Collins’ “moderation” includes a nearly $30 billion special interest tax break lobbyists love

Sen. Susan Collins

Now, it surely cheers most of our hearts to see a potential way out of the current crisis politics created by Tea Party Republicans. And Sen. Collins has offered one that seems to have potential.

At the same time, one part of the Collins plan exemplifies the sort of Washington politics that no one should cheer.

Collins has proposed a big tax break, purportedly to last two years, that will go to medical device manufacturers.

Demonstrating the power of the bipartisan revolving door, this industry is represented by a former Democratic Senator, Evan Bayh (who, like Collins, was praised for being a centrist) and the former Chief of Staff to John Boehner, the Republican Speaker of the House of Representatives. They’re cashing in on their connections, lobbying legislators with whom they worked.

The cost of this proposed tax break — $29 billion over ten years — makes the deficit worse. That would seem a rather strange outcome for a negotiation in part aimed at deficit reduction.

Collins has floated an idea for offsetting this cost, but strong analysis suggests that the numbers don’t add up, particularly if the tax break gets extended. Analysis also shows this industry is very profitable since medical devices are so much more costly in the U.S. than other countries and the industry could absorb the costs and still make big profits. Given the increase in customers they’ll get due to the ACA, they’ll make more money than ever.

If you were going to add to the cost of the Affordable Care Act, which the proposed tax break clearly does, why not increase the tax breaks to middle-class Americans or increase reimbursements to medical providers or fund more medical research or use the money to open some more medical clinics? Collins is not seeking any of those, which would help more people than this tax break.

You can see why lobbyists would love this. It probably makes it more possible for other parts of the medical sector that chipped in to fund the ACA to get more tax breaks. They’ll get them after spending lots of money for their own lobbying.

Some, but not all, Democrats think this is a terrible idea. But like other issues with big financial interests at stake, you’ll find bipartisan agreement in Congress for tax breaks that don’t benefit the public.

Now, there’s certainly more to the Collins proposal. News reports describe it as 23 pages long. Details are scarce but it appears there are other, more positive elements.

I know that my pundit card may get revoked for not comparing the proposal and the negotiations around it to making sausage and saying that, like sausage-making, no one should watch legislation being made. But this sausage seems pretty rancid.

And if this is what it means to be a moderate today, well, frankly, this is the kind of political deal-making that rightly turns people off. Repealing the medical device tax is the sort of corporate break, delivered by lobbyists winning the inside politics game, that’s disliked by everyone from Tea Party advocates to Occupy Wall St. supporters.

Will this be part of the price paid to reopen the government and avoid a global economic crisis? We’ll have to wait and see.

Amy Fried

About Amy Fried

Amy Fried loves Maine's sense of community and the wonderful mix of culture and outdoor recreation. She loves politics in three ways: as an analytical political scientist, a devoted political junkie and a citizen who believes politics matters for people's lives. Fried is Professor of Political Science at the University of Maine. Her views do not reflect those of her employer or any group to which she belongs.