U.S. Rep. Erik Paulsen

U.S. Rep. Erik Paulsen

Repeal of a device tax that has hit Minnesota medical technology companies hard could be the sweetener that breaks the deadlock over the debt limit and the government shutdown, which went into its 11th day Friday.

A repeal the 2.3 percent medical device tax levied under President Obama’s health care law was part of a package Senate Republicans brought to the White House Friday. The offer would temporarily raise the debt ceiling and fund the government, which has been shut down since Oct. 1.

Maine Republican Susan Collins told reporters afterwards that Obama did not reject the idea of repealing the medical device tax out of hand. She was quoted saying “he clearly also recognizes that it is not the heart of Obamacare.” Her account was seconded by Republican Sen. Orrin Hatch of Utah, who said the president called the tax a “legitimate concern” that might not be an integral part of the new health care law.

The Minnesota congressional delegation has uniformly opposed the tax, which has cost large medical technology companies like St. Jude and Medtronic millions of dollars already.  But Democrats in the delegation largely oppose making the device tax, or any aspect of Obamacare, part of the budget fight.

Republicans, on the other hand, have tied several measures defunding or delaying Obamacare to a spending resolution that would reopen the government.

Minnesota Republican Erik Paulsen, working with Democrat Ron Kind of Wisconsin, has been pushing behind the scenes in the House to offer up a device tax repeal as a compromise.  The question remains, however, whether that alone would be enough for Republicans, or whether Democrats would even put it on the table.

Some House Democratic leaders reacted with dismay at the prospect of repealing a tax that is expected to raise $30 billion to help fund the new health care law over the next decade. New York Democrats Joe Crowley, vice chairman of the Democratic caucus, lampooned the proposal.

But with closed-door talks intensifying Friday to end the impasse, it remained hard to predict whether the tax will stay on or go off.  

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