To amend the Internal Revenue Code of 1986 to repeal the excise tax on medical devices.

Mr. Speaker, I thank the gentleman for yielding me the customary 30 minutes, and I yield myself such time as I may consume.

Mr. Speaker, I rise today in opposition to the rule for the underlying bills H.R. 436, the Protect Medical Innovation Act, and H.R. 5882, the Legislative Branch Appropriations Act for Fiscal Year 2013. Frankly, I'm disappointed that the House Republicans continue to bring bills to the House under a closed process that restricts debate and discussion and doesn't allow amendments that could improve the underlying legislation and help forge a strong bipartisan majority.

Mr. Speaker, the Republicans started this Congress with cries to repeal and replace the Affordable Care Act, and yet here we are a year and a half later, this body has voted several times to repeal the bill, but we've yet to see any plans to replace it. And here we are again with another bill to repeal the Affordable Care Act. As far as I can tell, my colleagues on the other side of the aisle have not presented a plan to reduce rising health care costs, to provide health care insurance to 30 million uninsured Americans.

This body, and those who advocate repeal of the Affordable Care Act, it should be incumbent upon them to talk about what we should replace it with to prevent the rising cost of health care from being an increasing burden on American businesses and American families. The motivations for repealing the Affordable Care Act are weaker and more blatantly political than ever, especially after several votes of this body to repeal the Affordable Care Act.

There are many provisions of the Affordable Care Act that the American people broadly support, including young adults staying on their parents' health insurance until they're 26, including creation of exchanges. Seniors throughout the United States are already benefiting from the Affordable Care Act's elimination of the Medicare prescription drug doughnut hole. In fact, in 2011, over 5.1 million Medicare beneficiaries saved over $3.2 billion on prescription drugs thanks to the Affordable Care Act.

States across the country, including my home State of Colorado, are enthusiastically implementing health insurance exchanges in a bipartisan way that will help us reduce health care costs and expand access to high quality, affordable health care. So why are we still here talking about repealing the Affordable Care Act instead of focusing on areas where we share common ground?

Unfortunately, the Protect Medical Innovation Act has been brought under a closed process which prohibits Members from being able to offer any amendments to this collection of four different bills. If my colleagues made an effort to compromise on health care proposals, there might actually be a chance to see legislation pass both Chambers with broad bipartisan support and signed by the President. This specific bill already has a veto threat from the President, and none of my colleagues on my side of the aisle were consulted with regard to a method of paying for this particular set of changes.

Instead, the Republicans have chosen to cobble together three unrelated bills that do three totally different things, along with a very partisan offset with no opportunity to revise these bills; no opportunity for us to do our job as legislators, to amend these bills; no opportunity for us to work to forge a majority around commonsense proposals that can improve health care and create jobs.

Let's take a look at what's in this diverse package of bills.

Now, the original Protect Medical Innovation Act, that was the original bill before these three other bills were added and before this payment mechanism was added, would've repealed the excise tax on the manufacture or import of certain medical devices, one of the methods of funding the Affordable Care Act.

Now a solid group of Members support repealing the tax. In fact, this tax impacts companies in my district like ZOLL Data Systems. And I hope we can have a straight up-or-down vote on this particular provision of this bill. But instead, it has been cobbled together with two unrelated bills and an unrelated method of paying for it.

Similarly, there's solid support for two other pieces of legislation that are contained in this bill. One bill would have repealed the Affordable Care Act's prohibition on using HSAs and FSAs to purchase over-the-counter drugs, and another would have allowed individuals with FSAs to redeem money left in their accounts at the end of the year.

Now, we all have our different opinions about these bills. I personally support allowing HSAs and FSAs to purchase over-the-counter drugs, and I personally oppose the FSA measure because I think that people should be able to spend the money that's left in their FSAs by the end of year; otherwise, what's the purpose of an FSA? It kind of ceases to exist and simply becomes a tax shelter if it's not dedicated to health.

But the fact of the matter is, under this rule, no Members of this body will be able to express their support or opposition to any of these bills in particular because they've all been cobbled together into an incoherent mess of a bill which this rule is trying to jam down the throat of this body. We should have brought up these bills one at a time and found a reasonable offset. Instead, the Republicans have chosen to place the burden of paying for this cluster of bills on the backs of middle class American families.

