Despite Stated Opposition To Health Care Reform's 1099 Provision, Republicans Vote Against Repeal

December 01, 2010 3:55 pm ET

For some time now, Republicans have desperately attempted to kill health care reform, peddling misleading claims and outright distortions to undermine the benefits of the law. In many instances, they have pointed to supposed ill-conceived provisions to denounce the legislation, using these specific details to contend that the bill is damaged beyond repair and therefore must be repealed. In particular, Republicans have decried the bill's 1099 reporting requirements for small businesses, claiming they are unnecessarily burdensome and will limit job creation. But when given an opportunity to vote on Sen. Max Baucus' (D-MT) amendment to repeal the 1099 provision and demonstrate their commitment to helping small businesses, Republicans balked. Indeed, despite their professed opposition to the 1099 provision, only two Republicans voted for the amendment.  

Republicans Launched Full-Scale Attack On Health Care Reform's 1099 Reporting Requirements...

Sen. Mike Johanns (R-NE): 1099 Provision "Has Nothing To Do With Improving The Healthcare Of This Country And Should Not Be Part Of This Law Or Any Other." From The Hill: "'The most routine business expenses will be subject to this new burdensome paper trail,' Johanns said Monday. 'This mandate has nothing to do with improving the healthcare of this country and should not be part of this law or any other.'" [The Hill, 7/26/10]

Sen. Mike Enzi (R-WY): 1099 Provision "Must Be Repealed — Unless We Want Our Businesses To Die An Economic Paperwork Death By A Thousand Cuts." In an August 12 op-ed in Politico, Sen. Enzi wrote: "Placing trillion-dollar health care costs on the backs of entrepreneurial teenagers, freelance writers, housekeepers and other businesses without in-house accounting departments is ludicrous. This section of the health care reform law does nothing to improve health care. Section 9006 must be repealed - unless we want our businesses to die an economic paperwork death by a thousand cuts." [Politico, 8/12/10]

  • Section 9006 Of The Health Care Bill Requires All Businesses To File 1099 Tax Forms If They Purchase More Than $600 In Goods Or Services In A Year. According to "Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year." [, 5/5/10]

Sen. Orrin Hatch (R-UT): 1099 Provision "Goes Way Too Far And Should Be Repealed." From a September 14 press release regarding the 1099 reporting requirements: "'Our nation's small businesses shouldn't be used as a cash cow to fund liberals' big-spending, high-taxing, debt-increasing agenda. But that's exactly what's happened and the $2.6 trillion health law is a prime example,' said Hatch. 'Washington Democrats put this overly-burdensome mandate on the backs of our job creators to help pay for a radical health law that the American people overwhelmingly oppose. It goes way too far and should be repealed.'" [Press Release, 9/14/10, emphasis added]

Sen. Mitch McConnell (R-KY): 1099 Provision Would Create "An Enormous Amount Of Paperwork And Complexity." According to The Hill:

Senate Minority Leader Mitch McConnell (R-Ky.) slammed the tax provision this week, saying it would create "an enormous amount of paperwork and complexity" for the nation's businesses.

"It's no wonder businesses are not expanding," McConnell told Fox News Wednesday. "The president's job killing agenda has been a big factor there."

[The Hill, 8/6/10]

Sen. Susan Collins (R-ME): "I Am Committed To Repealing This Provision." In a article titled "Paperwork requirement will harm small businesses," Sen. Collins wrote:

I voted against the health care bill because I knew that it would impose billions of dollars in new penalties on employers - ultimately paid for by American workers in the form of reduced wages and lost jobs - without producing improvements in health care affordability and quality. This 1099 provision, which apparently escaped the attention of many who voted for the bill, confirms my view.

I am committed to repealing this provision (as well as other ill-advised provisions of the new law.) Last month, I joined an effort to strike it from the law through an amendment to a small business bill. Unfortunately, our amendment failed. I was disappointed that the Senate missed a critical opportunity to repeal an unfair mandate that will further burden our small businesses, which are already struggling during these difficult economic times. I have co-sponsored stand-alone legislation to repeal this senseless, counter-productive provision, and will persist until it is done. If our nation is to recover from the economic doldrums, it will be due to the hard work and energy of our small business community, not to a deluge of tax forms.

[, 10/28/10, emphasis added]

Sen. Kay Bailey Hutchison (R-TX): "Onerous Provision" Will "Slow Job Creation At A Time That We Should Be Doing Everything Possible To Encourage And Accelerate It." In an article on her official Senate site, Sen. Hutchison wrote:

Unfortunately, those especially vulnerable to the negative impact of this requirement are the ones who are already hurting most in our economic climate - small businesses. Corporations and larger companies will see their operating costs rise, but many of them have dedicated bookkeepers or full accounting departments, enabling them to more easily take on the heavier workload. But most small businesses will not be so fortunate. Already scarce resources and stretched workforces will have to be diverted from productive business activities to cumbersome reporting tasks. Rather than focusing on company expansion, job creation, and wage growth, a business owner might find himself mired in the work of bureaucratic compliance. Ultimately, this provision will slow job creation at a time that we should be doing everything possible to encourage and accelerate it.


