ABC News’ John R. Parkinson reports:
The House of Representatives today voted to repeal the 1099 mandate of the health care reform law that Republicans say tangles small business owners in red tape and hampers job creation, but Democrats say the repeal will reduce federal revenues created by the health care reform law and increase taxes on the middle class.
The vote on H.R. 4 – the Small Business Paperwork Mandate Elimination Act – passed Thursday afternoon by a count of 314-112, with 76 Democrats joining a unanimous House GOP to strike the requirement.
Added by the Patient Protection and Affordable Care Act to help off-set costs of the law, the 1099 provision stipulates that corporations that are not tax-exempt report payments of $600 or more, creating nearly $22 billion in federal revenue over the next 10 years.
According to the Joint Committee on Taxation, the repeal would increase budget deficits by $21.9 billion over 2011-2021. In order to make up for those lost revenues, the Republicans’ legislation sought to modify the health care reform law’s repayment schedule for a portion of health care tax credits received by recouping subsidies to purchase insurance provided to lower- and middle-income families if their income grows beyond certain levels.
After the vote, Speaker of the House John Boehner said in a statement that he was pleased that the House once again is fulfilling another promise from the GOP’s Pledge to America.
“The 1099 mandate has been a major source of uncertainty for small businesses trying to grapple with the costs and consequences of the government takeover of health care,” Boehner said. “Having run a small business, I know how Washington mandates like this one can threaten jobs by increasing costs, creating uncertainty, and burying employers in red tape and paperwork.”
“By repealing the 1099 mandate, we are continuing to listen to the American people and taking another step towards creating a better environment for job creation in America,” Boehner added.
The Senate passed its own repeal of the 1099 mandate Feb. 2, but the House did not take up the Senate’s legislation. The fate of the 1099 is uncertain since the two chambers will have to reconcile their differences and agree on the same legislative language.
Freshman lawmaker Bobby Schilling, who owns and operates a pizzeria in Moline, Illinois, said that the 1099 provision threatens small businesses.
“As a small business owner, I understand the importance of limiting your expenditures to meet a budget.” Schilling, R-Illinois, said in a statement. “In these tough economic times, every dollar counts. By passing this bill, we do our best to keep the government out of the pockets of small business owners.”
Opponents of the repeal say it increase taxes for many middle class American families.
Although he says he personally supports the repeal of the 1099 requirements, Minority Whip Steny Hoyer voted against the bill because the way it is paid for would increase the burden on the middle class.
“The American people want Congress to come together and solve problems like this,” Hoyer, D-Maryland, said. “I hope both sides can reach an agreement and identify an offset that will make it through both chambers and be signed into law by the President, so that we can ease the burden on small businesses by repealing the 1099 provision in the near future.”