ST. PAUL, Minn. (AP) — Republican lawmakers facing a critical legislative election season focused on taxes in the federal health care overhaul Monday as they attempt to bring a nationally charged issue — and the T-word — into state races.

The GOP-led House Taxes Committee hearing featured U.S. Rep. Erik Paulsen as a star witness, with questions from Republican U.S. Senate candidate Kurt Bills, a state representative who serves on the panel. Bills is the underdog challenging Democratic Sen. Amy Klobuchar in a race widely considered to favor the incumbent.

Paulsen recapped his effort to repeal a 2.3 percent excise tax on the medical device industry last month, saying the pending tax is already leading to layoffs as companies anticipate its Jan. 1 effective date. Paulsen claimed that the tax could wipe out as much as a tenth of the jobs in an industry that employs 35,000 in Minnesota and more than 400,000 nationally. His bill repealing it passed the House June 7 with support from all eight Minnesota representatives, including four Democrats, but hasn’t come to a vote in the Senate.

“The tax is really kind of a ticking time bomb,” said Paulsen, who is running for a third term in a district considered safely Republican.

Democrats didn’t let the Republican message go unchallenged. They prodded Paulsen to talk about the law’s positive aspects, such as expanding coverage to millions of uninsured.

“For the first time in their life, they’re going to have access to cost-effective care that includes these kind of devices,” said Rep. Diane Loeffler, DFL-Minneapolis.

“I wish your testimony would talk more about the total package,” said Rep. Lyndon Carlson, DFL-Crystal. He added: “The more people you have insured, the better it is financially for all of us relative to our health insurance.”

Bills raised questions about the tax repeal’s status in the Senate, without mentioning Klobuchar by name.

“Just from an economics standpoint, it seems to me like we’d want to be decreasing costs, increasing jobs and increasing research and development, and this is doing the exact opposite thing,” Bills said.

A supporter of the health care overhaul, Klobuchar has spoken in favor of the medical device tax repeal and worked with Paulsen on the issue.

“Senator Klobuchar has long worked to get this tax reduced or eliminated, including a $20 billion reduction from the original proposed tax,” Klobuchar spokeswoman Brigit Helgen said.

The state Republican Party has been pressuring Klobuchar to sign onto Paulsen’s repeal bill, which President Barack Obama has threatened to veto. The proposal would undo the tax on devices such as replacement joints and imaging equipment and instead make it easier to recover overpayments of federal insurance subsidies to lower-income individuals.

The issue of taxes in the health care law may also be seeping into some legislative races. All 201 lawmakers are on the ballot in November in an election that will determine which party controls the agenda as Democratic Gov. Mark Dayton looks toward a 2014 re-election campaign and the state faces another projected deficit.

Rep. Sarah Anderson, R-Plymouth, said voters are bringing up the medical device tax increase as she campaigns in her western Minneapolis suburban district.

“A lot of my constituents are employed by these companies and when I go door to door their biggest concern is if a year from now they’re going to have a job,” she said.

Committee Chairman Greg Davids said he convened the hearing in response to the Supreme Court ruling upholding the law last month. He said Minnesota lawmakers will face decisions next year on whether to match up state tax policy with the new federal law.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)


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