Device Tax Repeal Part of Overall Tax Reform?

U.S. Sen. Amy Klobuchar (D-Minn.), who has been a key player in recent efforts to repeal the 2.3 percent medical device excise tax, said that she is confident that Congress will repeal the tax. Speaking at a recent Minnesota medical device conference, she said that she believes the measure will soon be linked to tax reform or other legislation that is unlikely to be vetoed by President Obama.

Klobuchar pointed to Sen. Max Baucus’ (D-Mont.) tax reform bill as the likely vehicle for the device tax repeal, which, if true, would be a major victory for the medical device industry. Baucus is generally considered to be the author of the medical device tax, so any move toward repeal associated with him would be most meaningful and persuasive.

“[The tax reform bill] will be a major vehicle for us to include the repeal of the medical device tax or at least some major reduction,” Klobuchar said at the conference. “It’s very exciting—the possibility of simplifying your tax code and making sure it’s fair for everyone and also making our businesses more competitive. We see this repeal as part of that effort,” she added.

Sen. Baucus just announced that he would be retiring at the end of his current term, and will not run for reelection in 2014.

David Castagnetti, a Democratic lobbyist and former Baucus chief of staff, told National Journal that the retirement news slightly increases the odds of passing tax reform.

“The game changer is he can spend more time working on tax reform because he doesn’t have the pressures of running for reelection so he can spend more time on the substance, more time on the details of how do you get a deal done,” Castagnetti said. “He always wanted to get it done, so I’m not sure it changes his perspective.”

On April 17, Sen. Baucus demonstrated that he might be open to reconsideration of the device tax at a Senate budget hearing, when he told U.S. Department of Health and Human Services Secretary Kathleen Sebelius that ,so far, he saw the implementation of healthcare reform as a “train wreck.” He said that there was not enough education and information being transmitted to the public on the new laws, and he gave a “failing grade” to the administration’s public information efforts.

“Sen. Baucus has a long and distinguished record of service in the U.S. Senate and to the people of Montana,” said J.C. Scott, chief lobbyist for the Advanced Medical Technology Association in Washington, D.C. “We look forward to continuing to work with him on a number of important issues facing the medical technology industry including implementation of payment reforms included in the Affordable Care Act, efforts to address the budget deficit and corporate tax reform including repeal of the device tax.”