Pence repeats call for repeal of medical device tax

By Lesley Weidenbener
TheStatehouseFile.com

INDIANAPOLIS – Gov. Mike Pence took his campaign to repeal the federal medical device tax to a Hoosier plant where officials said Tuesday that every penny the firm sends to the government is money that can’t be invested back in the business.

Gov. Mike Pence told reporters on Tuesday that national Republicans and Democrats should work toward a compromise on health care and the budget that includes the repeal of medical device tax. Photo by Lesley Weidenbener, TheStatehouseFile.com

Gov. Mike Pence told reporters on Tuesday that national Republicans and Democrats should work toward a compromise on health care and the budget that includes the repeal of medical device tax. Photo by Lesley Weidenbener, TheStatehouseFile.com

Pence toured Greatbatch Medical, a medical device firm with three plants in Indiana, before sitting down with executives from Roche, Boston Scientific, Biomet, Cook Group and other Indiana medical technology companies to talk in part about the tax, which is helping to fund the federal health care law.

After the closed door meeting, Pence told reporters that repealing the device tax is a path out of the federal government shutdown, which is the result of a standoff between Republicans seeking to gut Obamacare and Democrats working to defend it.

The business leaders “expressed to me the negative impact the medical device tax has had on this industry and jobs here in Indiana,” Pence said. They made it “very clear if Congress found a way forward and the administration found an agreement that would include a full repeal of the medical device tax, that would mean immediate renewed investment in Indiana by this industry and it would mean Hoosier jobs.”

But repealing the tax – which took effect Jan. 1 – would reduce revenue to the federal government by as much as $30 billion over 10 years and would increase the federal deficit, unless Congress finds ways to offset the lost revenue. Pence, a former congressman, said he’s confident lawmakers can make those choices but he didn’t offer specifics about what he’d propose slicing from the federal budget.

White House officials have already said no to proposals that would attach the repeal to a government-funding bill in an attempt to end the shutdown. And on Tuesday, President Barack Obama accused Republicans of essentially holding Americans hostage over the budget and health care issues.

“We’re not going to pay a ransom,” the president said. And he added, “We can’t afford these manufactured crises.”

Business leaders on Tuesday didn’t wade into the politics of the shutdown. But they said the medical device tax has hurt investment into research and development.

Mauricio Arellano, executive vice president of global operations at Greatbatch, said the company invests all its earnings back into innovation “which translates into growth, which translates into jobs.”

“For us, the device tax is taking away our ability to make those investments – and investments that will generate jobs here in the state of Indiana through the facilities we’ve established,” he said. “We’re a medical device industry. We’re making a difference in the lives of hundreds if not thousands of patients everywhere and we’re committed to that mission.”

Mauricio Arellano, executive vice president of global operations at Greatbatch, said the company invests all its earnings back into innovation “which translates into growth, which translates into jobs.” Photo by Lesley Weidenbener, TheStatehouseFile.com

Mauricio Arellano, executive vice president of global operations at Greatbatch, said the company invests all its earnings back into innovation “which translates into growth, which translates into jobs.” Photo by Lesley Weidenbener, TheStatehouseFile.com

The medical device industry employs roughly 20,000 Hoosiers and the life sciences sector has been a leader in the creation of new Hoosier jobs.

The tax was passed as part of the health care law but there have been Republicans and Democrats – including U.S. Sen. Joe Donnelly, D-Ind. – who have said they’d like to repeal the tax.

Lesley Weidenbener is editor of TheStatehouseFile.com, a news website powered by Franklin College journalism students.

Correction: This story has been changed from its original version. The initial post said the $30 billion in revenues brought in by the medical device tax was an annual figure. It actually represents 10 years of projected revenue. TheStatehouseFile.com regrets the mistake.
You can see all our corrections at http://thestatehousefile.com/info/corrections/.

 

 

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One Response to Pence repeats call for repeal of medical device tax

  1. What is almost never mentioned in these discussions is the reason the tax was instituted in the first place: To reclaim for the public the windfall these firms will get from the ACA, as millions more Americans with health insurance use more health care services. There is no need for a 30 billion dollar give-back to this very profitable industry at the expense of cuts elsewhere in the federal budget. Instead Congress should look to revenue increases from the wealthiest or cuts in special interest tax breaks. Claims of cutbacks in R&D are not backed by any data made publically available and are dubious on the face of it. Rich people and rich companies just don’t like to pay taxes and they always trot out the old “job creator” mythology to justify their position.