Barrasso: Obamacare Device Tax Crushes Jobs, Increases Health Costs

Instead of creating jobs, the President’s health spending law is destroying jobs across the country. In fact, the health law includes a $20 billion medical device tax that is expected to kill at least 43,000 American jobs and decrease research and development into new lifesaving medical devices.

Recently, columnist George Will wrote about how this tax will impact Cook Medical, the world’s largest family-owned medical devices company. He explains that this tax will lead to:

“…fewer jobs but also fewer pain-reducing and life-extending inventions—stents, implantable defibrillators, etc.—which have reduced health-care costs.”

Today, U.S. Senator John Barrasso (R-WY) called on Congress to support Senator Orrin Hatch’s (R-UT) legislation that would repeal President Obama’s anti-competitive, job-crushing medical device tax before it begins in 2013.

Excerpts of Senator Barrasso’s remarks on the floor of the U.S. Senate:

“Recently columnist George Will wrote about how the President's law will impact Cook Medical.

“He explained in his column that the Democratic Congress ‘included in the legislation a 2.3% tax on gross revenue.’ Not profits. We're talking gross revenue. ‘which generally amounts to about a 15% tax on most manufacturing profits from U.S. sales and medical devices beginning in 2013.’

“This will be piled, as he says, ‘on top of the 35% corporate tax plus state and local taxes.’ Mr. Will went on to say, ‘this 2.3% tax will be a $20 billion blow to an industry that employs more are than 400,000 people and $20 billion is almost double the industry's annual investment in research and development.’

“Well, we want them to do research. We want new and innovative treatments that will actually help people.

“Instead, this administration, the Democrats in Congress and the House and the Senate and the President of the United States, put a 2.3% tax $20 billion blow to those who do the research and the development.

“This tax is going to lead to fewer jobs, but also fewer pain-reducing and life-extending devices, stents, and other things.

“Cook Medical isn't the only company bracing from the President's legislation.

“Boston Scientific—it's planning for more than $100 million charge against earnings in 2013, and they recently built a $35 million research and development facility.

“Where did they build their research center? Ireland. And they're building a $150 million factory it's called ‘Boston Scientific’ in China.

“That's a result of what we see with this health care lands the impact of what this administration is doing to jobs in America.

“Striker Corporation based in Michigan blames the tax for 1,000 layoffs. Zimmer based in Indiana is laying off 450 and taking a $50 million charge against earnings related to this tax.

“These are companies that, as an orthopedic surgeon, have made new advances in technology, in artificial joints over the years that I practiced in Wyoming. Companies that have long-standing reputations and yet laying off people because of the new health care law.

“In March, Senator Coburn and I released our third health care law oversight report. We entitled the report ‘Warning: Side Effects. A Check Up on the Federal Health Law.’ One chapter is dedicated to the health care law's job killing medical device tax.

“Not only will this tax kill 43,000 jobs, workers are going to lose about $3.5 billion in wages. This is money that these workers could have spent in their local communities helping the economy of those communities and, therefore, the nation's economy.

“So what does all of this mean to U.S. Device manufacturers? Well, these companies are more likely to close their plants in the United States. They will close plants here and do what others have done, replacing them with plants overseas.

“Foreign manufacturers will improve their competitiveness compared to American firms. This will severely threaten U.S. leadership in the device industry and in the world.

“If the administration wants to get serious about reducing regulatory burdens and about creating good jobs, then the President should start today by repealing his onerous medical device tax.

“Not only will this device tax suppress job creation and limit economic growth, it will also slow and perhaps even stop research and development into new lifesaving medical devices.

“We must take action to repeal this anti-competitive job-destroying device tax before it begins to take effect in 2013.

“Senator Orrin Hatch has introduced legislation, S. 17 that would do just that. I'm proud to be a cosponsor of that bill, and I believe the Senate should take up the Hatch bill and pass it.”