Now, there's a number of alternative ways that we could have paid for these bills. The most obvious one would have been repealing oil and gas subsidies. This was an offset that was included in the Democratic substitute which the majority failed to even allow to come up for a vote by this body. That offset would have provided $32 billion in reductions of oil and gas subsidies over 10 years, making sure that the government doesn't pick winners and losers in the energy space, allowing oil and gas to compete on a level playing field with all other energy resources instead of being designated as a recipient of taxpayer money and government subsidies. Now, that particular offset would have not only paid for eliminating the medical device tax, but also reduced our deficit by $3 billion.

Today I introduced a bill, H.R. 5906, which would repeal the medical device tax and replace those lost revenues by eliminating tax loopholes and subsidies for oil and gas companies. Personally, I'm supportive of other ways of paying for the medical device tax as well. Let us work together to find a way to pay for any changes in the Affordable Care Act that don't fall squarely on the back of middle class American families.

However, Mr. Speaker, instead of a thoughtful offset, the Republicans have chosen to dig into the pockets of low- and middle-income Americans to pay for this bill. So let's look at how this bill would affect American families.

According to the Joint Committee on Taxation, this proposal would force 350,000 people to lose their health care insurance. Yes, that's 350,000 people less that would have health care insurance.

Now, how devastating and misguided is this? Let's take an example. Let's take a hypothetical family of four in Colorado, in Ohio, in Florida, in Pennsylvania. Let's say their household income is $36,000 a year. They're working hard to stay in that middle class. It's getting harder and harder. The family income, $36,000 a year; father and a mother. The mother has been out of work for 3 years. The total family cost of health care insurance is $12,000. Now, let's say the mother finds a job midway through the year. She's able to go back to work and she earns an additional $36,000 for her family, bringing that family of four's earnings to $72,000. They're fighting hard to stay in that middle class to afford their kids' college education. Now, under this bill, at the end of the year, that family is sent an additional health care bill for $5,160, a tax increase of over $5,000 for that middle class American family. Now, that's more likely to make it less of an incentive for that woman to get the extra job. What's the extra incentive to work if the government is going to stick you with a huge tax bill just for trying to support your family?

Let's take another example. A family of four in Michigan, in Nevada, a father and mother with two young children. Let's say that the mother doesn't work outside the home. They're earning $36,000 a year and the family is struck with tragedy. The mother passes on early in the year leaving the father to support the kids. He takes a second job, as any good father would do, and is able to earn an additional $18,000 during the year working a 40-hour-a-week job and working a 20-hour-a-week job to put food on the table. Now, that increases that family's income to $54,000 from $36,000. And what does this Republican tax increase do? Well, it presents them at the end of the year with an additional $3,330 tax increase, a $3,330 tax increase for a father who's just trying to put food on the table for his kids.

We can do better. The bill we are considering today would actually increase the tax hike on families by removing the restriction on the amount that families are required to pay. This has the perverse incentive of discouraging families from working and taking on additional jobs and working hard to get promoted. It takes away the incentive to perform well at your job and get a promotion or raise. Frankly, this payment mechanism encourages people to remain in poverty and on government assistance rather than striving to do better and earn more. This Republican bill punishes work, plain and simple, and is a huge tax increase on the middle class.

Now, Mr. Speaker, if we want to repeal the medical device tax, let's discuss how to pay for it. If some people in this body think protecting subsidies for oil and gas companies is more important than getting rid of the medical device tax, well, fine, let's find another way to do it. But, unfortunately, this approach before us today isn't a serious approach to reducing the deficit. It's an approach that the President would veto, it's an approach that puts a huge tax burden squarely on the shoulders of working families in this country, and it doesn't help get Americans back to work.

This proposal is based on politics, plain and simple, not on sound economic policies that are good for the middle class, good for the medical device industry, and good for America.

This underlying rule also makes in order the Legislative Branch Appropriations Act for 2013. Now, that's an act that funds Congress itself and its supporting agencies. In these times of fiscal austerity, everyone--especially Members of Congress--should be tightening their belts.

This bill provides a 1 percent reduction from last year's spending bill. Now, I am also heartened that it still ensures congressional support agencies have the sufficient funding they need to function so that we in this body can do our job.

But even while the House's budget has been cut over 10 percent over the last 2 years, the House majority has chosen to spend scarce resources that the taxpayers have appropriated to us to defend the constitutionality of the Defense of Marriage Act, which bars gay and lesbian servicemembers, veterans and their spouses from securing the same benefits offered to straight military couples.

