[Congressional Record Volume 157, Number 48 (Tuesday, April 5, 2011)]
[Senate]
[Pages S2099-S2108]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COMPREHENSIVE 1099 TAXPAYER PROTECTION AND REPAYMENT OF EXCHANGE
SUBSIDY OVERPAYMENTS ACT OF 2011
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will proceed to the consideration of H.R. 4, which the clerk
will report.
The assistant legislative clerk read as follows:
A bill (H.R. 4) to repeal the expansion of information
reporting requirements for payments of $600 or more to
corporations, and for other purposes.
The ACTING PRESIDENT pro tempore. The Senator from New Jersey.
Amendment No. 284
Mr. MENENDEZ. Madam President, I rise to call up amendment No. 284,
cosponsored by Senators Kerry and Rockefeller, which is at the desk and
ask for its immediate consideration.
The ACTING PRESIDENT pro tempore. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from New Jersey [Mr. Menendez], for himself,
Mr. Kerry, and Mr. Rockefeller, proposes an amendment
numbered 284.
Mr. MENENDEZ. I ask unanimous consent that the reading of the
amendment be dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The amendment is as follows:
(Purpose: To protect small businesses from health insurance premium
increases or losses of health insurance coverage)
On page 4, after line 3, insert the following:
(c) Study of the Effects on Small Businesses of Increases
in the Amounts of Health Care Credit Overpayments Required to
Be Recaptured.--
(1) In general.--The Secretary of Health and Human Services
shall conduct a study to determine if the amendments made by
this section--
(A) will result in an increase in health insurance premiums
within the Exchanges created by the Patient Protection and
Affordable Care Act for employees or owners of small
businesses; or
(B) will result in an increase in the number of individuals
who do not have health insurance coverage, a disproportionate
share of which are employees and owners of small businesses.
(2) Effect of increases.--If the Secretary determines under
paragraph (1) that there will be an increase described in
subparagraph (A) or (B), or both, then, notwithstanding
subsection (b), the amendments made by this section shall not
apply to taxable years ending after the date of such
determination and the Internal Revenue Code of 1986 shall be
applied and administered to such taxable years as if such
amendments had never been enacted.
The ACTING PRESIDENT pro tempore. Under the previous order, there
will now be 60 minutes of debate equally divided and controlled between
the two leaders or their designees.
The Senator from New Jersey.
Mr. MENENDEZ. Thank you, Madam President. I understand Senator Baucus
is on his way from a meeting, and in the interim I will start off and
recognize myself.
I offer this amendment on behalf of middle-class families and on
behalf of small businesses. I support repealing the 1099 reporting
requirement and have, in fact, voted no less than six times on this
floor to repeal 1099 in this body. However, I strongly believe we must
do so in a manner that does not increase the burden on our small
businesses and their employees, and that is exactly what I fear H.R. 4
does.
The broad bipartisan support for 1099 repeal comes from the fact that
it provides relief to small businesses, but the only problem with this
version of the repeal is that while it provides relief on the one hand,
it may very well take it away with the other. It repeals the 1099
reporting requirements but, at the same time, I am concerned it
increases the health care burden on the very same people to whom we are
seeking to provide relief.
Some have argued we have already used this very same offset before.
We have. Therefore, there is no reason to be concerned now.
The difference is, however, H.R. 4 is very different than what we did
4 months ago, and it risks driving up health insurance costs and
cutting health insurance coverage for small businesses and middle-class
families. It increases tax penalties--tax penalties. As we approach
April 15, I know we are all very tax sensitive. It increases tax
penalties on middle-class families, leaving some with a potential tax
burden of $10,000 or more.
How would most middle-class families deal with a tax bill of $10,000
or more just because their income may have increased $1 above the
eligibility limit during the year for which they got a subsidy?
Some have also argued my amendment will block implementation of the
1099 repeal. That is just factually incorrect. It is an outright
misstatement of the facts. My amendment simply directs the Secretary of
Health and Human Services after--emphasize ``after''--the 1099 repeal
passes into law to study the offset in H.R. 4 and determine its effect
on small businesses. If the study finds the offset increases health
care costs or decreases coverage for small businesses, then current law
on the repayment remains in effect. If the study says, no, it didn't do
any of those things, then there is no harm.
