[Congressional Record (Bound Edition), Volume 157 (2011), Part 9]
[Senate]
[Pages 13312-13313]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           MEDICAL DEVICE TAX

  Mr. COATS. Mr. President, we all heard the President speak to a joint 
session of Congress last week about his jobs bill, which was released 
this morning. The President indicated he wanted to take his case to the 
people. I am glad he is doing so. As he travels about the country, I 
think he will be hearing what many of us heard during the August work 
period when we were back at home.
  As I traveled across the State of Indiana and talked to people from 
all different categories of industry--small to medium to large 
businesses--homeowners and other constituents, one thing came through 
loudly and clearly: I needed to listen to them more than they needed to 
listen to me. What was on their minds is what I think the President 
will be hearing about as he travels across the country to talk about 
his jobs plan because, clearly, on the minds of the American people are 
jobs and the lack of jobs for many who are struggling through a very 
difficult time of unemployment. There are students who graduated from 
college with no place to go. People in middle age are being laid off or 
terminated, unable to find new work. Clearly, we have a jobs crisis in 
this country. It has lasted now for some time. We have been in a deep 
recession. Hopefully, we are coming out of it, but the latest 
indicators show that things are pretty stagnant. In fact, the latest 
facts that came forward in the August reports were that job growth is 
zero. So we have some work to do. We also need to look carefully at the 
proposal the President brought before us.
  Getting back to the central point I am trying to make, what he will 
hear, I believe, from the American people--at least he will hear it if 
he stops in Indiana--is there is a great cloud of uncertainty hanging 
over the future and, because of that, people are holding back on 
spending and businesses are holding back on hiring. There certainly is 
not the confidence we have seen in the past. We have seen that 
confidence indicator drop and drop and drop--confidence in the future 
that we have our act together, that we are pulling out of this 
recession, and that we can look forward to a brighter tomorrow because 
our economy will be growing and we will be adding more jobs. That 
uncertainty results from a number of factors. Clearly, we have been in 
a downturn, and we are trying to climb out of that, but there is also 
uncertainty about what policies will be coming out of Washington that 
will affect the job creators and will affect consumers as they 
contemplate decisions regarding how to go forward.
  One of those key indicators is the uncertainty over what the Tax Code 
will bring regarding the taxing of profits or income or revenue that 
comes into America's companies. I wish to highlight one of those 
because it is important to the State of Indiana, but I think it also 
makes the larger point. There are industries that can be an essential 
part of our future and that can and are providing for essential 
employment, at higher than average wages with good skill levels, and 
that hold a lot of potential for our exporting successfully overseas as 
well as providing necessary products here at home.
  One of those industries is centrally located in Indiana--in fact, it 
is one of our top industries and an industry with significant growth 
over the last decade or more; that industry is the medical device 
industry. Yet the medical device industry, because of its success, was 
targeted during the formation of the health care plan that was proposed 
by the President and passed by this Congress in the last session. That 
bill imposed a tax increase on the medical device industry, even though 
they did not have a direct relationship with what was trying to be 
accomplished in the ObamaCare medical plan. Here is an industry that is 
a world leader, where the United States is a world leader, an industry 
that brings in substantial revenue, has seen a significant increase in 
growth, and holds great potential for the future. Yet because there was 
a search for pay-fors for the health care plan, the administration 
looked at this industry and basically said: We can draw some taxes and 
provide some revenues. Their proposal was to achieve $40 billion over a 
period of time, all of which would go to help pay for the health care 
plan. That was reduced through an amendment--or through negotiations--
to $20 billion. Nevertheless, it should have never been included in the 
first place. It was there for a revenue raiser, and it didn't have 
anything to do with the particular plan.
  Indiana is one of the world leaders in the development of medical 
technologies that enhance and save the lives of Hoosiers and patients 
around the world. We have more than 300 FDA- registered medical device 
manufacturers, employing 20,000 Hoosiers directly and another 28,000 
indirectly. There are more than 400,000 workers employed nationwide by 
this industry. These are jobs that pay, on average, 41 percent higher 
wages than the State wage rate in Indiana.
  Medical device manufacturing has been a thriving industry. It is 
critical to our State economy and many States' economies, and I will 
list some of those. States such as California, Florida, Illinois, 
Massachusetts, Minnesota, New Jersey, New York, Ohio, Pennsylvania, 
Texas, Wisconsin, and including my State of Indiana could suffer more 
job losses if this tax is allowed to go into effect. In fact, a study 
that has come out produced by the Advanced Medical Technology 
Association analyzed the potential effect of the health care law's 
device tax on employment and the medical device industry, and I quote 
from that report:

       . . . under reasonable assumptions, the tax could result in 
     job losses in excess of 43,000 workers and employment 
     compensation losses in excess of $3.5 billion. That would be 
     a devastating blow to the industry and, of course, to many 
     local economies.

  Beyond that, I have met with these device manufacturers on numerous 
occasions. Essentially, what they have said to me is: We like working 
in Indiana. We like the productivity we are getting. But if we continue 
to be taxed

[[Page 13313]]

and regulated to the point where we are no longer competitive in 
selling our products worldwide, we are going to have to take a serious 
look at moving our production overseas. They said: We don't want to do 
this. We want to stay here. But we need to be competitive because you 
have to understand that a lot of our revenue comes from exporting 
overseas.
  Of course, this is what we want to encourage. Our trade balance is in 
deficit and the more we can export and the more we have cutting-edge 
industries that export enhanced products to overseas customers, the 
better our own economic situation will be here at home.
  At a time when 14 million Americans are looking for work and at a 
time when our country has suffered through 31 consecutive months of 
unemployment above 8 percent, I think we need to take a close look at 
the job creators in our country and determine whether the taxation or 
regulation that is being imposed on them is having a dramatic impact on 
our ability to provide more jobs. The people I have talked to said it 
is having the opposite effect.
  Senator Hatch has introduced a bill to repeal this tax. It was 
controversial when it was first brought forward. I think the Congress 
ought to take a look at this legislation. If we want to provide some 
job-creating opportunities in America, we need to look at the taxes and 
regulations that are stifling growth and the ability to hire more 
people.
  I am a proud sponsor of Senator Hatch's legislation to repeal this 
excise tax. It will, as I said, benefit many States and provide many 
jobs and prevent jobs from leaving American soil. So I encourage my 
colleagues in the Senate to join this commonsense legislation and 
repeal the tax on medical devices. If we want to spur economic growth, 
it is time we take a closer look at the harmful impacts of policies 
that are stifling growth. This is one industry--and I hope to highlight 
more in the future--but one industry that clearly is being penalized 
for being successful. It is hurting our economy, and it is hurting our 
ability to provide job growth.
  I wish the President well. I hope he listens intently. I hope he 
hears the same sentiment I heard as I traveled around the State of 
Indiana. I believe the conclusion is inevitable; that is, taxation, 
regulation, and the policies coming out of Washington bring uncertainty 
to the marketplace, and uncertainty to the marketplace affects consumer 
confidence and affects the confidence of those job creators and 
employers who are frozen in time waiting to see how all this is going 
to turn out. They are fearful of hiring more employees because they do 
not know what the impact is going to be on their payroll and on their 
expenses, and they are waiting for the next regulation to come down 
that might impact their business in a negative way.
  We need certainty coming out of Washington, not uncertainty. I am 
hoping over the next 2 or 3 months, as Congress works to come together 
with a sensible plan to deal with our deficit, we can enact a good plan 
for the future in terms of how to deal with our deficit and we can 
bring some certainty to the future and get our economy back on the 
right track.
  With that, Mr. President, I yield the floor and suggest the absence 
of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BARRASSO. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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