As President Obama has determined, the law is simply indefensible constitutionally. And yet to date, this body, out of this bill, this Legislative appropriations bill, has spent three-quarters

of a million dollars of taxpayer money on fancy lawyers defending this discriminatory and offensive law. This waste of tax dollars is especially troubling given the recent First Circuit decision which found that DOMA is unconstitutional.

Mr. Speaker, I can't support these underlying rules. It's beyond troubling to have a closed rule, not allowing amendments and thoughtful input from Members of both parties on four separate pieces of health care legislation that completely shuts out Republican ideas and Democratic ideas to improve the Affordable Care Act, improve job growth in this country, and help get our economy back on track.

I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Altmire).

Mr. Speaker, if we defeat the previous question, I'll offer an amendment to the rule to make in order the Connolly amendment, which proposes that Members who repeal Federal benefits for their constituents must forfeit such benefits themselves. Why should Members of Congress get special benefits that we deny to our own constituents?

To discuss our proposal, I yield 3 minutes to the gentleman from New Jersey (Mr. Andrews).

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

I yield myself such time as I may consume.

In response to my colleague, Mr. Roe's discussion of very expensive medical devices and equipment, part of the justification for looking at revenues for medical devices is, through making sure that more Americans have access to insurance, we're able to increase demand and compensation for procedures that involve costly medical devices. This is a way that can actually drive business and job growth for the medical device industry by having more people covered by insurance. The Affordable Care Act will cover millions and millions of more Americans to ensure that they have access to medical devices, driving consumption and purchase of medical devices as well.

Look, there's plenty of ways that we can talk about to pay for this bill. Unfortunately, this closed rule allows for no discussion, other than the extremely partisan, middle class tax increase, which the Republicans have proposed to pay for this bill.

Personally, I've also supported and continue to support looking at a soda tax. Rather than tax something that makes people healthier and improves public health, like medical devices, why not tax something that makes people less healthy, like corn syrup with food coloring and water, a little bit of caffeine added, no nutritional content, increases diabetes, increases obesity, tooth decay, even been shown to hurt kids' performance in schools. And a study by Health Affairs, a nationwide tax of 1 percent on sugary drinks would actually go a long way towards being able to pay for repealing the medical device tax.

So look, these are decisions that our constituents send us here to make. How do we want to pay for things? If we don't want to tax medical devices, are we going to tax the middle class instead, as this proposal will do?

We talked about a family of four in Ohio, family of four in New York, that would pay over $5,000 a year in extra tax just because the mother went back to work, just because one member of the family might have passed away in a year, sticking them with an enormous tax bill? This tax-and-spend Republican majority continues to advocate tax after tax after tax increase directly targeted to middle class and working American families.

Look, let's evaluate how we want to pay for health care in this country. Health care is important. Health care is expensive. If you have better ideas than the Affordable Care Act--better ways to reduce health care costs for businesses, help families access health care-- let's get them on the table in an open process and talk about what we want to do to help drive down costs.

But this cobbled-together set of bills will only decrease access to health care in this country. It will undermine the very demand for the medical devices that are so important to job growth and creation in this country. It will undermine the incentive of middle class families to try to improve their stations in life--to take on a second part-time job, to seek a promotion at work. It's very contrary to our American values that hard work gets you ahead in this country. If you work hard and if you play by the rules, you have a shot in this country, and this cobbled-together set of bills is an affront to that very concept that makes me so proud to be an American.

I reserve the balance of my time.

I yield myself such time as I may consume.

An executive summary of a report by the Bloomberg Government is entitled ``Medical Device Industry Overstates Tax Impact,'' which was put together by health care policy analysts.

This study calls into question the assumption that several of my colleagues on the other side have indicated that the medical device tax results in the loss of 43,000 jobs. After investigating, the Bloomberg Government officials found that this figure was based on the hypothetical assumptions of a 10 percent reduction in domestic employment resulting from manufacturing moving their operations offshore. So it was just based on guesswork. It was said, Well, how many jobs do we want to say this would cost? Let's just say 10 percent.

Then they just put it down. There was no analysis. It was simply based on a guess, which I can just say with the same amount of backing that it will create 10,000 jobs or that it will eliminate 5,000 jobs or that it will create 20,000 jobs. You can say whatever you want, but there is no scientific analysis that leads to that conclusion.

