Senate Debates 1099 Repeal on Food Safety Bill

The Senate is “moving ever closer to repealing what small business owners have called an onerous new IRS reporting requirement set to kick in in 2012 under the new health care reform law passed earlier this year, but there will be no proverbial cigar this time around,” Fox News reports.

Most, if not all, senators appear to agree that the requirement, which mandates that all businesses report payments and purchases totaling more than $600 in a calendar year, regardless of what the money was used to buy, should be eliminated in these difficult economic times, but differences remain strong enough to derail two attempts at repeal set for Monday night, according to Senate sources.

The Patient Protection and Affordable Care Act (PPACA) contains the provision designed to raise revenue without raising tax rates, and removing the provisions would leave a $19 billion hole.

Democrats, led by Senate Finance Committee Chairman Max Baucus, D-Mont., contend that the PPACA is already more than $100 billion in the black, according to the nonpartisan number crunchers at the Congressional Budget Office. Baucus, author of the original repeal measure, said Monday, “The new reporting requirement just went too far….It far exceeds any benefit.”

But the author of a competing amendment, Sen. Mike Johanns, R-Neb., who favors repealing the entirety of the new health care law and replacing it with GOP alternative legislation, said any removal of the 1099 requirement should include an offset to make up for the loss of revenue. Johanns’ amendment would, according to the senator, “simply (strip) 5% of the nonsecurity related funding that is just lying dormant in federal accounts at the end of the year.” Johanns’ would empower the head of the president’s Office of Management and Budget (OMB) to make the decision on what would be cut.

Both repeal amendments have been offered to a food safety bill that is currently being considered by the Senate.

Senate action to repeal the provision is expected “before the end of the lame duck session.”

Update: Both members tried to get a vote on their proposals tonight.  They did so by offering a motion to suspend the rules (Rule 22) which, if adopted, would force an up-or-down vote on each amendment.  Sixty-seven affirmative votes are needed to adopt such a motion.  The motion on Senator Johanns’ amendment was defeated, 61-35.  The motion on Senator Baucus’ amendment was defeated by a vote of 44-53.

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