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2chambers
Posted at 12:27 PM ET, 04/04/2011

Senate to hold final vote Tuesday on repealing health care law’s unpopular 1099 provision

Both the Senate and the House have already voted this year to repeal one of the most unpopular provisions of the national health care law. But this week, if things go according to plan, the Senate will hold a second (and final) vote on the issue, sending President Obama the first measure officially repealing part of his signature health care legislation.

On Tuesday, the Senate is slated to vote on repealing the 1099 tax-reporting provision of the health care law, which is, yes, every bit as exciting as the name suggests: the provision requires businesses to report to the Internal Revenue Service all purchases of $600 or more.

The White House and congressional Democrats and Republicans alike have criticized the provision as unduly burdensome on small businesses, and members of both parties have advocated for its repeal.

In an overwhelming 81-to-17 vote two months ago, the Senate approved repeal of the 1099 provision. The House passed its own version of 1099 repeal last month, on a bipartisan 314-to-112 vote.

So, most everyone in Congress agrees that the 1099 provision should go.

The sticking point, then, is how to pay for 1099 repeal, which would result in the loss of an estimated $22 billion in revenue over the next decade.

The 1099 repeal that passed the Senate earlier this year, sponsored by Sen. Debbie Stabenow (D-Mich.), would pay for the repeal by using untapped federal funds. It would also exempt the Social Security Administration, Medicare, the Defense Department and Veterans Affairs from potential cuts as a way to pay for repeal.

The version that passed the House, meanwhile, would pay for 1099 repeal by forcing greater repayment of health insurance subsidies for families whose income unexpectedly exceeds certain thresholds.

The version that will be voted on in the Senate on Tuesday will be the House-passed version, which Sen. Mike Johanns (R-Neb.) has introduced in the upper chamber; a 60-vote threshold is necessary for passage.

Republicans have argued that the House-passed plan would reduce the deficit by $166 million over the next decade, while Democrats have contended that it would increase the burden on the middle class. Boosting the measure’s chances of passing is the fact that it has the support of Senate Majority Leader Harry Reid (D-Nev.), who came out in favor of the House-passed “pay-for” last month.

One amendment to the 1099 repeal measure will also be up for a vote Tuesday. The amendment, sponsored by Sen. Robert Menendez (D-N.J.), would direct the Secretary of Health and Human Services to study whether the offset of the 1099 repeal would result in either increased health insurance costs or coverage cuts for small businesses. If HHS finds either of those to be the case, then the Menendez amendment would render the provision ineffective.

“This step is simple—it directs the administration to determine whether the Republican proposal would increase health insurance costs or cause cuts in health coverage for small businesses,” Menendez said in announcing the amendment last week. “If so, we have the power to protect small businesses from higher health care costs and coverage cuts. That’s the right thing to do and I’ll fight to support it.”

The fight over 1099 repeal – while a small skirmish in itself – is one part of the broader battle over dismantling the national health care overhaul. Opponents of the law say that the 1099 repeal will give their full repeal efforts momentum, while supporters of the law have vowed to block any further efforts to do away with parts of it.

That battle is currently playing out, in part, in the negotiations on funding the federal government for the rest of the fiscal year. House Minority Leader Nancy Pelosi (D-Calif.) said last month that no health care-related policy riders will be signed into law as part of any funding deal, while some Republicans have insisted that their support for any budget deal will be contingent on the inclusion of provisions defunding the health care law.

By  |  12:27 PM ET, 04/04/2011

 
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