In fact, throwing 350,000 Americans into the ranks of the uninsured as this cobbled-together set of bills would do and reducing the number of insured Americans by 350,000 is certain to reduce the demand for medical devices. It is certain to reduce job growth and to hurt many of the companies that are complaining about the medical device tax.

Again, if we can find a way to pay for it that doesn't throw over a quarter million Americans out of health care

insurance and that doesn't increase taxes for a family making $72,000 a year by over $5,000, let's do it. We can. We can look at taxing things that make people less healthy rather than taxing things that make people more healthy. We can eliminate tax loopholes and subsidies for the oil and gas industry. We can discuss eliminating agriculture subsidies.

There are a lot of great ideas that Republicans and Democrats have to help replace the revenue that might be lost under this proposal; but under this closed rule, both Republicans and Democrats are prohibited from bringing any ideas forward about how to pay for this bill other than with an enormous tax increase on the middle class, throwing Americans off the insurance rolls, which actually reduces the demand for medical devices and will cost jobs in this country under this bill.

I reserve the balance of my time.

My colleague from Oklahoma said, if you tax something, you get less of it. Under this bill, we tax work, and we tax middle class families taking a second job or getting a promotion at work. This bill will force families to stay on the government payroll. It will force people to continue to get their benefits because, if they try to work harder, you're increasing their taxes.

Yes, if you tax something, you get less of it. This bill will result in people working less, having less of an incentive to work, less of an incentive to lift yourself up and to get off the government subsidies, less of an incentive to take a second job, less of an incentive to get a promotion. Why would we put squarely the burden of paying for this on people who just want to work harder to get ahead?

If you tax something, you get less of it. This bill in its current form results in less work, fewer jobs, fewer chances for middle class families to stay in the middle class, fewer chances for aspiring middle class families to reach the middle class.

I reserve the balance of my time.

Mr. Speaker, my colleague ended his remarks by saying don't raise taxes on people making under $250,000. This bill increases taxes on people making $40,000, $70,000, even as much as $90,000. That's what it is--it's a huge middle class tax increase.

With that, I yield 2 minutes to the gentleman from New York (Mr. Crowley).

Why should Members of Congress get special benefits because they're Members of Congress that they vote to deny to their constituents? Thankfully, if we defeat the previous question, Mr. Connolly will bring forward an amendment that will address this issue.

With that, I am proud to yield 2 minutes to the gentleman from Virginia (Mr. Connolly).

I have no additional speakers on this huge Republican middle class tax increase. I would like to ask my colleague if he has any remaining speakers. I am prepared to close.

I reserve the balance of my time.

I would like to inquire if my colleague has any remaining speakers, and I would like to inquire of the Speaker how much time remains on both sides.

I yield myself the remainder of the time.

Mr. Speaker, at a time when millions of Americans are still out of work, here's yet another bill on the House floor that does nothing to create jobs or get our economy back on track.

This House has already passed repeals of the Affordable Care Act several times, and here we have another bill that takes three bills and lumps them together with a controversial payment mechanism that's a huge tax increase on the middle class, and it drives Congress further from consensus and sound governance.

Again, we're spending another legislative day repealing parts of the Affordable Care Act that the President has said he would veto with no opportunity for Members of either party to offer amendments or substitutes.

Instead of seeking a bipartisan agreement on reducing health care costs or even doing anything to further the repeal of the medical device tax, the Republicans have made it impossible for many to support this bill by combining a number of unrelated bills with a huge middle class tax increase. This is not the transparent one-bill-at-a-time House that the American people deserve.

My colleagues are once again passing on an opportunity for bipartisan reform in favor of simply scoring political points.

Mr. Speaker, I ask unanimous consent to insert the text of the amendment into the Record, along with extraneous material, immediately prior to the vote on the previous question.

Mr. Speaker, I urge my colleagues to vote ``no'' and defeat the previous question so we can make sure that Members of Congress don't receive special benefits that we would deny to our constituents.

I urge a ``no'' vote on the rule, so we can avoid this enormous Republican middle class tax increase, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 679 and ask for its immediate consideration.

For the purpose of debate only, I yield the customary 30 minutes to the gentleman from Colorado (Mr. Polis), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

General Leave

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks.

