Device tax: Repeal efforts claim another Democrat, nay-sayers cry foul

Rep. Bill Owens (D-N.Y.) earlier this month joined a growing cadre of Democrats who have signed their name to a medical device tax repeal bill that’s set to hit the House floor for a vote in coming weeks.

Rep. Erik Paulsen’s (R-Minn.) repeal measure, which is more than a year in the making, aims to kill the 2.3% levy that will affect all U.S. sales of medical devices starting January 2013, raising more than $30 billion over 10 years.

Owens was among the latest to sign his name to the bill, which may get a vote on the House floor as early as this week, but he did so with little fanfare. His office issued no statements, despite the fact that he is 1 of about a dozen House Democrats to cross the aisle and co-sponsor the measure.

Repeal efforts haven’t managed to muster much support from Senate Democrats either. Not a single one has signed on to the companion version of the repeal measure in that chamber.

The conflict surrounding the repeal measure is heightened on both sides by Democrats who don’t want to challenge any aspect of ACA ahead of the Supreme Court ruling and Republicans who want whole-sale repeal of the healthcare reform law rather than a piecemeal approach.

"A lot of my colleagues, including leadership, felt that once we had a vote for repeal [of the Affordable Care Act], that that was adequate, and some of the more conservative members of the House, didn’t want to pick and choose," Paulsen told MassDevice.com in February. "There are some Democratic members who have not signed on to the repeal bill because they’re a little nervous about acknowledging that the healthcare law they may have voted for isn’t perfect."

"They’re more inclined to vote for it if they get the opportunity to vote on the floor, rather than sign their name on it and deal with a sort of push-back among some of their own base," Paulsen added.

The GOP-led effort has at least one opponent in the left-leaning Center on Budget & Policy Priorities, which issued a report earlier this year discounting med-tech industry warnings about the tax as "misinformation and exaggerated claims."

Device makers and advocates have warned that the burden imposed by the impending levy could push jobs overseas, shut down small businesses and hamper innovation.

"Contrary to lobbyists’ talking points, the tax will not cause manufacturers to shift production overseas, since it applies to both imported and domestically produced medical devices, and it exempts U.S. exports," according to the CBPP report. "Nor is the tax likely to have much effect on innovation in the medical device industry; in fact, health reform as a whole may well spur innovation by promoting more cost-effective ways of delivering healthcare."

Repealing the tax would add to the deficit and undercut health reform efforts by encouraging other health industries to fight revenue-raising provisions as well, according to the report.

The political pinball has been heating up ahead of the much-anticipated House vote on the medical device tax repeal measure.

The partisan furor picked up in Massachusetts, home to a large swath of device makers including Boston Scientific (NYSE:BSX) and Abiomed (NSDQ:ABMD), as the National Republican Congressional Committee earlier this month castigated Rep. Niki Tsongas (D-Mass.) over the tax and her "commitment to her party’s limitless spending addiction and job-killing agenda."

The statement appears on the website for Tsongas challenger Tom Weaver (R), who hopes to take the 5th district seat Tsongas has held since 2007.

The political fray in the Bay State got a little murkier last month when Harvard professor and Senate hopeful Elizabeth Warren (D) called for the repeal of the medical device tax in  an exclusive op-ed for MassDevice.com.

Warren’s actions became a launching point for GOPers looking to pressure their across-the-aisle opponents into making a move.

Congressional candidate Richard Tisei (R-Mass.) called on fellow Bay State Rep. Jon Tierney (D-Mass.) to lend his name to the tax repeal bill, calling Tierney’s continued support for the levy "unacceptable" and "a clear example of how Tierney’s economic policies directly hurt the voters" in his district."

"John Tierney is even to the left of Elizabeth Warren on the 2.3% excise tax on medical device manufacturers," Tisei said in prepared remarks. "John Tierney should go talk with the employees of the medical device industry in our district and see what they think of this destructive tax on Massachusetts jobs."