Let me be clear. We all want 1099 repeal. My amendment does not in
any way affect the repeal of 1099. My colleagues can vote for this
amendment and for H.R. 4 because this would repeal 1099. The only
potential change my amendment makes would be to the risky offset in the
underlying amendment, and only if the study finds that it hurts small
businesses after the repeal has taken place.
My colleagues on the other side of the aisle are trying to frame this
debate as either for or against small business, but they are, in my
mind, both helping and harming them at the same time under H.R. 4. With
this amendment, we can have not only the ability to help small
businesses and repeal the 1099 provision, but we can also ensure that
small businesses and their employees will not get hurt at the end of
the day.
For those who may consider opposing my amendment, think of this: On
the one hand, if you do not believe this offset will hurt small
businesses and their employees, there is no harm in voting for it
because you are saying the study will not show an impact and the offset
will remain in place.
However, if you believe my amendment would have a revenue score, you
are assuming that the offset hurts small businesses and their
employees. Either option would argue for supporting my amendment.
Either it has no impact, in which case there should be no problem
supporting it, or it provides protections for small businesses and
their workers, in which case you should want to support it.
I realize what I am concerned about is the harmful effect of this
offset provision won't hit small businesses until 2015, and I know the
voices for 1099 repeal are much louder than those against the payback
tax. But I also know this is an issue that we will hear about when our
constituents get those tax bills at that time, when this provision goes
into effect and taxpayers get that first big $10,000, or more, surprise
on their tax bill.
Do you want to be on the record as having given them the tax bill or
do you want to be on the record as trying to have saved them from it
and saved rising costs for small businesses in their health insurance?
I think you want to be on the side of this amendment and having saved
them from it.
In closing, I ask, why in the world--especially during these fragile
economic times--would we want to do anything that could raise the costs
on small businesses? That is why my amendment is supported by entities
such as the Main Street Alliance, a probusiness organization; Families
USA; the American Cancer Society; Cancer Action Network; Health Care
for America Now, to mention a few.
With my amendment, we can protect those who earn a living making our
Nation's small businesses run and repeal 1099 without delay. To me,
that is the ultimate show of support for small business.
Madam President, I urge support of my amendment. I reserve the
remainder of my time.
The ACTING PRESIDENT pro tempore. The Senator from Utah is
recognized.
Mr. HATCH. Madam President, I am going to defer my remarks until
after
[[Page S2100]]
the Senator from Nebraska speaks. I want to defer to this wonderful
Senator because he has done more than any other person in trying to
repeal this awful tax provision, this 1099 tax increase provision, and
he deserves the credit. I want him to lead off in our debate. Then I
will probably speak after that. I yield for the Senator from Nebraska.
The ACTING PRESIDENT pro tempore. The Senator from Nebraska is
recognized.
Mr. JOHANNS. Madam President, I wish to start today by thanking the
distinguished Senator from Utah for his courtesy. I appreciate it
immensely. It has been a bit of a long and tortured process to get here
today. I appreciate the opportunity to speak first.
All of us work across our States. In communities such as Kearney and
Scottsbluff, NE--and I walk those streets often, whether it is in a
parade or calling on people--I am struck by the number of small
businesses that fill the storefronts.
These businesses are the heart and soul of the community. They
contribute to the Little League, they give high school students their
first jobs, and they ask ``how are the kids doing'' when you stop in to
see them. They symbolize what it truly means to be a community. They
also symbolize the single most powerful job creating force in our
Nation.
Sixty-four percent of the new jobs in our Nation are created by small
businesses as they expand and grow. So when their livelihood is
threatened by an ill-advised policy, we all in the Senate agree that
something must be done.
Shortly after the health care bill was passed, I, like my colleagues,
began hearing from small business owners who were very concerned about
a provision that was put into the health care bill on page 737. As the
number of concerned job creators continued to mount, I knew, and others
in the Senate knew, we had to do something about it.