House Resolution 679 provides for consideration of H.R. 436, a bill to repeal the 2.3 percent excise tax on medical devices enacted as part of the President's health care law. It also provides for a structured rule for consideration of H.R. 5882, the Legislative Branch Appropriations Act. The legislative branch appropriations rule is typically the only structured rule in the appropriations process, and we are continuing that bipartisan tradition here today.

We are voting here today to stand up for more than 423,000 American employees and the health of millions that their work protects. A new $29 billion tax on medical devices, passed as part of the President's health care package, threatens to stifle innovation in the health care industry. If medical device manufacturers are punished with this new tax, we are all punished. Our health is punished. Our parents' health is punished. Our kids' health is punished.

Yesterday, I talked with one of my constituents, Dan Denson, who owns a medical device company in Summerville, South Carolina. He shared two concrete examples of how this new tax will hurt his company, the health care industry, and most importantly, it will hurt those in need of medical care.

For Dan's home health company the profit margin is about 10 percent. That profit is used to pay their employees, improve technology, and expand when it's needed. So if you cut into it by 2.3 percent, you're cutting into their ability to create better devices that then provide better care for patients.

As Dan put it, ``I can assure you that any additional impact to our cash flow will reduce the money available for innovation.

Dan also talked to me about his fellow medical device companies who make the hoses for oxygen tanks and other devices which make life bearable for so many Americans. They are absolutely dependent on these devices. And what happens when we add a 2.3 percent tax to these smaller companies? Well, these companies work on a margin of around 3 percent. So you don't have to be a math major to figure out that when you have a 3 percent profit margin and you have a new 2.3 percent tax, you are pretty close to zero.

You simply cannot afford to run a business in this environment. You certainly cannot start a new business in this environment. We're not only hurting our medical device companies, we're also discouraging new entrepreneurs and innovators from being able to enter the ring.

I felt it was so important to share Dan's thoughts today, as it shows in clear terms how this new tax will not only affect Americans' wallets, but it could impact the health of Americans in this country.

If our medical device manufacturers cannot continue to adapt and move forward with new and better technologies, our medical care system will slow down right alongside it.

Because of innovation, life expectancy in the United States has increased by more than 3 years from 1986 to 2000, and the burden of chronic diseases representing more than 70 percent of the overall health care cost has been reduced. This tax affects devices ranging from cardiac defibrillators to artificial joints to MRI scanners, or, in plainer terms, the very devices that identify and treat patients in their time of need, and even those devices that could save lives. These days, technology is improving every single day.

Why in the world would we want to put our innovators at a disadvantage? Why in the world would we want to take another $29 billion worth of investments out of our future, out of our health care industry and put it in the hands of this government? There's no good answer to these questions, and there's no good reason for another new tax.

Once again, Mr. Speaker, I rise in support of this rule and the underlying legislation. I encourage my colleagues to vote ``yes'' on the rule and ``yes'' on the underlying bill, and I reserve the balance of my time.

Mr. Speaker, I find it quite interesting and almost hilarious that my friend to the left would talk about tax increases when in fact embedded in this health care bill is $123 billion in new taxes on property owners. Really? $123 billion of new taxes on property owners in addition to the $29 billion new tax they were talking about today, in addition to eliminating $500 billion from Medicare in order to fund this health care plan.

I think the conversation about tax increases is a conversation we could spend a day on, and we'd be happy to have that conversation. But today, I'm going to yield 2 minutes to the gentleman from Texas, Chairman Sessions.

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Nugent).

Mr. Speaker, I yield 3 minutes to the gentleman from Tennessee (Mr. Roe).

I yield the gentleman an additional 30 seconds.

Mr. Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Dent).

I yield the gentleman an additional 15 seconds.

Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Lankford).

Mr. Speaker, we keep hearing consistently that somehow a tax that isn't a tax is now considered a tax, so the notion of recapturing overpayments from health care subsidies should not be considered a tax. It should be considered being honest and fair. So let me say it one more time: that requiring people to return money not correctly given to them is not a tax increase; it is a matter of honesty and integrity.

Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Mulvaney).

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Renacci).

Mr. Speaker, I yield 1 minute to the gentleman from Indiana (Mr. Rokita).

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Walsh).

Mr. Speaker, I yield myself the remaining time.

