Minnesota's legislative delegation renews device tax battle

Sen. Amy Klobuchar Sen. Al Franken

Minnesota maintains one of the top medical device industry clusters in the U.S., so it is natural that their congressional delegation is charging ahead with another effort to kill the medical device tax.

U.S. senators Al Franken (D-MN) and Amy Klobuchar (D-MN) planned to co-sponsor a new bill on Feb. 7 to repeal the tax, the StarTribune reports. The measure goes with a companion bill filed one day before by Rep. Erik Paulsen, a Minnesota Republican who remains a vocal opponent of the 2.3% excise tax, which kicked in on Jan 1. Minnesota's legislative delegation--including other Democrats--all back the renewed repeal effort, even those such as Klobuchar and Franken who supported the Affordable Care Act containing the tax. Klobuchar told the newspaper she hopes a repeal could be included as part of major tax reform or any sort of broader budget deal. They are clearly swayed by the idea that the tax could harm both job growth and innovation.

The new bills arrive promptly, not long after House Majority Leader Eric Cantor announced efforts to repeal the tax as part of the Republican party's new focus on healthcare, education and jobs. And they come at an interesting time in what has become an ongoing marathon battle against the tax. Industry trade groups such as AdvaMed insist that bipartisan opposition to the tax is growing, especially now that companies such as Boston Scientific ($BSX) and Smith & Nephew ($SNN) are pursuing hundreds of new job cuts that they insist are necessary because of the extra device tax expense. And hospitals have also joined in the fight, irked that some companies appear to be trying to pass on the extra tax expense to them in the form of new fees.

Considering that President Barack Obama is a strong supporter of the tax, a repeal fight could be tough. Even last year, when the Republican majority House passed a repeal bill, Obama threatened a veto and the measure died. But Klobuchar and Franken supported the health reform law, though the article notes that both worked successfully to halve the initial tax proposal. Their new opposition to the tax carries more nuance, though, with a greater focus on replacing the lost revenue a repeal would create, but how that could be accomplished remains an open question.

- read the StarTribune story

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