[Congressional Record Volume 157, Number 47 (Monday, April 4, 2011)]
[Senate]
[Pages S2069-S2070]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              1099 REPEAL

  Mr. COATS. Mr. President, I am here to essentially support the hard 
work of a colleague, Senator Johanns, in bringing to the floor tomorrow 
a vote to repeal the 1099 provisions in the current health care bill.
  As I campaigned throughout the State of Indiana over this past year, 
meeting with businesspeople and individuals running shops in a small 
town

[[Page S2070]]

and large businesses on the outskirts of busy manufacturing centers, 
several themes were repeated over and over and over. One was that we 
continue to have problems in creating jobs because of the massive 
amount of regulations that are flowing out of Washington that, at a 
time of fiscal downturn in particular, are keeping our businesses from 
going forward and hiring people, being competitive. We spend time in 
the back room with paperwork, filling out what seems to be unnecessary 
burdens imposed upon us by regulatory agencies.
  Some of these regulations are necessary. We all know that for 
purposes of health and safety, there are regulations that are important 
in keeping companies' feet to the fire in terms of making sure their 
workplace is a safe and healthy place to work. These are important, and 
there are others. But clearly there is an excess. What I heard people 
saying all across the State of Indiana was that our government has 
grown too big, it spends too much money and it overregulates. In 
particular, when it comes to business, that overregulation and 
overtaxation is impeding our ability to compete on a worldwide basis to 
provide the kinds of jobs and services America is used to providing in 
such a successful way.
  Tomorrow, this vote will deal with an aspect of the health care bill 
that was passed in the last Congress. Tucked away in that health care 
bill is a provision requiring every company, every church, every 
charity to submit a separate IRS 1099 form for taxes detailing and 
describing the goods they purchase in order to run their church, run 
their hospital, run their business, run their charity.
  I have talked to hospitals--small and rural, big and large--across 
the State of Indiana, and they say: Do you realize how many separate 
items we purchase every year of over $600? Do you understand how many 
hundreds, if not thousands, of prescription drugs we purchase in order 
to have them available here to perform our services in this hospital, 
how many bandaids, how many cotton patches, how many sophisticated 
drugs?
  Hundreds of thousands of items are purchased by large companies every 
year, and each one of those now has to be calculated as to whether the 
purchase price was more than $600 for the lot they buy, and it has to 
be detailed and then sent to Washington. There are not enough 
bureaucrats in Washington to begin to process the paperwork that would 
flood into this city. There are not enough buildings in this city to 
house those bureaucrats processing those forms. There are not enough 
warehouses in this city to store the forms that would flow in here. All 
for what reason? Because supposedly this is a way to collect more taxes 
on companies that have not submitted forms where they have actually 
purchased this particular material, even though they are required under 
the tax laws to honestly--and I believe it is almost unanimous; maybe 
99 percent of the time--do just that. So it is a solution without a 
problem.
  Clearly, what Senator Johanns has been attempting to do over the past 
several months and even in the last Congress is bring forward a bill 
that would repeal this onerous provision of the health care law.
  The U.S. Chamber of Commerce said this about the 1099 reporting 
requirement:

       At a time when they can least afford it, entities will have 
     to institute new complex record-keeping, data collection and 
     reporting requirements to track every purchase by vendor and 
     payment method. This provision will dramatically increase 
     accounting costs and could expose businesses to costly and 
     unjustified audits by the IRS.

  Even the IRS Information Reporting Program Advisory Committee has 
ruled against this, deeming this mandate ``burdensome'' with ``no 
measurable purpose.''
  Forcing businesses to spend time in the back room to fill out all 
these forms and do all this record keeping--and particularly those 
small businesses that do not have the back room, where the owner and 
the proprietor of the business is the one who has to fill out these 
forms instead of being out there selling his services or running his 
business--they are particularly burdened by this unnecessary 
regulation.
  Clearly, if we want to promote our businesses, help them hire more 
people, and get more people back to work, we have to release them from 
the burden of unnecessary regulation and, I would also add to that, 
taxation. So tomorrow, when this vote comes up, let's adopt the Johanns 
amendment to repeal this unnecessary and costly provision and send it 
to the White House for the President's signature.
  While we are at it, let's also continue to take a look at the health 
care bill because if this provision somehow survived scrutiny before 
passage, there must be many more of these in there. Let me just mention 
one of them that directly impacts my State.
  Medical device companies are a key industry in the State of Indiana. 
In fact, we are one of the leading States, if not the leading State in 
the country, for the number of people engaged in producing medical 
devices. That industry was slapped with a 2.3-percent sales tax on 
medical devices under the new health care law simply as a means to pay 
for the new health care law.
  This is an innovative industry, an industry which is at the cutting 
edge of technology, one of our best exporting industries. They sell all 
over the world. We talk about the loss of American capacity to 
manufacture. We have a skilled workforce in place, with thousands of 
people employed throughout the State of Indiana, with several hundred 
companies producing medical devices. They have developed the innovation 
and the skill to be the best in the world. Yet, just out of the blue, 
because we are looking for a pay-for in the health care bill--that had 
nothing to do with their production of that product or their business--
they were slapped with this $20 billion impact tax, a 2.3-percent sales 
tax, which turns out to be about $20 billion under the health care law.
  I have given these statistics for just the one State of Indiana. I 
know Minnesota and a number of other States also are engaged in the 
medical device business. But singling out, though, the medical device 
manufacturers to help pay for the massive costs of the health care law, 
hinders job growth and stifles innovation. This is a resource-rich, 
research-rich industry in America that needs to be encouraged, not 
discouraged, that needs to have incentives to go forward, not 
disincentives, that does not need more regulation and higher taxes but 
needs to be viewed as producing a product that is the best in the world 
and what the world wants to buy.
  So as we look at the health care bill, I am sure there are many 
provisions that need to be addressed. I, of course, am on record for 
repealing and starting over for reasons I have stated before and will 
not go into now. I think it is fatally flawed. I think starting over 
would give us a far more cost-effective, incremental improvement in 
ways to address our health care needs in this country without breaking 
the bank.
  Nevertheless, if we cannot do that, we need to keep looking at 
situations such as what we are going to be addressing tomorrow, the 
1099 repeal, and situations such as I have just described with the 
medical device tax.
  Mr. President, with that, I will close by urging my colleagues to 
come and vote for the repeal of the 1099 provision that has been 
brought forward by Senator Johanns.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COATS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________