My assumption is my friends to the left truly believe if you say it often enough, it might become true. Even if it doesn't become true, if you say it often enough, perhaps someone watching will assume that the words being spoken are somehow true.

We've heard it several times in the last hour, things that have been said over and over again because we are obviously once again in an election year. After hearing the arguments made by the other side regarding the previous question, there is no doubt that we are in an election year.

To clarify, any future changes in benefits to Social Security or Medicare would also and always apply to Members of this body. There are no exceptions, Mr. Speaker, no, not one exception whatsoever. There are no carve-outs in the law giving special treatment to Members of Congress under Social Security or Medicare.

But if you say it often enough, perhaps someone, somewhere watching somewhere in this Nation will come to the conclusion that it must be right. Let me say it one more time.

Members of Congress will comply with the law as it is on Social Security and Medicare.

Secondly, we have heard consistently over and over again--and this is another part of that alternate universe that doesn't exist unless you want someone to believe something that is simply not true--that somehow recapturing overpayments of health care subsidies is now considered a tax. I would say that at a time when we face a $16 trillion debt, we cannot afford to not recapture all the money owed to the Federal Government.

My friends on the left want people to believe that if you recapture the dollars that were given inappropriately that somehow, some way this becomes a tax increase. Let me say it just in case folks listening didn't understand the words that I was speaking.

Requiring people to return money not correctly given to them, this is not a tax, and it certainly is not a tax increase. It is simply a matter of honesty and integrity.

Mr. Speaker, we're talking about the health care bill that took $500 billion from Medicare. We're talking about the health care bill that takes $500 billion out of the pockets of everyday, average middle class Americans in the form of tax increases. There is one tax increase on those folks who own property, $123 billion through a new 3.8 percent tax. Today we find ourselves in the position of repealing a $29 billion medical device tax because the people who need the medical devices will end up paying that tax.

I think we are in a position today, Mr. Speaker, to make sure that over 423,000 Americans who are employed in this country are able to continue to work. I believe that we are in a position, Mr. Speaker, to ensure that the

health care of millions of Americans continues to be a critical part of the discussion.

Mr. Speaker, we are in a place to make sure that new taxes, $29 billion of new taxes, don't continue to destroy American jobs.

Mr. Speaker, I urge my colleagues not only to vote for the rule but to vote for the underlying legislation.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. Speaker, today, once again, we're on the floor of the House of Representatives with our friends on the other side of the aisle arguing about how we tax the American people, how if we're going to take this tax out we've got to replace it with another tax. Good gosh, aren't energy prices high enough already? Why do we want to pass that on to consumers and make gasoline more expensive? It does not make sense, and that's why we are here today to repeal a tax.

Mr. Speaker, what is the tax we're talking about? It is a tax on business, on high tech. It is on medical devices that have allowed America to lead the world in solving problems, to give people medical devices, things that will make their lives even better.

Mr. Speaker, I received a letter from Walter J. Humann, president and CEO, OsteoMed. He came and met with me at my office and then sent me a letter. Here's what Mr. Humann said--and I believe he represents not just the industry, but thousands of people, patients also who rely on high-tech and medical devices that would be without. He said:

In addition to challenges with the FDA and reimbursement,

this 2.3 percent excise tax--which is on gross sales, whether

or not a business has any profits or not--will directly

impact our ability to create new jobs, invest in research and

development and effectively compete in a global marketplace.

Further, he says:

It should be noted that OsteoMed is also aggressively re-

directing its business focus to international markets that

provide a less cumbersome and lengthy regulatory pathway with

revenue streams that are not subject to the medical device

tax . . . immediately saving 2.3 percent in the process. In

the past month, OsteoMed initiated the search for sales

managers in China and the Middle East to supplement recent

managers hired in Korea and Italy.

Mr. Speaker, this is not just a tax. It is not just making it more difficult for employers to hire people. But it will stop America's innovative-ness to compete in the future.

OsteoMed,

Addison, TX, June 5, 2012.

Hon. Pete Sessions,

U.S. House of Representatives,

Washington, DC.

Dear Representative Sessions: Thank you for taking time to

visit with me last week regarding OsteoMed and my concerns

about the significant ``headwinds'' we face, especially

related to the 2.3% medical device tax that is scheduled for

implementation in 2013. On behalf of OsteoMed's 400

employees, I thank you for your support of H.R. 436, which

would repeal this onerous provision that otherwise will

negatively impact innovation and job creation at a time when

we can least afford it.

