Senate debt/government funding compromise avoids addressing device tax repeal

In the end, efforts by opponents of the 2.3% device tax to lobby for its end as part of the government funding fight may not have been enough. A compromise measure emerging from the Senate contains no mention of a repeal.

News outlets including Bloomberg, The New York Times and others reported that Senate leaders hashed out a bipartisan deal that would raise the debt ceiling for a few months and finance the government through mid-January. Their agreement does not include a repeal or delay of the tax, which is designed to help support the Affordable Care Act.

The absence of such a measure is a major defeat for those seeking a device tax repeal, a bipartisan issue that Republicans pushed heavily in the House and Senate as a condition to reopening the federal government. AdvaMed and a number of med tech companies and CEOs have also lobbied heavily to repeal the tax, claiming it will curtail jobs and innovation in their industry over time. But linking the repeal fight to the government-funding dispute was risky and may have backfired. Democrats who otherwise support a device tax repeal resisted passing the measure in exchange for reopening the government, which mostly shut down on Oct. 1 after Congress failed to pass a resolution to continue funding. Instead, they want to deal with the issue separately--possibly as part of a larger revamp of the tax code.

As The New York Times noted, the compromise measure might end up addressing another point of contention in the Affordable Care Act. According to the article, a final bill could include a one-year delay of a tax on employers also designed to help support the new law.

Of course, there is no guarantee that the House will pass the compromise funding measure, and House Republicans helped precipitate the government shutdown by insisting on a device tax repeal or delay as a condition to reopening the government. But its absence from the Senate plan so close to the deadline to raise the debt limit (Oct.17) may not give repeal supporters sufficient time to ensure their measure remains alive.

In the end, those pushing for a device tax repeal may still end up getting what they want. White House officials said recently that they'd contemplate a device tax repeal outside of the debt ceiling and government funding fights. Expect the device tax issue to resurface sooner rather than later.

- here's the Bloomberg story
- check out the NYT piece (sub. req.)

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