Why Did Liberals Kill the Medical Device Tax?

Reporting on Politics and Policy.
March 22 2013 11:10 AM

Why Did Liberals Kill the Medical Device Tax?

The first peals of doom for the Medical Device Tax were heard one year ago, in Massachusetts. For some time, the medical device industry had been lobbying to kill the tax -- a component of Obamacare estimated to raise $30 billion -- by getting Washington wise men to decry it. Dick Gephardt was their first prominent recruit, but come on -- he was Dick Gephardt. But the juice of this effort was hard to recognize until Elizabeth Warren, the Democratic candidate with the best chance of beating a Republican, came out against the tax. As Alec MacGillis reported at the time, it was a useful wedge against Scott Brown.

The measure is unpopular with Massachusetts’s powerful device lobby, and Brown has hammered away at it all year. In April, Warren published an op-ed in an industry trade journal stating that she also favored repealing the tax and replacing its revenue with an “appropriate offset.” Two pro-Warren executives at device-making firms, who find the tax acceptable, told me they were puzzled by her stance.

Warren won, and last night she joined 34 Democrats and cast a symbolic vote to repeal the tax. (Because budget votes don't bind spending, all of the amendments are symbolic.) Sen. Mo Cowan, the temporary Massachussetts senator who probably wants to make money after he's replaced, voted with Warren. Montana's senators, whose state doesn't bustle with medical device industries, voted no -- something that we might have expected, given Baucus's role in writing the health care law, and something that will matter when Max Baucus's Finance committee gets some mitts on tax reform.

For now, though, it's a free "anti-tax" vote for Democrats, and a way to inform an industry's lobbyists that their money's still good.

David Weigel is a reporter for Bloomberg Politics



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