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Ms. RICHARDSON. Mr. Speaker, I rise today in opposition to H.R. 436, the ``Protect Medical Innovation Act.'' This bill would repeal a 2.3 percent tax on the sale of medical devices that was scheduled to take effect in 2013 as a part of the healthcare reform legislation. The Joint Committee on Taxation, however, has said that this tax elimination would cost the government $29.1 billion in lost revenue through fiscal year 2022.
This decrease in revenue would be offset by the elimination of the cap on repayments of advance premium tax credits. This provision had been introduced to aid low- and moderate-income families whose economic circumstances changed dramatically during the year. The current repayment cap on tax credits is important to millions of American families facing economic uncertainty because it offers a guarantee that they will not be hit with unexpected tax bills at the end of the year. H.R. 436 brings the threat of uncapped expenses and will effectively serve as a deterrent for families considering purchasing healthcare coverage.
The Joint Committee on Taxation has estimated that the loss of revenue will therefore increase the number of uninsured Americans by 350,000, and I fear that the 37th Congressional District of California will be particularly impacted. In the city of Los Angeles, it was reported this month that unemployment had risen to 8.2 percent, or 13.6 percent for African Americans and 11 percent for Latinos. In construction alone, 28,000 jobs were cut, along with 13,000 in government. As we debate the repayment cap, we must keep in mind these thousands of hardworking citizens and their families who might otherwise feel the security of affordable healthcare coverage in uncertain times.
Mr. Speaker, healthcare reform legislation does not unfairly target the medical device industry, as many are claiming today. In the spring of 2009, representatives from various healthcare sectors, including medical device companies, pledged in a letter to work with President Obama to accomplish the goal of a more affordable and efficient healthcare system. This tax serves as the industry's contribution to the cost of reform. It is not an unreasonable sum, especially when the industry stands to benefit from an additional 30 million insured customers. Of those, roughly 10 million will fall between the ages of 50 and 64, an age group with a high proportion of people needing medical devices.
The passage of this bill would send a dangerous message to other healthcare sectors who are contributing to the cost of comprehensive healthcare reform. Pharmaceutical companies, health insurance companies, skilled nursing facilities, laboratories, and home health providers have all taken on additional costs and taxes. We should be wary of setting a precedent that exempts one industry from its promised contributions, should other sectors then push for a similar repeal.
Supporters of this bill have also aligned themselves with small businesses; however, any tax relief would be siphoned off to large corporations. Industry analysts predict that the ten largest companies manufacturing medical devices, who in 2011 had net profits of $48 billion, will pay 86 percent of this tax. The medical device industry is already very profitable, and the benefit of ten million new customers will outweigh the cost of the tax.
I would like to take an additional moment to address the Republicans' claims that this bill will stop job loss and decelerated innovation. There is currently no incentive for medical device companies to shift jobs overseas because the tax does not apply to devices sold to other nations. Moreover, devices imported into the United States are subject to the same 2.3 percent tax. This means that there will be no unfavorable advantage for foreign-manufactured devices in domestic markets, and there will be no added cost to selling American devices in the international market.
Mr. Speaker, I was an original supporter of President Obama's plan for healthcare reform, and I believe that H.R. 436 would only be a step backwards. I will vote against this legislation, and I urge my colleagues to do the same.
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