As Usual, No Thinking and No Progress at ThinkProgress

by Ramesh Ponnuru

The headline: “Conservatives Make Up Reasons for Why Some of the ACA’s Pay-Fors Should Be Repealed.” Make up? You can think that the harms the medical-device tax will likely produce will be smaller than I do, or that the benefits of Obamacare outweigh them. But it’s sort of bizarre to suggest that the notion that it will inflict harms is made up.

Igor Volsky writes, “Ramesh Ponnuru has written the kind of column that really undermines the credibility of conservatives who thump their chests about reducing federal spending and insist that any new law must be paid for.” A medical-device tax doesn’t reduce federal spending. And of course it is entirely possible to believe that new spending programs should be paid for while also opposing specific misbegotten spending and tax policies. So far, then, all the chest-thumping is Volsky’s.

He continues, supposedly exposing my “false arguments”: “Ponnuru must know that the fee was not intended to target the medical device industry specifically, but was just one of many provisions that sought to ask the sectors of health care — from hospitals to insurers to pharmaceuticals — that would benefit from reform to contribute towards expanding coverage to (almost) all Americans. In fact, these provisions came about after conservatives, Republicans, and moderate Democrats defeated a whole host other cost-cutting deficit-reducing mechanisms — from the public option to a national exchange — and for them to now present the resulting compromise as some kind of attack on medical devices is intellectually dishonest to say the least. “

It’s not a tax at all! It’s just a “fee.” That’s the intellectually honest way to discuss these issues, I guess. Who cares whether the tax was “intended” to be “an attack on medical devices”? Its effects on the industry will be the same regardless of why it was imposed. Volsky, meanwhile, entirely ignores the points I made about why the recouping-windfall-gains argument is mistaken. Must be more of that famous intellectual honesty.

Volsky scores half a point when he notes (as I did in my Corner post earlier today) that the tax includes exemptions, although the precise details of which will be determined later. I’m not sure this gets him very far, though.

Volsky continues, “Companies also cannot avoid the fee by moving manufacturing to Ireland, like Ponnuru suggests, since the fee applies to products produced in, or imported in the United States.” This country is a net exporter of medical devices. On Volsky’s own description, production in Ireland for overseas markets will escape the tax.

Volsky closes by noting that one company’s executives, back in June 2010, said that the tax would neither raise prices a lot nor affect the company’s bottom line. So there’s no problem, then.

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