As president & CEO of OsteoMed, a dynamic, 20 year old

surgical device manufacturing company based in your district,

I confront the challenges that America's innovators face

every day. In addition to challenges with the FDA and

reimbursement, this 2.3% excise tax--which is on gross sales,

whether or not a business has any profits--will directly

impact our ability to create new jobs, invest in research and

development and effectively compete in the global market.

OsteoMed formed a new subsidiary company a couple of years

ago to develop an innovative spine product that greatly

simplifies spine fusion surgery and improves patient

outcomes. OsteoMed launched this product last year which

quickly grew to almost $5MM in sales in 2011 and currently

employs a number of highly skilled, high paid individuals.

Due to the significant upfront investment and on-going

development costs, this new company is not projected to make

a profit in the near future but is nevertheless subject to

the device tax which will further delay this subsidiary's

success. As a result, OsteoMed has now delayed additional new

product developments and personnel in order to make ``ends

meet'' and achieve the returns initially envisioned when this

company was created.

OsteoMed's core business manufactures surgical implant

systems for use in craniofacial, neurosurgical and small bone

orthopedic (upper and lower extremities) surgeries. These

systems require extensive, specialized instruments that are

typically not sold, but are used to implant the devices that

drive OsteoMed's revenue stream. The device tax will not only

tax gross product revenues, but my understanding is it will

also tax the instruments OsteoMed must invest in and place

into hospitals at no charge thereby further reducing my

company's profit opportunities and forcing expense reductions

in other areas in order to achieve our profit goals.

OsteoMed's products are sold through a variety of sales

channels and will require a new level of administrative

burden in order to track the ``gross'' revenues defined by

this tax. This requirement, along with the recent challenges

imposed by the Physician Payment Sunshine Act, force

additional levels of administration and non value added

expenses that make OsteoMed less competitive and viable.

The market in which OsteoMed competes is in turmoil and has

become increasingly competitive with many new offshore

competitors. As economics and recent government restrictions

have largely removed surgeons from the surgical device

purchase decision process, hospitals are now forcing

increasingly price concessions. Despite increased raw

material and labor costs, OsteoMed has been unable to raise

product prices over the past several years and is now equally

unlikely to simply pass along the device tax to our

customers.

Like any other responsible business, OsteoMed must

carefully manage expenses in order to make profit and

continue to grow and succeed. In order to cover the shortfall

the new device tax will create, OsteoMed has already started

to implement cut backs in its operations including the delay/

cancellation of new product development projects and the

hiring of additional personnel, including biomedical

engineering positions. It should be noted that OsteoMed is

also aggressively re-directing its business focus to

international markets that provide a less cumbersome and

lengthy regulatory pathway with revenue streams that are not

subject to the medical device tax. . . . immediately

``saving'' 2.3% in the process. In the past month, OsteoMed

initiated the search for sales managers in China and the

Middle East to supplement recent managers hired in Korea and

Italy. Unfortunately, OsteoMed has already started to

effectively trade U.S. jobs for overseas positions as a

direct result of the medical device tax and other

governmental involvement.

The medical device industry not only provides numerous

highly skilled and attractive jobs across the U.S., but it

also pays its workers on average 40% more than the typical

job. We are a vibrant sector of the economy and one of the

few remaining industries that produces a healthy export of

products. Tragically, this industry has now become the focus

of misguided and short-term government intervention and the

growth and continued prosperity of this proud American

industry now faces great hurdles.

Again, I thank you for your service to our country and

specifically for your support of H.R. 436 to repeal this tax

and to help America's innovators continue to improve patient

care and drive job creation. I look forward to your ability

to visit OsteoMed when you are back in Dallas so you can see

firsthand our great employees and the innovative products

they produce to help people around the world. Please do not

hesitate to contact me to discuss this issue or any other

issues impacting the medical device industry.

Sincerely,

Walter J. Humann,

President & CEO,

OsteoMed.

I thank the gentleman for yielding.

Mr. Speaker, I rise today in support of the rule and underlying H.R. 436, the Protect Medical Innovation Act. This bill will make a positive impact in two critical areas: jobs and innovation.

