House Republican Freshmen Push to Repeal Tax on Medical Devices

Billy House
National Journal

The nearly 40-member House Republican freshman class is pressing party leadership to finally allow action on a bill to repeal a 2.3-percent excise tax on medical devices that was enacted to help pay for President Obama's health reform.

That bill remains frozen in the House Ways and Means Committee, despite having 259 bipartisan cosponsors in the 435-seat chamber. Moreover, in March, the Senate, in a symbolic move of support for the legislation, voted 79-20 in a non-binding resolution to repeal the tax as part of the chamber's 2014 budget resolution.

"As a majority of freshmen in the 113th Congress, we believe this is exactly the kind of bill we were elected to pass," declares a letter to Speaker John Boehner and other GOP leaders signed by 35 of the 37 House Republican freshmen. They are led by class president Luke Messer of Indiana.

A 36th freshman, Rep. Roger Williams, R-Texas, had not yet signed the letter, but is a co-sponsor of the bill.

The GOP freshmen point out in their letter that the excise tax increases the total amount of federal taxes paid by the medical-device industry by 30 percent. And they say it already has caused medical device manufacturers "to cut jobs, halt hiring, and delay or eliminate facility expansion, all to subsidize President Obama's health care law."

There are more than 8,000 medical-device manufacturers in the United States, employing more than 20,000 Americans. The tax enacted in 2010, and which took effect in January 2013, "will raise nearly $30 billion from America's medical-device manufacturers, putting up to 43,000 high-paying U.S. jobs at risk," warns the letter.

The letter also notes that Ways and Means Chairman David Camp, R-Mich., has identified the medical-device tax repeal as something he wants to include in comprehensive tax reform.

So why isn't the bill already passed?

Its sponsor, Rep. Erik Paulsen, R-Minn., has said he's also been pressing House leaders to take action, but that they have expressed concern about sending a revenue bill to the Senate. Their strategy has been that the House will have to first secure a commitment from Senate Democrats that they would address the medical-device tax specifically, and not other priorities.

The Constitution requires revenue measures to originate in the House, but once the Senate receives those bills, they can be used as a vehicle for its own tax priorities. Some House Republicans point to the potential use of these bills by Senate Democrats to advance tax hikes and other measures that Republicans oppose

In an interview Thursday, GOP freshman class president Messer said he's had similar conversations with Republican leaders.

But he said House action should be taken on the bill, anyway--and that Republicans who control the chamber's majority can later determine how to deal with anything the Senate might try to alter.

"We should not have a fear of governing," said Messer.