1099 Fix: 3 Democrats Think Neat

January 21, 2011 at 07:00 PM
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WASHINGTON BUREAU — Three Senate Democrats say they will support efforts to repeal the broad new Form 1099 tax reporting law – but only if they get a clean bill from the House.

In a move that may be the start of a long tug-of-war over changes in the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) – the senators have written to ask House Speaker John Boehner, R-Ohio, "to quickly pass a clean measure rolling back a burdensome reporting requirement in the law–the so-called '1099′ requirement."

Eliminating the requirement would "preserve jobs in America's small businesses, 1099 fixour nation's engines of economic growth," the senators say in the letter.

The senators who signed the letter are Ben Nelson of Nebraska, Maria Cantwell of Washington and Amy Klobuchar of Minnesota.

House Republicans succeeded Wednesday at passing H.R. 2, the Repealing the Job-Killing Health Care Act bill. Many view the vote as symbolic, because Senate Majority Leader Harry Reid, D-Nev., is refusing to let the bill come to the Senate floor.

Affordable Care Act opponents are also trying to stop, or change, the act by going to court to declare it unconstitutional and by trying to withhold the funding needed for implementation. Some say Republicans may prefer to see the Affordable Care Act, which got through Congress with only a few Republican votes, take effect exactly as written, flaws and all, rather than trying to fix flaws; others say support among Republican lawmakers for improving Affordable Care Act provisions is strong.

The new Form 1099 reporting provision in the act was created by PPACA Section 9006.

Businesses have long used Form 1099 to report sums other than wages and salaries paid to independent contractors and other vendors. PPACA Section 9006 expanded the provision to require all business entities to file a 1099 with the Internal Revenue Service for each vendor that they have paid a total of $600 or more over the course of a year. The provision was inserted as a means of raising $19 billion over 10 years.

All insurance trade groups support repealing Section 9006. The groups say complying with the provisions would force members to use expensive, cumbersome new recordkeeping mechanisms.

Nelson, Cantwell and Klobuchar wrote to Boehner in support of H.R. 4, a bill

that would simply strike the statute created by Section 9006 from the lawbooks. The bill was introduced by Rep. Daniel Lungren, R-Calif., and has 254 cosponsors.

The senators may be implying that Republicans will have a hard time passing a bill that bundles many different PPACA changes — such as medical malpractice system changes and repeal of a provision that would most people to own a minimum level of health coverage starting in 2014 – in one package.

House Republicans have passed a resolution, H.R. 9, calling for four House committees to draft legislation that would "replace ObamaCare with meaningful reform to lower costs, expand access to affordable coverage, and protect the doctor-patient relationship."

Rep. Pete Stark, D-Calif., who has played a key role in drafting health care legislation, said on the House floor that the resolution is meaningless.

"There is no requirement that the committees have to pass any legislation," Stark said. "There is no date by which committees have to pass legislation. Of the 12 goals [the resolution] sets, it is drafted so that committees only have to meet one. If Republicans were actually interested in making law that meets not just one, but all of their principles, they wouldn't have voted yesterday to repeal the health reform law."

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