July vote to repeal medical device tax may bolster vulnerable GOP lawmaker

The House is planning to vote this month on legislation that would repeal ObamaCare’s medical device tax, a move that would satisfy industry leaders and boost the reelection prospects for the bill’s sponsor.

Rep. Erik Paulsen (R-Minn.), a vulnerable GOP lawmaker, is hoping to score a legislative victory that he can tout in his suburban Minneapolis district, home to several medical device companies and their employees. With a vote on the measure expected this month, according to sources familiar with the plan, he may soon have a new accomplishment to highlight on the campaign trail.

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“We’ve got a lot of little companies that want to become the next Medtronic or Boston Scientific, so, yeah, I’m sure it’s something we’ll be talking about in terms of getting something done in an atmosphere where it’s tougher to get stuff done,” Paulsen told The Hill.

The 2.3 percent tax on sales of medical devices, enacted to help pay for ObamaCare, has drawn opposition from Republicans and even some Democrats who say it harms innovation for life-saving medical devices. Implementation of the tax has been delayed several times, but it is scheduled to take effect in 2020.

Larry Jacobs, a political science professor at the University of Minnesota, said repealing the tax is “absolutely popular in this district,” and doing so could be beneficial for Paulsen’s reelection efforts.

He added, though, that Paulsen could be exaggerating the political threat he faces, saying the incumbent has been like “Chicken Little” in past races by scrambling to rally outside support for his campaign, only to end up winning by a comfortable margin.

The Cook Political Report rates Paulsen’s race against Democratic businessman Dean Phillips as a “tossup.” Democratic presidential nominee Hillary Clinton won Paulsen’s district in 2016 with 51 percent of the vote, compared to President Trump’s 41 percent.

House GOP leaders have been looking for ways to give legislative accomplishments this year to their vulnerable members. Paulsen is hoping that a strong, bipartisan vote in the House in July will put pressure on the Senate to send the measure to the president’s desk.

“We’re kind of thinking if we get a big vote like that it will actually show the Senate we want to get this done,” Paulsen told The Hill.

There are 43 Democrats among the bill’s 269 co-sponsors in the House. On the other side of the Capitol, repealing the tax has garnered support from prominent Democrats like Sen. Elizabeth Warren of Massachusetts, a state that’s also home to many medical device companies.

Paulsen’s opponent in November said in a statement that he supports repealing the medical device tax. But Phillips criticized Paulsen for supporting the GOP tax law passed last year, saying it will lead to lost revenue through “massive tax giveaways to those who need them least.”

Opponents of repealing the medical device tax have made a similar argument.

“We’re facing large and growing deficits, so we need all the revenues we can get,” said Paul Van de Water, senior fellow at the left-leaning Center on Budget and Policy Priorities. “If we provide further tax breaks for medical device manufacturers, that just increases the desire of other industries or interest groups to push for further tax cuts to benefit them.”

Repealing the device tax would reduce federal revenues by about $20 billion over 10 years, according to the nonpartisan Congressional Budget Office.

The medical device industry, however, says the tax hinders technological developments that could save lives.

“A House vote on full repeal of this stifling tax sends the right message that Congress is serious about creating more jobs and incentivizing this industry to continue to develop new innovative medical breakthroughs which impacts millions of American lives every day,” said Scott Whitaker, CEO of the Advanced Medical Technology Association, an industry group. “Taxing the development and manufacture of these life-saving technologies helps no one, especially patients.”