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WASHINGTON - The Obama Administration has threatened

 legislation put forward by Minnesota Republican Congressman Erik Paulsen that would overturn a tax on medical devices that was part of the 2010 health care overhaul.

The House is set to vote as early as Thursday on Paulsen's bill, which has 240 cosponsors from both parties. Paulsen has made the bill one of his biggest priorities in Congress, calling it "a tax on innovation" that will hurt Minnesota's medical device industry.

House Republicans have opted to offset the $29 billion cost of repealing the tax by increasing the amount middle class taxpayers would have to repay the government for subsidies they receive to buy health insurance but don't fully use.

In a statement of official policy to Congress, the Office of Management and Budget said the bill would expand the number of Americans without health insurance while funding "tax breaks for industry by raising taxes on middle-class and low-income families."

The 2.3 percent excise tax was included in the health care law in order to fund an expansion of heath insurance to those who currently do not have it. Minnesota lawmakers, including Democrats, fought hard against the provision during the health care debate and managed to halve the size of the tax and delay its introduction. It now goes into effect in 2013.

 earlier this week, Paulsen's bill has put some Minnesota Democrats in a political bind between supporting a local industry and chipping away at a health care law that almost all of them supported. On Wednesday, DFL U.S. Rep. Tim Walz announced that he would support a repeal of the tax.

While the legislation is almost certain to clear the House, it's unlikely to receive a vote in the Democratic-controlled Senate.

In a brief statement, Paulsen said the administration's veto threat would not deter Republicans from bringing up the bill.

"American leadership in medical device innovation, and the nearly half million U.S. jobs it supports, is worth fighting for," said Paulsen. "With the backing of more than 240 of my colleagues from both sides of the aisle, I look forward to bringing this bill to the House floor tomorrow to do the right thing and stop this ill-conceived and wrong-headed tax in its tracks."

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Brett Neely

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The Obama Administration says the repeal bill would help industry and hurt consumers.

White House threatens to veto Paulsen’s medical device tax bill

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