U.S. House panel backs medical device tax repeal

WASHINGTON Thu May 31, 2012 3:38pm EDT

Related Topics

WASHINGTON (Reuters) - A Republican-controlled congressional panel voted on Thursday to repeal a tax on medical devices, a key revenue provision in President Barack Obama's 2010 healthcare reform law, but the measure was not expected to become law.

Approval in the House, which is dominated by Republicans, was viewed as probable, possibly as soon as next week. But the measure faced an uphill climb in the Democrat-controlled Senate, where parallel legislation lacks bipartisan sponsors.

The tax-writing House Ways & Means Committee voted 23-11 in favor of the repeal, saying the tax would hurt businesses and employment in the medical device industry. Only two Democrats were among those supporting the bill.

Democrats criticized the bill's Republican sponsors for not proposing an offset to make up for the $29 billion that repeal would cost the U.S. Treasury in lost tax revenue through 2022.

Obama's controversial Patient Protection and Affordable Care Act includes a 2.3 percent excise tax, on track to take effect in 2013, on the sale of medical devices by manufacturers, producers or importers. Eyeglasses, contact lenses, hearing aids and other retail devices are exempt from the tax.

on the other side of Capitol Hill, the Supreme Court was still deliberating over a challenge to the healthcare law that could render moot Republicans' various attacks on it in Congress. The court was expected to rule in late June.

While lawmakers debated the medical device tax, the U.S. Internal Revenue Service was already writing regulations to implement the law. Many of the same companies lobbying for the tax repeal are also arm-twisting the IRS for exemptions.

The House bill was introduced last year by Erik Paulsen, a Minnesota Republican. Two of the largest companies lobbying for repeal, Medtronic and 3M Co, are based in Minnesota.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Dan Grebler)

FILED UNDER: