Republicans Block Effort To Repeal 1099 Tax Reporting Rules

Doug Mataconis · · 11 comments

After spending much of the past eight months or so criticizing the new 1099 reporting requirements contained in the Affordable Care Act, and even trying to repeal them back in July, Republicans are now blocking a Democratic effort to repeal the rules in the lame duck session:

Another day, another failed attempt at 1099 repeal. Republicans rebuffed a Democratic effort to repeal health reform’s universally panned 1099 IRS reporting requirements as a piggyback in the tax cut deal, congressional aides on both sides of the aisle confirm to POLITICO. The move leaves 1099 rollback in play for the next Congress, giving Republicans an easy target in an otherwise challenged landscape for health reform repeal. Democratic aides allege Republicans are stalling on repealing the unpopular measure for political benefit. Health reform’s 1099 tax reporting provision requires businesses to file IRS paperwork on any vendor purchases over $600. Both parties have failed in multiple attempts to dial back the unpopular provision. Democrats thought they saw a path forward with the tax-cut legislation: attach 1099 repeal to the larger, Republican-supported bill and settle the matter once and for all. But Republicans, who took a hard line against any “Christmas tree” add-ons, nixed the idea. “For all their talk about small businesses, it was stunning to see Republicans walk away from them when they had a chance to actually help,” a Democratic Congressional aide tells POLITICO. “Rather than working to include 1099 repeal in the bill, they actively refused in order to continue their political posturing. We all agree small businesses had some real concerns, that we should listen to them and repeal this provision … Small business owners deserve more than lip service from Republicans.” A Republican Congressional aide familiar with the discussion says the 1099 repeal provision was rejected as one of many Democrat-offered add-ons. Republicans tried to craft a final product that hewed closely to the legislation’s first draft, the source said.

The 1099 reporting requirements have been among the most universally panned provisions of the health care reform law, with some sources estimating that it could cost the average small business as much as $ 6,000 per year in additional administrative expenses. Both parties have thus been under pressure from small-business lobbyists to repeal the provision, and it seems fairly clear at this point that the votes to repeal are there in both the House and the Senate.

So, why are the Republicans blocking it? Well, let’s just say that it has little to do with a sudden GOP concern for Congressional bills with lots of add-on provisions, and everything to do with politics. If the 1099 provision gets passed now, the GOP will be unable to claim credit for it. If they wait until January and make it one of the first legislative actions of the 112th Congress, they’ll be able to say “see, we did this,” and it will help their efforts to continue painting Democrats as anti-small business. It’s cynical, it’s stupid, and it’s politics as usual. Don’t tell me you’re shocked.