Thursday, September 16, 2010

Senate Fails to Cut Tax Provision in Health Law

According to the Associated Press, on Tuesday the Senate voted against repealing a new tax reporting provision in the new health care law. Even the White House backed the proposal by a Senator Bill Nelson to exempt companies with 25 or fewer workers and raise the reporting threshold for businesses with more than 25 employees.

It was an inconclusive ending to an early skirmish over repealing part of President Barack Obama's signature domestic policy achievement. But it signaled battles to come if Republicans gain control of Congress in the midterm elections this fall.

Tucked into the health law is a requirement that businesses file tax forms called 1099s with the Internal Revenue Service for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for more than 40 million companies as they struggle to keep going in a weak economy.

But Nelson's amendment failed a 60-vote procedural test 56-42. That vote came shortly after the Senate also sidelined, by 46-52, an amendment by Sen. Mike Johanns, R-Neb., that would have repealed the reporting requirement.

"We're stuck on this issue of whether or not businesses are going to have to file these 1099s," Nelson said.

The votes were a sidelight in a debate over broader legislation to help small businesses, but nonetheless they underscored the difficulty of making any substantial changes to the health care law.

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