The new Republican majority will present an interesting test case for two of Barack Obama’s favorite claims of late with a push to repeal one of the worst problems in ObamaCare. With the President claiming to be pursuing bipartisanship and training a “singular focus” on job creation, the repeal of the 1099 requirement in last year’s bill gives Obama a chance to score on both points. Democrats blocked GOP efforts to resolve this issue in the final weeks of the 111th Session despite acknowledging that it had created big problems for small businesses (via the Boss Emeritus):
House Republicans have re-numbered the bill repealing the tax requirement as H.R. 4, signaling it will be one of their first pieces of business.
The bill would repeal language requiring companies, starting in 2012, to report all goods and services transactions valued over $600 to the IRS. Republicans and Democrats, and even the White House, have since said they support repealing this language, which would raise $19 billion over ten years and was included to help pay for the healthcare law.
Rep. Dan Lungren (R-Calif.) had already introduced a so-called 1099 repeal bill, which was numbered H.R. 144. By bumping up that bill to H.R. 4, Republicans are making it clear that they will move this bill on an expedited basis. Traditionally, the House majority controls the first ten bills in Congress (H.R. 1 through H.R. 10), and usually reserves those numbers for high-priority items.
The bill has already attracted 245 co-sponsors, including 12 Democrats, among whom is Barney Frank, now the ranking member of the Financial Services Committee. Furthermore, in the Senate, Mike Johanns (R-NE) and Joe Manchin (D-WV) plan to offer their own version of the repeal in two weeks, when the Senate starts accepting new bills. Momentum is growing to get rid of these requirements and their job-killing accounting burdens on small business — as well as the red tape nightmare they will create at the IRS.
However, that much consensus existed last year when the media finally started covering the 1099 issue (although it was public as early as October 2009). Democrats counted on raising $5 billion over 10 years with this requirement, arguing that businesses evaded taxes by not sufficiently documenting transactions to the IRS. When the GOP proposed killing the requirement, Democrats insisted on a tax increase to “pay” for the change. That demand has apparently vanished as the requirement takes effect and businesses still have not resumed hiring.
We finally have arrived at a bipartisan consensus on this problem — but will Obama sign off on it? Republicans will also pass a full repeal of ObamaCare in the House sometime this month, perhaps close to his State of the Union address. Obama had earlier insisted on a pay-for to go with the repeal of the 1099 clause, but that was before getting slapped in the midterms. I’d bet that the White House quietly goes along with the consensus on Capitol Hill to get this issue off his desk and out of the discussion of overall repeal.