Paulsen tries again to repeal medical device tax

Paulsen
Congressman Erik Paulsen in his Washington office, Dec. 8, 2014. Brett Neely/MPR News

WASHINGTON - If at first you don't succeed, try and try again. That's clearly Erik Paulsen's approach to undoing the medical device tax that's part of the Affordable Care Act.

Paulsen, a Republican who was sworn in for his fourth term on Tuesday, has made repealing the tax that affects Minnesota companies such as Medtronic one of his top priorities this term. While he's succeeded in getting the bill through the Republican-controlled House twice with Democratic votes since 2012, the effort has stalled in the Senate, controlled by Democrats until this week.

The latest bill has the support of 257 members of the U.S. House, including all eight members from Minnesota, indicating more than enough votes for passage. Many of the Democrats who back the bill say they are doing so to protect medical device companies in their districts.

"Repealing this tax has strong bipartisan support across the political spectrum," said Paulsen at a press conference in Washington on Wednesday. "We've been in the red zone before but now with new Senate leadership, we're confident we can get it across the goal line."

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The industry has long complained the tax hurts innovation and leads to layoffs though the Washington Post's fact-checker has disputed those claims, describing them as a "mischaracterization."

The bill won't just lower future tax bills for medical device companies. It retroactively eliminates the tax which would mean a refund for companies that have already paid it.

Both of Minnesota's senators voted to repeal the tax as part of a non-binding budget in 2013, and the measure has considerable support in the GOP-run Senate.

Still, major challenges remain.

First, under congressional budget rules, cutting taxes means finding $30 billion worth of new revenue or spending cuts over the next 10 years elsewhere in the federal budget to ensure that deficits don't increase. Paulsen said no such offset had yet been identified.

Second, it's not clear whether President Obama would veto a repeal if presented with the bill. Following the Democrats' defeat in midterm elections, Obama has not shied away from confrontation with Republicans and issuing veto threats.