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Medical device makers hoping new tax is repealed during shutdown debate

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A tax on medical devices that has been a high-profile political football in the broader congressional clash over the nation's budget and subsequent government shutdown is still in the air.

At issue is a 2.3 precent tax on medical devices that went into effect at the first of this year. The tax was designed to help pay for the Affordable Care Act to the tune of $29 billion over about 10 years.

The tax is a hugely important issue to states including Minnesota and Massachusetts, home to major medical device producers, NPR notes in a story that examines one rare united front in the highly divisive battle over the shutdown.

Minnesota lawmakers have said the tax hurts innovation, and a long list of Minnesota-based companies, including device-manufacturing giants Medtronic and St. Jude Medical, have been anxiously eyeing the nation's Capitol for signs of hope that lawmakers would kill tax. Now there are signs it could happen.

Congressional observers say there is bipartisan support for repealing the tax (although Senate Majority Leader Harry Reid has called a repeal "stupid.")

House Republicans had attached a repeal of the tax to a measure that also included a one-year delay of Obamacare, although the Senate won't consider that legislation because of the Obamacare delay.

But on Tuesday, the tax repeal may be a point of compromise between the House and Senate as the two chambers work to end the government shutdown, the Senate's No. 2 Democrat, Richard Durbin, of Illinois, said, CNN reports.

"We can work on something, I believe, on the medical device tax. That was one of the proposals from Republicans, as long as we replace the revenue," Durbin told CNN.

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White House threatens to veto bill repealing medical-device tax

The U.S. House is expected to vote Thursday on legislation to eliminate a 2.3 percent excise tax on medical devices, included in President Obama's health-reform law. The bill is proposed by Minnesota Republican Congressman Erik Paulsen. The Business Journal notes the tax, set to go into effect next year, would impact large companies like Fridley-based Medtronic Inc. and Little Canada-based St. Jude Medical Inc.