Passing 1099 repeal exemplifies why I came to the Senate--taking an
issue that is important to our State and our country and literally
building support in this body to do the right thing.
I won't deny there have been some frustrations along the way. I
certainly didn't expect to have to present the legislation seven times
to get to the finish line. But it has been well worth the effort. I
could not be more pleased by the bipartisan support that has built this
effort.
Today presents an opportunity for Members of both parties to unite
behind doing the right thing for our job creators.
If we pass H.R. 4 and send it on to the President's desk today, it
won't be a victory for Republicans or Democrats. I certainly won't
report it that way. It is not going to be a victory for a single
Senator. It will be a victory for millions of small business owners who
have been begging us to do something about this provision for a long
time now, and it will be a victory for common sense.
That is why today is such an important day in the Senate. In a few
short minutes, we will have an opportunity to put to an end the looming
1099 paperwork mandate once and for all. Small businesses in my State
and all across the country are depending upon us today to act.
One real-life example came from a Nebraska company called Hayneedle.
It is an online retailer of home furnishings and other home products.
With the new 1099 requirement, Hayneedle estimates that the annual cost
of compliance is literally going to exceed $100,000 for them--$100,000.
That would go a long way to hiring more people.
Adding insult to injury, the 1099 reporting requirement creates a
perverse incentive to consolidate suppliers. Fewer suppliers means less
1099 paperwork. This leaves Main Street small suppliers--those
businesses I was talking about--out in the cold as big suppliers win
more and more business.
Dale Black, a Kentucky Fried Chicken franchise owner from Grand
Island, told me:
. . . want to be a good corporate citizen in the communities
I have restaurants, but the 1099 forces me not to hire local
venders and tradesmen in my community, instead giving work to
a single regional contractor.
With 40 million businesses, nonprofits, churches, and local
governments bracing for the 1099 avalanche of paperwork, every Senator
could come to the floor today and tell similar stories.
With all these Main Street businesses and their workers hanging in
the balance, there is just one clear choice for our businesses: We must
advance the House-passed version and, in all due respect to my
colleague from New Jersey, reject the Menendez alternative, the
Menendez amendment.
You see, only the House-passed version will quickly reach the
President's desk and provide immediate relief to our job creators.
Adding anything on, passing anything else will cause our job creators
to wait on the sidelines yet again, because then, of course, we will
have different versions--the House version and the Senate version--and
I fear we will go off into never-never land. But you see, time has run
out on our job creators.
When this debate began, the mandate seemed a long way away. It was
out there on the horizon. We had a long time to work through these
issues. But now 8 months has passed. We voted over and over again, and
we never could quite get to the finish line.
It is decision time for businesses. They are feeling the pressure to
set up the accounting systems they will need to comply with this
tangled mess of tax forms that even the IRS doesn't support.
This mandate forces many to set aside money for software that could
instead be spent on those new workers, and that is why it is so
important that the Senate pass the House bill today.
Put simply, a vote for the House bill is a vote to actually solve the
problem. Again, in all due respect to my colleague from New Jersey, the
amendment tells our small businesses that they will have to wait
longer. Our path actually gives our job creators some certainty they
need to grow their businesses. But the other path, as I said, is a
guaranteed sidetrack back into never-never land.
While one approach tells small businesses we are with them, the other
says we are going to continue to work through this and wrangle back and
forth, instead of enacting a bipartisan solution today.
The House of Representatives has already led by example. It is
important to recognize that. They passed their 1099 repeal on March 3--
more than a month ago--and it got great bipartisan support--314 to 112,
and 76 Democrats voted for that repeal.
Not only does this legislation pay for the repeal of the 1099
mandate, it actually reduces the deficit by $166 million over the next
10 years.
It requires repayment of improper health exchange subsidies--a
concept the Senate passed unanimously in December to pay for the doc
fix legislation.
If we fail to pass the House version today, well, the job creators
are being told that they have to divert more of their resources to
managing unnecessary paperwork.
