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Memo 3 To The D.C. GOP: Repeal The Medical Device Tax In April–Chairman Brady Says It Could Be Done

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Three days of radio, two columns (here and here) and endless posts and transcripts of interviews this week have tried to focus attention on the Senate’s bipartisan vote last week to repeal the destructive medical device tax, which is 2.3% tax on the revenue –not profits, revenue– produced by the amazingly productive, innovative and growing jobs-machine that is the medical technology sector.  8,000 firms directly employing around 500,000 in this sector and indirectly employ double that number, and it has been reeling since the tax kicked in this year.

On my radio program yesterday, a key figure in the timing of the repeal, Congressman Kevin Brady of Texas, who is chairman of the Health Subcommittee on the House Ways and Means Committee weighed in.  “[T]hat vote in the Senate was a bit of a game changer in the sense that we’ve always known we have the votes in the House to do this and repeal that completely now,” Chairman Brady told me.  He went on to state that no “pay for” should be required for repeal of such a destructive bill, and that it shouldn’t have to wait for “comprehensive tax reform” either:

I don’t think we need the pay for, frankly, because it is a tax cut. It is a huge, literally, tens of thousands of good-paying American jobs, plus the damage is does to our innovation economy going forward. So I don’t think you necessarily have to have a pay for. And I don’t think it has to wait for fundamental tax reform, necessarily, because this really is a one off tax increase that makes no sense, and whose whole principle is that we are told, is that well, medical device manufacturers will benefit from having new patients under Obamacare, so you should pay this revenue, this sales tax, just for the privilege of manufacturing in America, which we think is flawed in about a dozen ways.

I asked Chairman Brady if that meant getting repeal through the House in April.

“Well, I don’t know,” he said candidly. “I hate to overpromise without knowing for sure, but when we get back obviously right after Easter, it’s going to be a top priority.”

The full transcript is here.

I also talked about the politics of repeal with Karl Rove, and that transcript is here.  He urges the House to move a clean repeal bill through and over to the Senate as well.  “[T]his is one that seems to me to be easy,” he told me.

Pass the measure they passed last year, send it to the Senate, and one of three things is going to happen. It’s going to die, in which case it’s going to be clear the Democrats didn’t really mean it. They’re going to take it up and insist on a pay for. Okay, fine. A pay for. For example, one thing is to say okay, we’re going to sweep the unpaid, the unspent balances. We have these giant slush funds in most of the agencies called the unspent balances. Go sweep those, and take that money. I bet it’s in excess of $30 billion dollars. And use it as the pay for. Or thirdly, you know, just pass it and reduce it, and further undermine Obamacare. But one of three things is going to happen, and two out of the three are good, particularly if you’re smart about the pay fors, if they insist on a pay for.

It may not be as easy as that as Senate Democrats, even those onboard with repeal, may have lousy ideas on “pay foes,” but chances are there is a bipartisan solution for a terrible tax.

The need is for speed.  Can the GOP, for once, act with dispatch?




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