House Taxes Committee hearing previews fall campaign theme
The U.S. Supreme Court ruling that upheld President Barack Obama’s Affordable Care Act resulted in much gnashing of teeth among Republicans. While they didn’t appear to relish the affront to their ideology in the 5-4 decision, the ruling had the politically valuable effect of keeping a hot-button issue alive for the campaign season.
Despite the relatively low public profile of legislative races in the dog days of summer, Republicans are starting to prime the issue for this fall’s general election. On Monday the House Taxes Committee convened in the State Office Building in St. Paul to discuss the tax implications of the legislation. Much of the hearing was a somnolent recitation of the tax provisions in the Affordable Care Act. But committee members from both sides of the aisle at times bandied about partisan jabs that suggest it’s a ripe topic for the campaign.
After the hearing, Rep. Pat Garofalo, R-Farmington, said the requirements of the Affordable Care Act will place added financial burdens on families and small businesses, justifying it as a central plank on the campaign agenda.
“To the degree it kills jobs in Minnesota, it’s absolutely the most important issue,” Garofalo said. “If we can repeal over-burdensome federal legislation that can help create jobs in Minnesota, why would anyone be against that?”
The hearing can be viewed as an opening salvo in what Republicans are planning to take to Minnesota voters. Senate Health and Human Services Chair David Hann, R-Eden Prairie, said on Tuesday said he met with roughly 500 insurance agents from the Twin Cities area who were crying foul over the legislation.
“I think it’s a huge political problem for the Democrats, because they are the only ones who support it,” Hann said. “No Republicans support it. Many Democrats opposed it as well. It’s a political problem that Democrats have created, and I think the public is unhappy about it.”
In response to the attacks on the Affordable Care Act, DFLers like House Assistant Minority Leader Erin Murphy, DFL-St. Paul, are pointing out that problems with health care in America predated and necessitated the new law.
“I think they are hoping that they can engage this issue one more time for their electoral benefit,” said Murphy, who is a member of the House Health and Human Services Finance Committee. “I think Minnesotans, like a lot of people across the country, are tired of stalemate on the issue. They want us to move forward now that the court has issued its ruling.”
Monday’s Taxes Committee hearing was a showcase of how the Affordable Care Act can generate philosophical clashes between Republicans and Democrats. The hearing featured Republican U.S. Rep. Erik Paulsen, who has been a persistent critic of a revenue source in the legislation that imposes a 2.3 percent tax on sales of medical devices. Several Minnesota-based companies make medical devices like cardiac stents and defibrillators. Paulsen told legislators that the tax “threatens” Minnesota’s high rank in the med-tech industry.
“I believe it is nothing short of a tax on innovation,” said Paulsen, who served 14 years in the state House, including a couple of sessions as majority leader.
Rep. Diane Loeffler, DFL-Minneapolis, argued that the tax is justified because the device companies will get more business as a result of the Affordable Care Act.
“I think we need to acknowledge that while we have a robust [industry] and we’re very proud of our medical device community, they will also benefit by a number of different provisions,” Loeffler said. “With just 10 percent more Americans, 30-some million people, having access to health insurance for the first times in their life, they’re going to have access to the kinds of care that includes these kinds of devices for the first time. We expect that will create a growth factor within the industry that I think everyone will welcome, because we all want someone we care about to have access to these amazing devices.”
Paulsen disagreed with Loeffler that the medical device industry would see an uptick in demand. He said that many recipients of medical devices are older Americans, while most of the people who will gain coverage through ACA are younger.
The traction gained by Republicans in bashing ACA is a matter of political geography, said Carleton College political science professor Steven Schier. Urban DFL strongholds and areas of greater Minnesota where people are in need of health care aren’t particularly fertile ground. The issue could be an important factor, however, in some suburban swing districts where most voters have private health insurance.
“The swing voters who will be concerned about this will be primarily in the suburbs and worried about what it’s going to do their health coverage,” Schier said.
The large and complex health care bill will be a challenge to distill into media-friendly sound bites that will resonate with voters. But Republicans are hoping to attach the legislation to broader concerns about jobs and the economy. In that respect, the Supreme Court’s ruling provided ammunition by decreeing that the federally imposed penalty on people who don’t buy health insurance is legal because it’s a tax.
“Is there any question in anybody’s mind, that if when this had been introduced three years ago, if the Democrats in Congress said, ‘Here’s a huge tax we want to pass on our public to nationalize our health care system’ — is there any doubt that would have been thoroughly rejected?” Hann said. “It never would have passed Congress.”
Republicans also contend that the legislation’s fees on health insurance policies will drive up premiums. Providing DFLers with fortitude on subject are years’ worth of health care statistics regarding uninsured people in Minnesota. Murphy noted that the tax on people who don’t buy health insurance will only be levied on a subset with the means to buy insurance who opt not to do so. Murphy also said health care premium increases are driven by many factors, including the cost of caring for the uninsured.
“The more people that are uninsured, the more pressure there is on the people who are insured,” Murphy said. “And the way to solve that is to make sure people have coverage.”