Senate Passes Measure To Repeal Reform Law’s Tax-Reporting Rule
The vote marks the first time Congress has approved eliminating part of the law.
President Obama is expected to sign the bill despite concerns about its offset (Haberkorn, Politico, 4/5).
Background on 1099 Item
The tax-reporting requirement -- which is scheduled to take effect in 2012 -- requires businesses, not-for-profit groups and government offices to file 1099 forms with the Internal Revenue Service when they purchase $600 or more in goods or services from another business in a given year.
Federal analysts predicted that the provision would raise $19.2 billion in revenue over 10 years, but lawmakers and the White House consider it an undue burden on small businesses and have pressed for its repeal.
However, lawmakers for weeks have been unable to reach a compromise on how to offset the revenue lost by repealing the provision (California Healthline, 3/30).
Details of Legislation
HR 4 would finance the repeal by changing how tax subsidies are recollected from consumers using state-based health insurance exchanges whose incomes change during the year.
The Senate considered a Democratic amendment that likely would have dropped the offset component from the repeal, but it failed, 41-58 (Politico, 4/5).
Republicans characterized the vote as an early victory in their attempts to dismantle the overhaul.
Senate Minority Leader Mitch McConnell (R-Ky.) said, "The more Americans learn about this bill, the less they like it," adding, "We hope to respond to their concerns with many repeal votes like this here in Congress" (Mulero/Ethridge, CQ Today, 4/5).
Sen. Mike Johanns (R-Neb.) said the drawn-out process to repeal the 1099 provision -- even when doing so had bipartisan support -- shows how difficult repealing more contentious parts of the overhaul will be for the GOP.
He said, "This was a provision â¦ that pretty quickly everybody agreed was foolish," adding, "And yet we had over a dozen votes to get to this point." Johanns asked, "Can you imagine what kind of battle you would have on a key part of the health care bill?" He noted, "Once something becomes law in the federal government, it is very, very hard to amend it or tweak it unless there is unanimous agreement" (Politico, 4/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.