Republicans are ramping up for a fresh fight against Obamacare in the new year, banking on Democratic support to repeal a key component of the law.
Republicans have slowed their anti-Obamacare drumbeat in recent months, with their success in the midterm elections, President Obama’s executive action on immigration, government funding and end-of-year business dominating the GOP agenda.
But come early 2015, Republicans will restart their push to repeal the 2.3 percent tax on medical devices that kicked in last year as part of the Affordable Care Act. And with the GOP controlling both chambers of Congress in January — and with several Democrats also calling for an end to the tax — Republicans believe such a move can be a meaningful first step in dismantling Obamacare.
“The [Republican] agenda for next year will likely have low-hanging fruit — the low-hanging bipartisan issues that Republicans can begin to rack up successes in both House and Senate. And one of the first pieces will be the Medical Device Repeal Act,” said Ron Bonjean, a Republican strategist.
“Obamacare will be back front and center when they bring up the Medical Device Repeal Act.”
The medical device tax, which applies to a broad range of products — from pacemakers and dental instruments to surgical gloves — is one of several taxes built into the Affordable Care Act to help pay for the reforms. So instead of legislation aimed at undoing Obamacare in one big swoop, a GOP-led repeal of the tax is aimed at starving the healthcare law of $30 billion over 10 years.
Rep. Erik Paulsen, R-Minn., who sponsored legislation to repeal the tax this year and who expects to reintroduce his bill again in early 2015, said it makes tactical and strategic sense to destroy Obamacare piece by piece — and to focus first on provisions of the law unpopular with many Democrats.
“The medical device tax is one of those things where we can show that we can govern and pass something early on in the session and move it forward,” he said. “We’re looking for the best opportunities to garner bipartisan support to show that we can start to chip away at it.
“Republicans have a history and a reputation of just voting no, no, no, and this is an opportunity to really repeal one of the really bad provisions of the law [and] start replacing it with provisions that are actually going to lower healthcare costs and move in a better direction.”
Paulsen’s measure to repeal the tax this year had about 275 cosponsors in the 435-member House, including 46 Democrats. It passed in September as part of a large jobs package but died in the Democratic-controlled Senate.
Sen. Orrin Hatch also has pushed for the tax repeal in recent years. But with the Utah Republican set to become chairman of the Senate Finance Committee when the party takes control of the chamber in 2015, backers of the measure are confident it will clear both chambers.
While a presidential veto is almost certain, some tax repeal supports say it’s possible enough Democrat support could be had to override a veto.
“That seems unlikely, but in an atmosphere where we’re trying to get a bipartisan bill built, it very well might happen,” Bonjean said.
Senate Democrats from states with a large number of medical device companies, including Minnesota and Massachusetts, have been particularly vocal about their opposition to the tax.
“Senators have started to see that medical device tax was put in, I would say, somewhat suddenly in that bill, and was set at a level that people hadn’t determined the effect it would have,” Sen. Amy Klobuchar, D-Minn., said last year. “It’s a pretty hefty tax, especially for small companies.”
Klobuchar and other Democrats have suggested they would support a repeal of the tax only if it were offset with money from elsewhere in the federal budget, a position not supported by Republicans. But with the medical technology industry saying the tax forced companies to lay off or avoid hiring 33,000 workers last year, Republicans hope enough Democrats will support their efforts regardless.
“A lot of people, on the face of it, say 2.3 percent doesn’t sound like very much,” Paulsen said. “But this is a very unique tax. It’s a tax on sales, not on profit, and the medical device industry has one of the highest effective tax rates in the world, essentially, so that’s why this is front and center, because it is about jobs.
“This is one of those unique issues where it’s in everyone’s best interest. And when there are issues that are in everyone’s best interest, that’s when stuff starts to happen.”
