Medical device manufacturers will be pinched by the Obamacare tax. It will do both sides in Washington a lot of good to repeal that piece of the law. (Todd McInturf / The Detroit News)
In a Tuesday press conference, President Barack Obama responded positively to a House Republican leadership trial balloon that they would pass short-term legislation re-opening the government and averting a default in return for immediate negotiations over Obamacare and federal spending.
“If reasonable Republicans want to talk about any of these things again, I’m ready to head up to the Hill and try,” the president said.
Having recklessly taken the nation to the brink of default, both political parties desperately need a compromise to save face. We propose a modest solution that has already received bipartisan support from the Michigan delegation, the Senate and the House: Repeal the tax on medical devices.
The Affordable Care Act passed along party lines in 2010 and has divided Washington ever since, leading to the current shutdown. Yet one aspect of the law — the 2.3 percent medical device tax on gross receipts — has united Democrats and Republican alike.
The tax passed in a blizzard of revenue-raising measures to pay for Obamacare subsidies, and it has proved a revenue-loser by punishing one of America’s premiere industries and moving jobs abroad. For example, Kalamazoo-based medical-products maker Stryker says the tax will cost the company $100 million this year — reducing its R&D budget by more than 20 percent at a loss of 1,000 workers and untold millions in resulting government tax revenue.
Consequently, repealing the tax has bipartisan support from Michigan’s diverse political delegation.
U.S. Sen. Debbie Stabenow has led the charge on the Democratic side of the aisle. She, along with and 17 of her peers, sent a letter to Senate Majority Leader Harry Reid last year urging that the medical device tax be thrown out.
“The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of 2 million skilled manufacturing jobs,” the letter read. “We must do all we can to ensure that our country maintains its global leadership position in the medical technology industry and keeps good jobs here at home.”
Indeed, the Senate followed up this March by resoundingly voting down the $29 billion (over 10 years) tax.
Seventy-nine senators voted for repeal — 33 of them Democrats including Minnesota’s Al Franken, whose state is also home to medical products jobs. The GOP-controlled House has repeatedly voted to kill the device tax and the repeal would already be law if the Senate had not attached the bill to a nonbinding Senate budget resolution.
Just last week, a group of 20 House Democrats — joining 20 House Republicans — publicly endorsed repealing the tax, marking the first time that a coalition of Democrats have publicly supported altering Obamacare as a way out of the budget impasse.
In return, the GOP lawmakers would agree to pass a spending bill keeping the government funded for the next six months.
The president has the opportunity to bring a partisan Congress together. By already voting to repeal the medical devices tax, the warring bodies have opened the door to compromise.
Obama says he refuses to pick apart Obamacare, yet when it has suited his own political interest, he has altered it himself. For example, he has delayed for a year the business mandate to provide insurance for employees and delayed verifying the income of Americans seeking subsidies.
By embracing the bipartisan opposition to the medical device tax, Obama could take a step toward ending the shutdown impasse.
And he should.