Let's not vote for another alternative that is going to stall this
out again. Let's cast a vote today that sends a clear message. Let's
defeat the pending Menendez amendment, and then let's pass the bill so
we can get it to the President and get it signed. I am hoping this gets
strong bipartisan support. I want to say again that the victory today
is not for either party or for a single Senator; it is for the job
creators who are depending upon our action today.
The PRESIDING OFFICER (Mr. Tester). The Senator from Montana.
Mr. BAUCUS. Mr. President, my colleague from New Jersey proposed what
I think is a very reasonable amendment to the revenue provision of the
repeal of this 1099 provision. I plan to support that. It is a good
amendment.
One of the key provisions in the Affordable Care Act is the tax
credit that will be available to millions of low- and middle-income
Americans to purchase health insurance if their employer doesn't make
coverage available. That is a credit. It goes to middle- and low-income
Americans. The provision that will pay for 1099 repeal will increase
the amount that many Americans will have to pay at the end of the year
if they receive a credit to purchase their health insurance and their
income ends up being higher than the income on which their credit was
based.
I share Senator Menendez's concern that this will cause an undue
burden.
[[Page S2101]]
This could increase premiums that people pay under health insurance, or
reduce the benefits of their health insurance coverage, especially in
the small business community, and he believes his amendment would
reverse the provision--and it does in fact do that--if the HHS
Secretary determines it will increase premiums or if it will reduce
coverage, that is on health insurance coverage for small businesses.
The 1099 repeal is all about small businesses. That is primarily why
we are going to repeal 1099. We don't want to turn around and hurt
small businesses in the same bill. There is a real possibility that
that would happen with a straight repeal, without the Menendez
perfecting amendment.
I urge my colleagues to join me in supporting the Menendez amendment.
In effect, that amendment would repeal 1099, which virtually every
Member of the body wants to do, but also will make sure the
consequences do not hurt small businesses, which will otherwise find
their premiums increased or their coverage diminished.
Senator Menendez very wisely anticipates that potential problem with
his amendment by essentially providing that the increase would not
occur as a premium--that is, the 1099 repeal would not occur if the HHS
Secretary determines that it will increase premiums or also reduce
coverage for small businesses. I urge my colleagues to support the
Menendez amendment.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, today we will vote on the Menendez
amendment and then on Senator Johanns' amendment to repeal the 1099 tax
increase provisions of the health spending law and the small business
law. As you know, the health spending law was enacted a little over a
year ago, and we are already here trying to undo some of the damage
that this massive law has imposed on small businesses. We have heard
from small business owner after small business owner who was shocked
and frustrated to learn the 1099 provision in the health spending law
would require small businesses to send out a much larger number of IRS
Form 1099s.
This provision was a counterproductive assault on businesses, and it
was unleashed for one reason: to provide the dollars to pay for
ObamaCare's $2.6 trillion in new spending; in other words, to try and
back up that spending.
Just to be clear, this is what this provision requires: Starting on
January 1, 2012, if a business pays at least $600 in total in 1 year to
a single payee, that business must send an IRS Form 1099 to the IRS as
well as to that payee. Since businesses frequently pay at least $600 in
1 year to all kinds of different payees, this means the health spending
law has created an enormous paperwork burden on our businesses,
including many small businesses. This is exactly the kind of burden
small businesses do not need to face at this time, when we are still
facing unemployment at 8.8 percent, and small businesses create 70
percent of new jobs in this country.
The National Federation of Independent Business, whose membership is
made up of small businesses, hit the nail on the head in its April 4,
2011, letter about this provision. This is what they had to say:
We are writing to urge you to support H.R. 4, the
Comprehensive 1099 Taxpayer Protection repayment of Exchange
Subsidy Overpayments Act of 2011, and to oppose the Menendez
amendment. Passing H.R. 4 without any amendments is the best
way to finally repeal the expanded Form 1099 requirements
included in the Patient Protection and Affordable Care Act.
Tax paperwork and compliance are already major expenses for
small businesses, and the new reporting requirements included
in PPACA will substantially increase these costs.
The new paperwork mandate will require businesses to track and report
to the IRS most business-to-business transactions above $600 in a
calendar year. For many businesses this could amount to hundreds of new
reportable transactions, which involves sending a 1099 to both the IRS
and the reportable business.
