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Senate Democrats join GOP in bid to repeal health care sales tax on medical devices

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By The Associated Press

Published: Friday, March 22, 2013, 8:33 p.m.

WASHINGTON — It isn't every day that more than half the Democrats in the Senate vote to repeal part of President Obama's health care law.

But that's what happened on Thursday night when the Senate voted 79-20 to repeal a 2.3 percent sales tax on medical devices such as catheters, pacemakers and MRI machines. The tax was intended to help finance coverage for the uninsured that starts next year.

The medical device industry, a technology leader that provides many well-paying jobs across the country, has been lobbying all-out to repeal the tax. And Republicans were hoping on Friday that the vote signals a new willingness by Democrats to defy the president on unpopular provisions of his signature law.

But others pointed out that the vote is nonbinding, amounting to budget guidance. The repeal of the tax is far from a done deal, and things might have come out quite differently if senators had to confront spending cuts or tax increases to fill in a 10-year, $30 billion revenue hole.

Nonetheless, 33 of the chamber's 53 Democrats joined all 45 Republicans in voting for the repeal amendment by Sens. Orrin Hatch, R-Utah, and Amy Klobuchar, D-Minn. Four out of seven members of the Democratic leadership voted for it. Two independent senators who caucus with the Democrats split their votes for and against.

Republicans said the result exceeded their expectations.

“I would like to see the entire law repealed,” said Sen. John Barrasso, R-Wyo. “But since the Supreme Court said it's constitutional, and the president was re-elected, I think we are going to see Democrats work in a bipartisan way to repeal portions of the law.”

Other targets: a tax on health insurance plans and a Medicare cost control board.

Not so fast, says the White House. “Last night's purely symbolic vote has no bearing on the future of the Affordable Care Act and its implementation,” said spokesman Brad Carroll.

The administration says the industry will benefit from millions of newly insured customers as a result of the law, and it should contribute in the same way that hospitals, drug companies and health insurance plans are taking cuts or paying higher taxes.

The industry says it has been lumped into the wrong category, because the vast majority of its customers are covered by insurance and it isn't expecting a windfall from Obama's law.

The companies started paying the tax on Jan. 1, and they say if it stays on the books that will lead to lay-offs and put a damper on investment. Outside economists expect the industry will pass on most of the tax increase to customers.

The one thing the Senate vote clearly proved is that the industry has lobbying clout, said Robert Laszewski, a consultant to health care companies.

“This was an easy vote for many senators to take in response to a very powerful medical device lobby,” Laszewski said. “Let's see what happens when the choice is to undermine the (health care law) or come up with an alternative source of revenue. I don't think these 33 Democratic senators have any intention to start taking the Affordable Care Act apart.”

 

 
 


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