The Doomsday Device Tax

New Mexico Dem Senate candidate Martin Heinrich misleads with defense of medical device tax

Sen. Martin Heinrich (AP)
August 9, 2012

Democratic New Mexico congressman and U.S. Senate candidate Martin Heinrich defended his vote to uphold a job-killing provision of Obamacare on Tuesday, despite his previous acknowledgment that the provision would have negative economic consequences for his home state.

Heinrich defended his vote during an interview with a local reporter by claiming to have opposed a 4.6 percent tax on medical devices but to have supported a 2.3 percent tax, which he deemed "reasonable."

However, the final House and Senate versions of the Affordable Care Act, aka Obamacare, did not have a medical device tax of 4.6 percent.

"He said he helped cut the tax from 4.6 to 2.3 percent. That wasn’t true, and we caught him on that," Heather Wilson, former Republican New Mexico congresswoman and Senate opponent, told the Free Beacon.

At issue is a February 2010 letter signed by Heinrich which suggested that any tax higher than a "zero rate" would impact middle-class New Mexican families. "I am particularly concerned about the impact this tax would have on a facility in my district that manufactures surgical equipment," Heinrich wrote in the letter to then-House Speaker Nancy Pelosi.

Yet Heinrich voted June 7 of this year to uphold the 2.3 percent excise tax on medical device manufacturers that will take effect next year under Obamacare. The GOP-controlled House voted 270-146 to repeal the tax, with Heinrich and all but 37 Democrats in the minority.

Heinrich was questioned Tuesday on his U-turn by a reporter for the Santa Fe New Mexican:

In a telephone interview Tuesday, Heinrich said that when he wrote the letter to Pelosi, he was still concerned that the final health care bill might contain a higher medical-device tax—even though both the Senate and House had passed versions with medical-tax rates far lower than the Senate Finance Committee version.

"Stranger things have happened," Heinrich said. He said he had misgivings about the medical-device tax, but said, "I never expected a zero rate. I thought where we eventually landed was a reasonable plan."

However, as the Santa Fe New Mexican pointed out, the medical device tax stood at 2.41 percent in the version of Obamacare that passed in the Senate in December 2009.

The tax was later reduced to 2.3 percent in March 2010—one month after Heinrich wrote his letter.

The medical device tax is sure to be a hot topic in the New Mexico campaign. New Mexico is home to approximately 300 medical device companies. The medical device tax, in its current 2.3 percent incarnation, may cost up to 43,000 jobs, according to a study commissioned by AdvaMed, the medical device industry’s largest trade group.

"In order to pay for this tax, they’re going to have to cut jobs," AdvaMed spokeswoman Wanda Moebius told the Free Beacon in June. "This is not sound policy, and we’ve said that all along."

"If [Heinrich] thinks it’s reasonable to have a 2.3 percent tax—well, I don’t think there is anything reasonable at all about a tax that will cost American jobs," Wilson said. "He doesn’t want to stray from the party line on this issue. He wants to pursue his left-wing ideology. That’s who he is. He made that crystal clear."

The Heinrich campaign did not return a request for comment.