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Indiana Medical Device Makers Hope Obama Doesn't Hold To Device Tax Repeal Veto

Tim Gee

The House has again voted to repeal the medical device tax included in the federal health care law -- but Indiana manufacturers insist this time, it might stick.

The Senate is considering repeal of the 2.3-percent tax under a rule which prohibits a filibuster. That makes the bill likely to reach President Obama's desk for the first time.

The White House has already threatened a veto, but Indiana Medical Device Manufacturers Council president Denis Johnson maintains there's reason to believe Obama might reconsider.

“Many companies are already lean in manufacturing competing with international companies where there may be a lower cost basis, and so once you layer on that 2.3-percent tax, they have to take it from somewhere,” Johnson says. “Many companies in our industry are in a state where they’re having to take it from research and development.”

He says he believes the White House is aware of what he says is the damage done by the tax, with device makers scuttling expansion plans, curtailing research and development, and, in other states, moving their operations.

“I’ve seen companies move overseas and re-headquartered to avoid that tax,” Johnson says. “And being someone who’s living in Indiana, who’s very supportive of the workers we have here in the state, it’s not something I’d like to see.”

The House has voted twice to repeal the tax, not counting the dozens of times it's voted to repeal the Affordable Care Act entirely.

At least five Democratic senators, including Indiana's Joe Donnelly, are supporting the bill. But some conservative Republicans have threatened to vote no because the bill falls short of full repeal of the health care law.

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