UPDATED: President signs omnibus including 'Cadillac' and medical device tax delays
- President Obama on Friday signed the 2016 Consolidated Appropriations Act into law. The Senate had voted 65-33 to pass the $1.1 trillion omnibus spending bill earlier Friday after it had cleared the House easily.
- The bill provides $622 billion in tax breaks, including delays to the ACA's Cadillac tax and medical device tax. The House had separately passed a tax extenders bill as a first step before approving the massive spending measure last week.
- In a statement Friday, Vice President Joe Biden praised the bipartisan compromise, saying, "This agreement reverses self-inflicted wounds like sequestration, averts another unnecessary government shutdown, and lays a path forward to the type of governing by consensus that the American people deserve and expect."
The Cadillac tax was originally set to take effect in 2018. As previously reported, reactions to the Cadillac tax had been split as supporters argued its revenue is key to sustaining the ACA, while high ranking Democrats in both the House and Senate preferred eliminating the tax entirely.
With the tax now delayed two years, the government will lose the estimated $91 billion in revenue the tax would bring during the next decade.
In addition, under the measure, the ACA's medical device tax will be suspended through 2017. The 2.3% tax was expected to raise $30 billion over 10 years but the tax has been a thorn in the side of the medical device industry. Last year, an internal audit by the Treasury's inspector general for tax administration found thousands of companies were not paying the tax, leading to a big shortfall in revenues from the tax.
The New York Times reported Republicans say the tax discourages "the development and sales of innovative, lifesaving medical technology." GOP opponents to the two ACA taxes state the delay and suspension could help establish a foundation to repeal other ACA provisions.
- USA Today House passes $622 billion in tax breaks
- The Washington Post House passes spending bill that would avert shutdown
- The Wall Street Journal Congress Passes $1.15 Trillion Spending Bill
- U.S. News & World Report Deal on Spending Bill Offers Something for Everyone
- The New York Times House Reaches Accord on Spending and Tax Cuts
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