This onerous provision inside a heavy-handed health care law is another example of an overgrown government that is becoming too intrusive and too expensive. I cosponsored an amendment to repeal the 1099 provision, but it failed to pass. I will work during the next Congress to reverse the effects of this disastrous bill. We must work toward the right reforms. Reforms that will actually lower costs for patients - not raise them. Reforms that will strengthen small businesses - not stifle them.

[, 10/22/10, emphasis added]

Sen. Lindsey Graham (R-SC): "The Health Care Bill Had Many Terrible Provisions And This Is Among The Worst." From an August 4 press release issued by Sen. Graham:

Under the health care law, small businesses, churches, charities, and state and local governments, would be required to track their purchases and file 1099 forms with the IRS for every transaction with another business over $600.  This includes everything from office supplies to basic services. 

"The health care bill had many terrible provisions and this is among the worst," said Graham.  "The paperwork requirement the Obama health care bill will put on even the smallest businesses in South Carolina will be devastating.  Instead of small business owners spending their time growing their business, they will spend time filling out more government paperwork." 

"I appreciate Senator [Mike] Johanns' introduction of this important legislation and am hopeful we will soon take it up in the Senate," said Graham.  "Passage of this legislation will take a tremendous burden off the backs of small businesses.  The paperwork burden is yet another example of why the Obama health care bill should be repealed and replaced." 

[, 8/4/10, emphasis added]

Sen. John Thune (R-SD): "Burdensome" 1099 Provision Should Be Repealed "Without Delay." In a September 17 op-ed posted on his official Senate website, Sen. Thune contended:

The costly 1099 paperwork mandate is a burdensome requirement for both large and small employers across South Dakota. What may seem like an innocuous tax requirement to the federal government, will end up costing our businesses, farmers, and ranchers time and money that could be better spent on improving their businesses or hiring new workers.

In an economic climate where many businesses are stretching every penny to prevent layoffs or to keep their doors open, the Obama Administration and the Congressional majority continue to push troubling regulations and new burdens on our small businesses. These policies ultimately create uncertainty and instability in the employment market, and stand in the way of job creation.

Congress should listen to the business community, the agriculture community, and the trade associations and repeal the 1099 provision of the health care bill without delay. Now is the time to give employers the freedom they need to grow and expand their operations--not the time to discourage growth and entrepreneurship through costly paperwork. I will continue to work with my colleagues in the Senate to repeal this burdensome requirement.

[, 9/17/10, emphasis added]

Sen. John Cornyn (R-TX): "Repeal Of The Onerous Provision Must Be A Priority For Congress." In a September 14 op-ed, Sen. Cornyn wrote:

The new health care law requires every business to report all payments in excess of $600 to the Internal Revenue Service on a Form 1099. That is not as big a burden for large corporations with lots of lawyers and accountants already on the payroll. But for small businesses it can be devastating.


Repeal of the onerous provision must be a priority for Congress. So I will join several of my colleagues to support legislation to do just that. We will stand with dozens of small-business owners, including many Texans, to help convince other senators that the little-noticed provision in the health care law is creating even more uncertainty and despair among our nation's job creators.

[, 9/14/10, emphasis added]

Sen. Johnny Isakson (R-GA) Co-Sponsored Legislation To "Repeal This Overly Burdensome Reporting Requirement." On August 6, Sen. Isakson's office issued a press release announcing the senator's co-sponsorship of five bills aimed at repealing provisions of the health care law. From the press release: "Section 9006 of the new health care law requires business owners to submit a separate 1099 reporting form for every single business-to-business transaction that totals more than $600 in a given year. As a result, small business owners will have to complete and submit 1099 forms for basic businesses expenses, including phone and internet service, shipping costs and office supplies. The legislation would repeal this overly burdensome reporting requirement." [, 8/6/10]

...Yet Voted Against Amendment To Eliminate The Provision

Despite Previous Statements, Republicans Voted Against The Baucus Amendment. The following Republicans, who previously railed against health care reform's 1099 reporting requirements for small businesses, voted against the Baucus Amendment to eliminate the provision.

Collins (R-ME)
Cornyn (R-TX)
Enzi (R-WY)
Graham (R-SC)
Hatch (R-UT)
Hutchison (R-TX)
Isakson (R-GA)
Johanns (R-NE)
McConnell (R-KY)
Thune (R-SD)

The amendment failed by a vote of 44-53, with only two Republicans voting "yea."

[S.Amdt. 4713 to S.Amdt. 4715 to S.510, Vote#254, 11/29/10]