Two efforts to repeal PPACA’s 1099 filing requirement failed in the U.S. Senate on Monday.
Under the requirement, approximately 40 million businesses would have to file a Form 1099 for every vendor that sells them more than $600 in goods. (A 1099 filing requirement already exists for services worth more than $600.)
The measure was added to the health reform law as a way to collect as much as $19 billion in additional tax revenue, which would help offset the cost of the law’s insurance mandates. The first filing requirement would be in 2012, for the 2011 tax year.
There is support among both Democrats and Republicans in Congress for repealing the filing requirement because of the paperwork burden it would create for businesses and the IRS.
In comments made shortly after the mid-term elections, President Obama indicated his own support for repealing the measure, as long as Congress could come up with a way to replace the tax revenue that would be lost by doing so.
Failure to adequately meet that pay-for standard apparently doomed both of Monday’s efforts to repeal the provision. One proposal, from Sen. Max Baucus (D-Mont.), did not include any pay-for provision at all. The other, from Sen. Mike Johanns (R-Neb.), would have required the Obama administration to make up the lost revenue by tapping unspent money in various federal accounts.
The two repeal proposals were offered in the form of amendments to an unrelated bill on food safety. Each failed to get the necessary two-thirds majority.
A similar scenario played out in July in the House of Representatives, when a proposal to repeal the 1099 requirement failed because members could not agree on how to make up the lost tax revenue.
Prior to Monday’s vote — one of the first in 2010’s two-week "lame duck" session — opponents of the requirement indicated that if the current repeal effort failed, they would try again after the 112th Congress convenes in January.
Separately, the House put off for one month the scheduled 23% cut in Medicare payments to physicians — the so-called "doc fix." Under the terms of a previous extension, that cut was to have taken effect on Dec. 1.
The Senate passed its version of a 30-day delay on Nov. 18. If the president signs it into law as expected, the measure will fund a 2.2% "adjustment" in physicians’ Medicare payments by reducing payments for therapy services by 20% through Dec. 31.
Since the 1990s, Congress has struggled to come up with a permanent way to reduce Medicare payments to doctors in a way that is palatable to physicians’ groups. Monday’s vote is the latest in a long series of temporary extensions.
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