Opponents of a looming 2.3% tax on all U.S. medical device sales aren’t likely to see it repealed this year, despite the medtech industry’s hopes. But repeal could ride on the coat-tails of a much larger bill, if the levy’s opponents can persuade enough Democrats to go along.
The 113th Congress is likely to take up at least 2 major pieces of legislation next year, as the deadline on the $5 trillion "fiscal cliff" approaches. Apart from avoiding a fall off the cliff, Congress could also take a stab at tax reform in 2013.
In this scenario, much depends on the outcome of the November elections in 9 key Senate races:
- Sen. Jeff Bingaman (D-N.M.) is retiring. Rep. Mark Heinrich (D-N.M.) and former Rep. Heather Wilson (R-N.M.) are vying for Bingaman’s seat.
- Sen. Sherrod Brown
(D-Ohio) is battling Republican challenger Josh Mandel, Ohio’s treasurer.
- Sen. Herb Kohl (D-Wis.) is retiring. Rep. Tammy Baldwin (D-Wis.) and ex-governor Tommy Thompson (R) are running to succeed Kohl.
- Sen. Robert Menendez
(D-N.J.) is running against Republican state senator Joseph Kyrillos.
- Sen. Ben Nelson (D-Neb.) is retiring. His office sought by former Sen. Bob Kerrey (D-Neb.) and Republican state senator Deb Fisher.
- Sen. Bill Nelson (D-Fla.) is fighting off a challenge from Rep. Connie Mack IV (R-Fla.).
- Sen. Olympia Snowe (R-Maine) is retiring. A 3-way race is on in the Pine Tree State between state senator Cynthia Dill (D), secretary of state Charles Summers Jr. (R) and independent candidate and ex-governor Angus King
- Sen. Debbie Stabenow (D-Mich.) is fending off a challenge from ex-Rep. Pete Hoekstra (R-Mich.).
- Sen. Jim Webb (D-Va.) is retiring, with former Sen. George Allen (R-Va.) taking on ex-governor Tim Kaine (D).
If the Senate swings to GOP control in 2013, the landscape for repeal would become much more hospitable, with the key Senate leaders who were the architects of the medical device tax and the Affordable Care Act (Finance Committee chairman Sen. Max Baucus (D-Mont.) and Sen. Harry Reid (D-Nev.), the majority leader) stripped of their leadership roles.
If President Barack Obama holds on to the Oval Office, the picture is more nuanced. Although the White House has promised to veto a stand-alone repeal bill, there’s an outside chance that the industry’s allies on Capitol Hill could get a repeal effort folded into a larger discussion on tax reform or even the looming fiscal cliff legislation. Obama said in no uncertain terms during last night’s final presidential debate that military cuts scheduled to take place in 2013 would not happen. Does this mean he’ll propose a grand bargain to keep the nation from running over the fiscal cliff? If so, the opportunity for repeal efforts to be rolled in might come sooner than later.
If Republican Mitt Romney ousts Obama from the White House, a concerted effort to kill off as much of Obamacare as possible, with the medtech tax a likely target, will be on the table. However, there will most certainly be a lull as he puts his cabinet together and works his way through the transition period. And the GOP is probably unlikely to do any serious horse trading before it gets a chance at power.
Here’s a look at some potential yea votes for repeal among Senate Democrats:
- Sen. Michael Bennet (D-Colo): Colorado has a small but significant medical device cluster.
- Sen. Thomas Carper (D-Del.): As does Delaware, where Carper is facing a challenge from Republican businessman Kevin Wade.
- Sen. Robert Casey (D-Pa.): Pennsylvania also enjoys a dense medtech scene.
- Sen. Dick Durbin (D-Ill.): As assistant majority leader, could have serious mojo if the Dems keep control of the Senate; layoffs in adjacent states are said to have piqued his concern.
- Sen. Al Franken (D-Minn.): Minnesota might be med-tech’s global epicenter; Franken has repeatedly said he could get behind a repeal if it’s paid for with other cuts.
- Sen. Kirsten Gillibrand (D-N.Y.): Facing a challenge from attorney Wendy Long (R) and at least 1 Empire State employer blaming the tax for layoffs, Gillibrand could be a yes vote if she wins another term.
- Sen. Kay Hagan (D-N.C.): Has said she’d support a repeal bid if it was offset by other cuts.
- Sen. John Kerry (D-Mass.): The Bay Stater could be in line for Secretary of State in a new Obama administration, but Massachusetts is a huge hub for the medical device industry.
- Sen. Debbie Stabenow (D-Mich.): Stabenow’s a natural to lead the repeal charge, as she’s in a tight race against former Rep. Pete Hoekstra (R) in the state with the largest medtech sector in the U.S.
- Sen. Bill Nelson (D-Fla.): The tax is a factor in Nelson’s race against Rep. Connie Mack IV (R-Fla.).
- Sen. Chuck Schumer (D-N.Y.): The layoffs at Welch Allyn have surely gotten Schumer’s attention.
- Sen. Jeanne Shaheen (D-N.H.): New Hampshire is right next door to Massachusetts.