Senators Request Delay for Medical Device Tax

December 11, 2012—US Senator Kay Hagan (D–NC) announced that she joined with Senator Amy Klobuchar (D–MN) in leading 16 other Democratic senators and senators-elect to submit a letter to Senate Majority Leader Harry Reid (D–NV) urging a delay in the implementation of the medical device tax that is scheduled to take effect on January 1, 2013. The tax, expected to achieve revenue of $28 billion over 10 years, was a significant branch of the proposed revenue stream to pay for the Affordable Care Act in 2010.

The letter, which is available on Sen. Hagan's website, stated, “The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of two million high-skilled manufacturing jobs. Additionally, this industry is also one of the few that enjoys a net trade surplus, significantly boosting US exports around the globe. As we work together to develop a long-term solution to help move our economy forward, reduce our debt, and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner.”

Sen. Hagan noted that according to the Advanced Medical Technology Association (AdvaMed), the medical device industry's Washington-based trade association, North Carolina has 24,500 jobs related directly and indirectly to the medical device industry, and the industry contributes $4.6 billion to the state's economy.

The Minneapolis StarTribune has more on the story and quotes Sen. Klobuchar as saying that the delay “would give us the opportunity to repeal or reduce that tax." In addition to Sen. Klobuchar, the Minnesota's other US Senator, Al Franken (D–MN), also signed the letter.

Postponing collection of the tax would require Senate action by this year's end, an action made more likely by the letter's signers, who include Senate Majority Whip Dick Durbin and Charles Schumer, the Senate's third-ranking Democrat, experts told the StarTribune.

However, the StarTribune report cited Norman Ornstein, a congressional expert with the American Enterprise Institute, who opined that political repeal would be virtually impossible before January 1. Ornstein commented to the paper, "Because of the fiscal cliff, everybody has to sacrifice. To say repeal the tax at this point is a nonstarter." Sen. Franken agreed, "I don't think we're going to be able to kill the tax by the end of the year.”