Did the GOP shut down the government just to please a special interest industry lobby?

Medical-device-players-montage-500October 19, 2013- By Steven E. Greer MD

The United States government was partially shut down for more than two weeks in October. Conservative caucuses of House and Senate Republicans led the charge, or so it seemed.

Thanks to a Wall Street Journal article, it is now known that one man, a 31-year-old lobbyist named Michael Needham working for the conservative Heritage Foundation, controlled the puppet strings and was the true architect of the strategy to shut down the government.

But who controlled him, or to which industry special interest was he pandering? Was the country shut down to please a small special interest with lobbying clout?

When the deadline approached that would have led the country to default on debt triggering a global crisis, the paper tiger Republicans blinked, the debt limit was raised, and the government was reopened. None of the demands of the GOP were met. The reputations and careers of the Republicans hoping to become president, such as Ted Cruz, were damaged, and their opponent, the President of the United States, came away looking like the strong leader.

What did the Heritage Foundation really want to achieve at the expense of leading these dimwit Republicans to a mass suicide? In another WSJ Op-Ed, the president of the Heritage Foundation and former Senator, Jim DeMint, explained all of the failings and dangers of Obamacare (The PPACA law) and why they “Won’t back down”. However, nowhere in the lengthy essay did he mention the Heritage Foundation’s agenda to repeal the medical device tax created by Obamacare. Why?

As for the Republicans and their rationale of the bungled shutdown strategy, they claim that they were “fighting the good fight” trying to get “Obamacare” delayed by a year, according to Speaker Boehner. But the President made it clear that such a compromise was off the table. So, what did they really hope to achieve? Were Ted Cruz and Rand Paul simply posturing, grandstanding, to position themselves for the 2016 presidential election or did they think that the unpopular medical device tax was really on the table? After all, the repeal of the tax has bipartisan support.

The smaller, more feasible, but less noble goal of repealing the medical device tax could have been the secret agenda of the entire government shutdown strategy of the Heritage Foundation. If true, the global economy almost suffered another financial crisis, only to benefit a special interest group of medical device manufacturers.

The medical device industry has an inordinate amount of political leverage on Capitol Hill. The entire industry represents only $176 Billion in revenue, or 1% of the annual $16 Trillion GDP, and employs approximately 620,000 Americans[1], or 0.04% of the 154 Million workforce.

But the lobbyists for the industry are among the top spenders on Capitol Hill. OpenSecrets.org collects data on lobbying spending. Overall, the health products sector spends $489 Million on lobbying, rivaling the top spender, which is the Wall Street. OpenSecrets.org ran a custom query for The Healthcare Channel, and the medical device industry alone spends $30 Million on lobbying.

In addition to the leverage over congress that cold hard cash delivers, some influential members of congress have senior staffers who come from the medical device lobbying industry. Powerful Ohio congressman John Boehner’s office sets the precedent.

The House is the chamber leading the fight to repeal the medical device tax. Speaker of the House John Boehner hired Brett Loper in 2011. Mr. Loper was formally the AdvaMed government affairs liaison, and received a $100,000 bonus from AdvaMed for leaving their group to join congress.

Notably, Mr. Loper also used to work for the now-disgraced Republican congressman from Texas, Tom DeLay, who was convicted of money laundering, and also was a strong advocate for the medical device industry while in congress. For example, Mr. DeLay helped persuade the FDA’s medical device CDHR division, headed by Dan Schultz, to overrule his own medical officers and approve the Cyberonics vagus nerve stimulation device to treat depression. Cyberonics was located in Mr. DeLay’s district in Texas. Mr. Schultz was ultimately fired from the FDA.

While working for Speaker Boehner, Mr. Loper worked aggressively to repeal the Obamacare medical device tax. Mr. Loper recently left congress through the revolving door. He joined American Express in the private sector.

The smoking gun connecting the medical device lobbying group to the GOP’s strategy to shut down the government was found when a congressional letter urging the repeal of the medical device tax was determined to have been drafted by an AdvaMed employee, Ryan Strandlund.

Back to The Heritage Foundation, which was the architect of the recent Republican government shutdown strategy that backfired. The Heritage Foundation has published numerous essays, articles, and books explaining how the medical device tax will cause jobs to go overseas and kill innovation. Those messages have been mirrored closely, almost talking point per talking point, the messages from the medical device lobbying groups. A recent New York Times Op-Ed after published after the government reopened listed the common arguments for opposing the PPACA law, and rebuked them one by one.

Is there a direct financial connection between the Heritage Group and any registered lobbyist for the medical device industry? Those data are not readily available in non-profit financial records. However, there is evidence to suggest a crosspollination between the Heritage Foundation and medical device lobbyist.

To clarify, this author is not a strong proponent of the PPACA law. It has countless fatal flaws that will lead to socialized medicine. The point of this essay is to show just how perverted and corrupted by lobbyists is the Washington, DC machine.

The government shutdown was extensively reported in the mainstream press. Plenty of blame was assigned, most falling on Ted Cruz and John Boehner. They, in turn, justified their embarrassing loss as “fighting the good fight” trying to help the nation. In actuality, and not well reported at all, the real goal of the Republicans was to please the medical device lobbyist groups by repealing the medical device tax, which would not help Americans whatsoever.

No wonder the goal of repealing the medical device tax was not made a “talking point” by the GOP. It was indefensible and led to the shameful shutdown of the United States.


[1] Based on proprietary analysis by The Healthcare Channel using S&P Capital IQ data, screening by market cap.

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