That is a pretty strong statement, and the message is clear. This
provision will impose considerable hardship on American businesses. The
result of this provision will be much more paperwork and much less job
creation. I spoke this morning to the Tax Executives Institute, which
is one of the most prestigious institutes in our country, especially on
taxes. What I announced to them was that I think we are going to get
rid of this provision, and I almost got a standing ovation. They went
wild down there this morning.
This provision will impose considerable hardship on American
businesses, especially small businesses. The result of this provision
will be much more paperwork but a lot less job creation.
In addition, Monday, April 4, 2011, the U.S. Chamber of Commerce
weighed in on this provision with a similar diagnosis. This is how the
chamber put it:
The 1099 reporting mandate, if not repealed, will force
more than 40 million entities, including governments,
nonprofits, and small and large businesses, to comply with
onerous data collection and IRS information filing burdens on
virtually all non-credit card purchases totaling $600 or more
with any vendor in a tax year. At a time when they can least
afford it, entities will have to institute new, complex
recordkeeping, 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. The Chamber strongly supports H.R. 4, which would
repeal the 1099 mandate, and strongly opposes the Menendez
amendment.
Mr. President, I ask unanimous consent to have printed in the Record
the letters from both the NFIB, the representative of small businesses
in this country, and the Chamber of Congress.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Chamber of Commerce
of the United States of America,
Washington, DC, April 4, 2011.
To the Members of the United States Senate: The U.S.
Chamber of Commerce, the world's largest business federation
representing the interests of more than three million
businesses and organizations of every size, sector, and
region, strongly supports H.R. 4, the ``Comprehensive 1099
Taxpayer Protection and Repayment of Exchange Subsidy
Overpayments Act of 2011'' and strongly opposes an amendment
by Sen. Menendez, which could leave intact the 1099
requirement.
The 1099 reporting mandate, if not repealed, will force
more than 40 million entities, including governments,
nonprofits, and small and large businesses, to comply with
onerous data collection and IRS information filing burdens on
virtually all noncredit card purchases totaling $600 or more
with any vendor in a tax year. 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.
The Chamber strongly supports H.R. 4, which would repeal
the 1099 mandate, and strongly opposes the Menendez
amendment. The Chamber may consider including votes on, or in
relation to, these issues in our annual How They Voted
scorecard.
Sincerely,
R. Bruce Josten,
Executive Vice President,
Government Affairs.
____
April 4, 2011.
Dear Senator: On behalf of the undersigned organizations,
we are writing to urge you to support H.R. 4, the
``Comprehensive 1099 Taxpayer Protection and Repayment of
Exchange Subsidy Overpayments Act of 2011,'' and to oppose
the Menendez Amendment. Passing H.R. 4, without any
amendments, is the best way to finally repeal the expanded
Form 1099 requirements included in the Patient Protection and
Affordable Care Act (PPACA).
Tax paperwork and compliance are already major expenses for
small businesses and the new reporting requirements included
in PPACA will substantially increase these costs. The new
paperwork mandate will require businesses to track and report
to the IRS most business-to-business transactions above $600
in a calendar year. For many businesses, this could amount to
hundreds of new reportable transactions, which involves
sending a 1099 to both the IRS and the reportable business.
According to an SBA study, the cost of complying with the
tax code is 66 percent higher for small business as compared
to a large business. Small businesses lack the compliance
capabilities to track and report each new transaction, and in
order to comply with this new requirement they will have to
pull capital out of the business that could be better used to
reinvest in the business and create jobs.
Passage of H.R. 4, without amendments, is the best way to
remove the costly impact the 1099 requirement would have on
millions of businesses.
Sincerely,
Aeronautical Repair Station Association; Agricultural
Retailers Association; Air Conditioning Contractors of
America;
[[Page S2102]]
Alabama Nursery & Landscape Association; Alliance for
Affordable Services; Alliance of Independent Store
Owners and Professionals; American Association for
Laboratory Accreditation; American Bakers Association;
American Council of Engineering Companies; American
Council of Independent Laboratories; American Farm
Bureau Federation; American Foundry Society; American
Hotel & Lodging Association; American Institute of
Architects; American Nursery & Landscape Association;
American Petroleum Institute; American Rental
Association; American Road & Transportation Builders
Association; American Society of Interior Designers;
American Subcontractors Association, Inc.; American
Supply Association; American Veterinary Distributors
Association.
