It’s election season again! If you’ve missed all the media coverage and missed the lackluster first presidential debate, the energetic vice-presidential debate, and the bitter second presidential debate, let me say it again with a smile: It’s election season again!
Whoever is elected on Tuesday, November 6th, has four more years to impact the economy and change our fates. The great majority of our readers at the Pioneer plan to work in the biomedical field, and should pay particular attention to this election between President Obama and Governor Mitt Romney, since their respective parties prescribe vastly different futures for America. In these four years, most of us here at Georgia Tech will now have moved on to the real world, looking for jobs, starting businesses, paying taxes, and being our own citizens; We will feel the consequences of this election like never before. Today, the Republican and Democratic parties are as ideologically and bitterly opposed as ever, but you would not be able to tell that from what their platforms say about biomedical engineering . Here’s what the Democrats have to say about biomedical research: “We will continue to support America’s groundbreaking biomedical researchers in their lifesaving work.” And here’s the Republican Party’s (GOP’s) response. “We also support federal investment in basic and applied biomedical research…” Despite this moment of surprising harmony, both parties hold fundamentally different visions of America with respect to the domestic economy and foreign trade policy, which would have significant effects on biomedical research and industry.
From the view of biomedical businesses, the future of taxes offers a mixed bag. The current corporate tax rate is 35%, one of the highest in the world, but a variety of loopholes and deductions drastically reduce the amount of taxes paid. Both the Democrats and the Republicans generally agree to politically palatable plans to lower the tax rate while eliminating many special interests tax breaks, but the difference in is the numbers. President Obama and the Democrats propose reducing the corporate tax rate to 28%, and offer tax breaks for manufacturing, while the GOP proposes lowering tax rates to at most 25% percent, but most often far lower. Concerning tax increases, one provision of the Affordable Care Act (ACA) dictates a 2.3% medical device tax on all revenues resulting from medical device sales (excluding hearing aids and eyewear). However, given the big-business ties to the White House, the Democratic Party, and the Republican Party, any truly big taxes on businesses would be a surprise.
Biomedical companies must also contend with regulations in the market in their quest to make profits. These regulations can encompass anything from the U.S Food and Drug Administration (FDA) medical regulations and Occupational Safety and Health Administration (OSHA) safety regulations to corporate and business law. In general, while regulations tend to keep consumers safe and markets stable, they also make innovation costlier and more difficult. As a general rule of thumb, the business-interests dominated wing of the GOP favors less and less regulation, while Democrats try to solve most problems through more regulation (even if more efficient methods exist). However, the two most salient regulations passed recently, the Leahy-Smith America Invents Act reforming patent law, and the Jumpstart Our Business Startups (JOBS) Act of 2012, were passed with bipartisan support. Both of these are intended to reduce regulations, either to streamline the patent system or to help small start-up companies raise more capital earlier.
We are but one nation on a global market stage, and unfortunately we are not the only nation with biomedical engineers. China’s presence in the global market has skyrocketed, as anyone paying attention to current events knows, and amongst its many success stories are its numerous biomedical companies. In addition, many of our own biomedical companies are starting to invest in China, selling medical products and establishing offices in Shanghai and Beijing. However, given the recent uproar over Chinese intellectual property violations and trade and currency violations, many people in America seek to impose tariffs on Chinese products to protect their own industries. Governor Romney takes a hard line against China, eschewing negotiation for direct confrontation over currency manipulations and trade violations. In his views, China’s markets can only be opened if they directly agree to follow the world’s rules, while President Obama seeks to welcome China as an ally while still pragmatically negotiating in America’s interests. If either candidate succeeds in their foreign policy aims and convinces China to “play by the rules”, then biomedical companies at home will benefit by facing fairer economic competition.
These are not the only factors that will play into the election. On a personal level Governor Romney displays an ability to hold multiple positions on a single issue at once depending on his location, while President Obama’s leadership and salesmanship to his American constituency leave a lot to be desired. Many voters will also vote because they care about the cultural positions that their candidate holds. But, in short, if Governor Romney and a compliant GOP-led Congress win the elections and keep their campaign and platform promises, look for less government spending and investment, a focus on cutting the deficit, a drop in taxes, an easing of regulations, and economic tensions with China. If President Obama wins re-election, and the House wins a Democratic majority or a less hostile GOP party, consider more priority given to economic stimulus and investment than to dramatically fixing the deficit, a smaller decrease in taxes, an increase in regulations, and more focus on negotiations with China. No matter which candidate wins election, we, the biomedical industry, will adapt and survive.