20 Thursday night to repeal the 2.3% tax on sales of pacemakers, surgical tools and a swath of other devices. Strikingly, 34 lawmakers who caucus with the Democrats signed onto the repeal, including many who created the tax by voting for the 2010 Affordable Care Act.
Democrats who supported the amendment said Friday that they would need to find a way to generate the same amount of revenue before they would vote to pass it into law.
"We need to look at where we can replace the revenue from," said Sen. Jeanne Shaheen (D., N.H.), who voted for the amendment out of concern the tax is preventing the companies from hiring new workers. The amendment approved Thursday night specified the tax should be repealed without increasing the federal budget deficit.
Earlier this week, Rep. Dan Maffei (D., N.Y.) introduced legislation that would offset the tax by cutting subsidies for oil and gas companies. Sen. Lamar Alexander (R., Tenn.) proposed an amendment that would pay for it by cutting wind-power tax credits. There is no sign those offsets have broader support in Congress, and a Senate Democratic aide said reaching a final agreement on a way to pay for the repeal was unlikely.
Because Thursday's measure was an amendment to the Senate Democrats' budget-a partisan blueprint that stands little chance of passing the GOP-led House-the vote to repeal the tax was largely symbolic. Lawmakers are unlikely to bring forward the measure as a stand-alone bill on the Senate floor and will push instead to have it considered in broader discussions to overhaul the tax code and reduce the deficit, a Democratic Senate aide said.
"It's just a way of opposing health care," Sen. Sherrod Brown (D., Ohio) said of the amendment he voted against. He lamented that "a very effective lobby .got a whole bunch of my colleagues in both parties" to support the measure.
Device makers on Friday viewed the wide bipartisan support for the repeal as a signal that their three-year effort to repeal the tax could succeed.
"There's still a long ways to go, but it shows strong support," said Stephen Ferguson, chairman of Cook Group Inc., a closely held device maker with 11,000 employees based in Bloomington, Ind., that has actively opposed the tax. Mr. Ferguson said the firm has suspended plans to build five mid-Western factories because of the tax.
Since the tax took effect Jan. 1, the device industry has paid $388 million in excise taxes, collected by the Internal Revenue Service in bimonthly installments, according to AdvaMed, an industry group. The nonpartisan Congressional Budget Office projects it will raise just under $30 billion over a decade to fund the health law.
Medtronic, MDT +0.37% the nation's largest device maker, said in a statement it applauded efforts to repeal the tax, but recognizes it is an uphill battle. The Minneapolis-based maker of heart implants, stents and diabetes-care equipment expects to pay up to $175 million per year in excise tax.
The tax-a 2.3% excise tax on all U.S. sales-covers medical equipment ranging from implantable pacemakers and hips to health-care machinery such as MRI machines and infusion pumps, as well as the plastic tubing, surgical tools and other supplies that stock hospital shelves.
Device manufacturers have argued the tax is unfair because they will not gain enough new customers from the health-care overhaul to offset their new costs. Other health-care sectors counter that the burden of paying for the health-care law should be evenly distributed and that they have already made financial sacrifices.
Write to Kristina Peterson at [email protected]
and Christopher Weaver at [email protected]
Brianne Rogers Dugan
Deputy State Director
Senator Max Baucus
220 W Lamme Street, Suite 1D
Bozeman, MT 59715