March 22, 2013
Their Own Devices
The Affordable Care Act has been a running series of nasty non-surprises, with many more on the way—gird yourself for 116% insurance premium increases—but sometimes the surprises are real. Take the amazing bipartisan turn against the 2.3% tax on medical device makers, even among liberals who still evince no remorse for voting for the overall bill three years ago.
Not that the media noticed, but on Thursday night ObamaCare's $29 billion excise tax on device sales (not profits) lost on the Senate floor in a rout. The vote was 79 to 20, well over the two-thirds supermajority required to override President Obama's threatened veto.
More amazing still, the 33 Democratic and one independent defectors didn't merely come from device-making states like Massachusetts (Elizabeth Warren and Mo Cowan) or Minnesota (Al Franken and Amy Klobuchar, the main cosponsor of the amendment with Utah's Orrin Hatch).
They included the Senate Budget Chairman, Patty Murray of Washington, and Illinois's Dick Durbin, the Senate's No. 2 leader. New York's Chuck Schumer—Majority Leader in waiting—climbed aboard, as did otherwise conventional progressives like Maryland's Barbara Mikulski and Connecticut's Richard Blumenthal.
Before the vote, some of these stalwarts denounced the Affordable Care Act in terms even we might consider excessive. Here's Mr. Franken: "The industry is being punished for its innovation and growth." Or as Ms. Klobuchar put it, "The tax is a burden on medical device businesses but, most importantly, it is a disincentive for jobs. It stifles innovation, and it makes it more difficult for the next generation of lifesaving devices to make it to the market."
All of this isn't so much a change of heart as it is a full cardiac transplant. But the amendment was attached to the nonbinding Senate budget resolution. If these penitents really are serious about the damage they're about to cause in the life sciences, the next step is to send a real bill to the House. Last June that chamber voted 270 to 146 to repeal the tax, also close to the 290 veto override threshold. Then dare Mr. Obama to try to defend an anticompetitive, antigrowth tax.
Back then the usual media suspects said it would never come to that because the House repeal was DOA in the Senate, but the conventional ObamaCare wisdom is usually false and so it has proven to be again. What the Senate vote shows is that the newest entitlement is far more vulnerable than the political class claims to believe, especially once people see its consequences in practice. There will be many more such reversals.
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