Guest column: I agree with President Obama – keep manufacturing jobs in America


paulsen mug shot


I agree with President Barack Obama.

During the past year’s campaign, the president stated his support for keeping domestic manufacturing jobs in America. As he said in the first presidential debate, “That’s why we have to invest in advanced manufacturing. That’s why we’ve got to make sure that we’ve got the best science and research in the world.”

I agree with the president that we need to invest in manufacturing, and research and development. And, it is my sincere hope that he will work with members of Congress on both sides of the aisle to institute policies that will spur innovation, increase job creation, and keep manufacturing jobs here in America.

A key sector where America’s global leadership is threatened is the medical technology industry.  While other countries, especially Asian and European nations, are providing tax incentives for medical technology firms to do research, invest, and manufacture, U.S. policy makers are actively driving American innovators overseas.

Unfortunately, some of the president’s policies are already causing dramatic jobs losses in medical innovation.

Over the past two years, news headlines have highlighted thousands of jobs being eliminated from this dynamic industry: 1,050 from Stryker, 1,000 from Medtronic, 700 from Abbot, 595 from Covidien, 450 from Zimmer, 300 from St. Jude Medical, 275 from Welch Allyn. In Minnesota alone, 400 device companies, which sustain 35,000 high paying jobs, could be in jeopardy.

The question must now be asked: What is driving these jobs away?

The answer is a new $30 billion tax on medical devices in the president’s new health care law. It’s a 2.3 percent tax on revenue, not profit, and equates to a $30 billion burden being placed on the backs of medical technology companies around the country.

A new study by Ernst & Young, released in mid-November, shows that the new excise tax will actually add another 29 percent per year in taxes to the amount the medical device industry already pays in federal income tax. Estimates from Congress’ bipartisan Joint Committee on Taxation already show that medical technology companies will pay about $8.7 billion in overall federal income taxes next year, with the device tax adding another $2.5 billion to that tab.

The reality is if the tax goes into effect, the medical device industry will face one of the highest effective tax rates of any industry in the world.

This tax will cripple job creation in an industry that has become a true success story for made-in-America manufacturing. The layoffs are proof that companies are no longer investing and innovating here in America. Instead, they are cutting operations, and in some cases, sending those jobs overseas.

American manufacturers need a government that will partner with them to bring jobs back home and jump start our economy, not a government that builds barriers and prevents growth.

I know that medical device innovation and high-tech manufacturing is important to Minnesota, and that’s why I’m working across the aisle to stop this onerous tax. The House has already passed legislation to repeal the medical device tax – with the bipartisan support from the entire Minnesota delegation. But, the bill still waits for action in the Senate.

It is essential that U.S. medical device manufacturing remains a vibrant, innovative and successful industry that employs thousands of Americans. During the campaign, President Obama said he believes in American manufacturing. I do too.  The president has an opportunity to help American manufacturing by working together with Congress on pro-growth policies that will prevent jobs from going overseas and help create new jobs here at home. It’s my hope that the president recognizes that the medical technology industry is one of those opportunities and will support the repeal of this burdensome tax.

Erik Paulsen is the Republican congressman representing Minnesota’s Third U.S. Congressional District.

  • Joleen Chambers

    Our elected leaders must rethink in their endorsement of corporate interests over public health. Failed implanted medical devices are a huge taxpayer expense. Joint replacements have become the #1 expenditure of Medicare and on 7/29/2011 the Institute of Medicine (in an FDA-commissioned study) determined that the majority of these implants were marketed through a flawed legislative process called 510(k). “Revision” surgeries are extremely expensive and subject patients to untold dangers including job and home loss. Cheerleading for more “innovation” may be profitable to legislators and the industry, but without balance, it will be a drag on our economy. Congressman Erik Paulsen’s constituent services to patients with failed implants: FDA MedWatch #5009052 -silence-

  • Pingback: Paulsen Vocal About Medical Device Tax; Quiet About Deadly FDA Cuts » MN Political Roundtable()

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