Still Here, Will the 2.3% Medical Device Excise Tax Ever Go Away
I had the pleasure of receiving several emails, links, and assorted RSS feeds letting me know that the Senate passed a budget and the Medical Device Excise Tax was voted out. Unfortunately, this tidbit of information was more spin than anything. Just to clarify exactly what the President, House of Representatives, and Senate have been doing on the United States budget and the 2.3% Medical Device Excise Tax created by the Patient Protection and Affordable Care Act (“PPA”) on March 21, 2010. I will summarize some key events and the correlating outcomes.
There has been no budget passed and signed by the President since the he took office January 20, 2009. There have been numerous budgets introduced in the Republican controlled House of Representatives over the last four years and none have passed the Democrat controlled Senate. On the three year anniversary of the PPA the Senate took the budget to heart and passed Ms. Patty Murray’s (D) Budget Resolution by a vote of 50-49. The Medical Device Excise Tax was addressed in amendment no. 297 (commonly referred to in the press as the Klobuchar-Hatch Amendment) and was just one of 75 amendments that the Senate passed of 573 proposed amendments. The Klobuchar-Hatch Amendment passed by a margin of 79 to 20, the 20 voting against and the single no vote were all from Democrats. Some of these Senate amendments were just full of pork, for example amendment no. 239, Senator Udall of Colorado got a bump for the Forest Service. Even the oil and gas lobby got into the act with amendment no. 409.
Was the Senate’s budget legitimate, a farce, an attempt to get out in front of President Obama’s budget? The Budget Act of 1921 requires the President to provide a budget to Congress by February 1 every year. While the President has been late four out of the last five years on his budget many are joking that his NCAA bracket is always filled out on time.
To put this in context we really need to understand the budgetary process. Under Article 1, Section 7 of teh U.S. Constitution “All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” The Senate may make proposals so Senator Murray’s resolution was not illegal. And, the House of Representatives did vote on Senator Murray’s un-amended resolution on March 20, 2013 and voted it down by a vote of 154-261. To be fair the House of Representatives have introduced three other resolutions. The Congressional Black Caucus budget was voted down in the House 105-305 a poor showing compared to Senator Murray’s budget resolution. And, the Progressive Caucus budget was voted down 84-327 what could only be seen as a resounding defeat.
The third budget put forth by the House of Representatives is the Paul Ryan budget that passed 221-207 on the PPA’s third anniversary. Not one of the four proposed amendments to the Ryan budget were passed by the House. The Ryan budget was submitted to the Senate on March 22, 2013 and has been calendared. The Ryan budget also gets rid of the Medical Device Excise Tax, no amendment necessary there. The Medical Device Manufacturers Association and AdvaMed have press releases based on the Klobuchar-Hatch Amendment but no reference to the Ryan budget.
In summary, the Medical Device Excise Tax has already caused the loss of thousands of jobs in the US. The IRS has no complaints, it has already received payments in excess of $380,000,000. And, the tax is going to remain in effect unless a simple by-partisan legislation can be introduced focusing solely on the excise tax. Otherwise, the excise tax is just a bargaining chip in a broken down budget process.