Senate Sends 1099 Repeal to Obama

Posted April 5, 2011 at 12:16pm

The Senate on Tuesday voted to send to President Barack Obama a bill that would make the first significant change to Democrats’ signature health care overhaul law.

Despite White House objections to the mechanism used to pay for the proposal, the Senate voted 87-12 in favor of a House-passed bill that would repeal a tax-reporting requirement included in the health care law.

The provision, which requires companies to file a 1099 form with the IRS every time they conduct $600 worth of business with a vendor, has been panned by Members of both parties, who claim it is overly burdensome to small businesses.

But the White House and some Senate Democrats have raised concerns over the bill’s method of offsetting revenue that would be lost if the provision is repealed. The bill, sponsored by Sen. Mike Johanns (R-Neb.), would pay for the change by requiring some families to repay more health insurance subsidies.

Before passing the bill, the Senate defeated 41-58 an amendment offered by Sen. Bob Menendez (D-N.J.) that would have made the 1099 repeal contingent on the Department of Health and Human Services certifying that it does not increase premiums or coverage costs for small businesses. Johanns and other supporters of his proposal urged defeat of the amendment, which would have required that the bill go back to the House.

The Obama administration supported repealing the 1099 provision but also expressed “serious concerns” about the bill’s offset in a Statement of Administration Policy released this month. The White House argues that offsetting the proposal by requiring greater repayment of subsidies would result effectively in tax increases for certain middle-class taxpayers, but it stopped short of threatening to veto the measure.

The House passed the 1099 repeal 314-112 on March 3. The Senate also voted overwhelmingly in favor of its own version of a 1099 repeal earlier this year.