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McConnell’s Obamacare Tax Repeal Stalls in House

House Republicans appear unlikely to move a repeal of Obamacare’s medical device tax as a standalone bill, according to multiple GOP sources.

This could disappoint Senate Minority Leader Mitch McConnell. The Kentucky Republican is lobbying House GOP leaders — both publicly and privately — to act in the wake of the Senate’s overwhelming, though nonbinding, bipartisan vote to repeal the tax, which functions as a key funding mechanism for President Barack Obama’s Affordable Care Act. That vote, passed as an amendment to the nonbinding fiscal 2014 budget resolution, was 79–20 for repeal, with 33 Democrats voting in favor.

“The House is not ready to send any tax vehicle to the Senate right now,” a Republican lobbyist with relationships on both ends of Capitol Hill said.

Some House Republicans have signaled support for moving the repeal of the medical device tax on its own, believing that the time is right to strike down the key component of Obamacare as they seek avenues to dismantle the law. House Republican leaders have yet to weigh in on the matter publicly, as the Senate vote occurred just before the recess and after the House had left town.

In addition to the policy implications of repealing the medical device tax, McConnell hopes to put Democrats running for re-election in 2014 in a political bind. Even some liberal Democrats, such as Sen. Al Franken of Minnesota, have called for repeal because they fear the levy would kill jobs in the medical device manufacturing industry. There is some speculation that House Majority Leader Eric Cantor, R-Va., could be sympathetic to McConnell’s pitch.

But some leading House Republicans, particularly Ways and Means Chairman Dave Camp of Michigan, oppose moving the repeal as a standalone bill. Camp and those who agree with him are committed to pushing through the repeal as a part of comprehensive tax reform legislation, which the Ways and Means panel is in the process of writing.

“The chairman is focused on tax reform and supports repeal of the medical device tax. He is committed to repealing the tax in tax reform,” a Camp aide told CQ Roll Call on Wednesday.

So, why wouldn’t these House Republicans be eager to run a tax reduction bill that would ding Obamacare, surely pass their chamber and force some vulnerable Senate Democrats to choose between taking another whack at the Affordable Care Act or protecting the law at the potential cost of electoral peril? To begin with, they don’t trust Senate Majority Leader Harry Reid, D-Nev., to bring the bill to the floor for a vote.

Additionally, some House Republicans fear, legitimately, that Reid might gut and amend the bill, turning it into a Democratic shopping cart full of tax increases. Constitutionally, tax measures must start in the House, but there’s nothing preventing Reid from stripping and replacing a tax bill’s contents. Or, Reid could keep the medical device tax repeal but load up the legislation with enough revenue raising poison pills to either sink it or turn the tables on Republicans by forcing them to vote on legislation with politically uncomfortable measures.

And although some in the GOP believe the nonbinding Senate vote proves that Democrats support repealing the medical device tax, one GOP operative argued the opposite.

This Republican, who closely follows developments surrounding the Affordable Care Act, said Democrats might now be less likely to support a repeal bill that is binding, as they could point to their previous vote as evidence that they back doing away with the levy but refuse to allow the Republicans to play politics with the issue, or a similar excuse.

This insider believes repeal would have faced better odds in the Senate if the first vote on the matter was real. “The device guys kind of screwed up their strategy because they gave Democrats a free vote that didn’t mean anything.”

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