For 40 consecutive months now, unemployment has exceeded 8 percent. Just last week, we received the unwelcome news that unemployment had increased in May from the prior month. We're on the wrong track, and the medical device tax included in the Affordable Care Act will make a bad situation even worse.

According to one industry study, the 2.3 percent medical device tax could result in the loss of 43,000 American jobs, and this is just outrageous. We should be taking steps to create good-paying American jobs, not preserving a tax hike that would ship these jobs overseas.

Let me just put that in perspective, Mr. Speaker. I have a unique observation point as a physician in practice for over 30 years, and let me take you through some innovations that I've seen.

In 1974, I learned how to do laparoscopy, which is where you place a scope inside the abdomen and look, just observe. And that's really about all we could do.

I remember, 1986, my partner and I did the first ectopic pregnancy. That's a tubal pregnancy, where pregnancy has occurred in the fallopian tube, and we were in there trying to get this pregnancy out through a scope. We did not have the equipment to do it.

Today you can take an ultrasound, diagnose this before rupture; and before, most of these were diagnosed after rupture, required blood transfusions, an open laparotomy, and days in the hospital. Today, I'm happy to report that we diagnose almost all of these before they rupture. We take a simple scope, with the new equipment and devices that have been discovered and utilized and developed, remove this, and send the patient home within hours.

I've watched, now, this go from just a rudimentary observation to incredible surgery with the new Da Vinci device--we're able to do very complicated pelvic surgery, prostate cancer surgery, other abdominal surgeries, heart surgeries--that have done many things, have reduced suffering, lowered morbidity, mortality, and we certainly do not need to go in a different direction.

Let me give you a very personal example that happened to me just 8 or 9 months ago.

In September of 2011, I was walking through the airport in Charlotte, North Carolina, when a gentleman arrested. If it had not been for an AED, a medical device, this gentleman would not be here with his family today. We were able to resuscitate him and send him successfully home to his family.

We do not need to decrease this innovation. I've seen absolutely spectacular things that have occurred over the last 30 years.

Also, this legislation is very simple. It does two other things. It allows an individual to use their HSA, which I have, to buy an across- the-counter medication instead of coming to my office, the most expensive entry point into the health care system other than the emergency room, to get a prescription. It's counterproductive. It wastes time for the patient and their families.

I also would certainly support the FSA agreement for letting someone keep $500 of their money.

And letting that individual and that family roll it over so they can use it the next year. Three very simple things and I will close.

Regardless of what you believe in the Affordable Care Act, or how you believe, I urge my colleagues to support this. And I find it a little bit comical that we are fussing about a closed rule on these three simple items when we discussed a 2,700-page health care bill on a closed rule.

It is interesting to talk about an open or closed rule when we are discussing something with the Affordable Care Act. We all know what an open process that it was developed under and how wide open and inclusive that that was.

Let's talk some basic economics with this.

If you tax something more, you get less of it. That's simple economics. Apparently, somehow there is a desire to get less medical innovation. If we go to the medical innovators--the people with the latest devices, the newest devices, the best devices that are getting Americans healthier, that are providing a better quality of life for people from infants to senior adults--and then tax them more, we are discouraging them from future innovation and from creating the next products that create the next big medical wave on it.

Currently, the best medical innovation in the world is happening in the United States of America. We want to keep it that way. We talk a lot about: Why are we losing manufacturing jobs? Why are manufacturing jobs going around the world? I'll tell you why we're losing manufacturing jobs. It's because, every time you turn around when you're in a manufacturing segment, you've got a Federal regulator in your building who is checking out something else. Whether it's your paperwork or your process or your people, they are constantly checking everything else. We also have this very high corporate tax structure. We have the highest in the industrial world. Now we're taking it to the medical device folks and making it even higher and making it even harder.

What we need to do is have the best medical innovation in the world here, but we don't do that by punishing those companies for doing it here. If we want companies to go overseas and to do the best innovation in the world somewhere else, then we should continue to raise taxes on them. This solves that. This keeps it here. It keeps the companies here and keeps them from relocating and offshoring. It keeps premiums from going up. As the medical device cost goes up--guess what?--insurance premiums go up as well, as well as dental costs for dental devices.

This is just another example of picking winners and losers and finding an industry that is successful and saying, Let's tax them more so we can move that money somewhere else. I'll tell you what. Let's just have the best medical innovation in the world continue to be here. Let's take care of that medical device tax and clear it out as of today.