American Veterinary Medical Association; AMT--The
Association For Manufacturing Technology; Arizona
Nursery Association; Associated Builders and
Contractors; Associated Equipment Distributors;
Associated General Contractors of America; Associated
Landscape Contractors of Colorado; Association of Free
Community Papers; Association of Ship Brokers & Agents;
Association of Small Business Development Centers;
Automotive Aftermarket Industry Association; Automotive
Recyclers Association; Bowling Proprietors Association
of America; California Association of Nurseries and
Garden Centers; California Landscape Contractors
Association; Commercial Photographers International;
Community Papers of Florida; Community Papers of
Michigan; Community Papers of Ohio and West Virginia;
Connecticut Nursery & Landscape Association; Direct
Selling Association; Door and Hardware Institute.
Electronic Security Association; Electronics
Representatives Association (ERA); Florida Nursery,
Growers & Landscape Association; Free Community Papers
of New York; Georgia Green Industry Association;
Healthcare Distribution Management Association; Hearth,
Patio & Barbecue Association; Idaho Nursery & Landscape
Association; Illinois Green Industry Association;
Illinois Landscape Contractors Association (ILCA);
Independent Community Bankers of America; Independent
Electrical Contractors, Inc.; Independent Office
Products & Furniture Dealers Association; Indiana
Nursery and Landscape Association; Industrial Supply
Association; Industry Council for Tangible Assets;
International Association of Refrigerated Warehouses;
International Foodservice Distributors Association;
International Franchise Association; International
Housewares Association; International Sleep Products
Association; Kentucky Nursery and Landscape
Association.
Louisiana Nursery and Landscape Association; Maine
Landscape and Nursery Association; Manufacturers'
Agents Association for the Foodservice Industry;
Manufacturers' Agents National Association;
Manufacturing Jewelers and Suppliers of America;
Maryland Nursery and Landscape Association;
Massachusetts Nursery & Landscape Association, Inc.;
Michigan Nursery and Landscape Association; Mid-
Atlantic Community Papers Association; Midwest Free
Community Papers; Minnesota Nursery & Landscape
Association; Motor & Equipment Manufacturers
Association; NAMM, National Association of Music
Merchants; National Apartment Association; National
Association for Printing Leadership'; National
Association for the Self-Employed; National Association
of Home Builders; National Association of
Manufacturers; National Association of Mortgage
Brokers; National Association of Mutual Insurance
Companies; National Association of RV Parks &
Campgrounds; National Association of Theatre Owners;
National Association of Wholesaler-Distributors.
National Christmas Tree Association; National Club
Association; National Community Pharmacists
Association; National Council of Chain Restaurants;
National Council of Farmer Cooperatives; National
Electrical Contractors Association; National Electrical
Manufacturers Representatives Association; National
Federation of Independent Business; National Home
Furnishings Association; National Lumber and Building
Material Dealers Association; National Multi Housing
Council; National Newspaper Association; National
Office Products Alliance; National Restaurant
Association; National Retail Federation; National
Roofing Contractors Association; National Small
Business Association; National Tooling and Machining
Association; National Utility Contractors Association;
Nationwide Insurance Independent Contractors
Association; Nebraska Nursery and Landscape
Association; New Mexico Family Business Alliance; New
Mexico Nursery & Landscape Association.
New York State Nursery and Landscape Association; North
American Die Casting Association; North Carolina Green
Industry Council; North Carolina Nursery and Landscape
Association; Northeastern Retail Lumber Association;
NPES The Association for Suppliers of Printing,
Publishing & Converting Technologies; OFA--An
Association of Floriculture Professionals; Office
Furniture Dealers Alliance; Ohio Nursery and Landscape
Association; Oregon Association of Nurseries; Outdoor
Power Equipment Institute; Pennsylvania Landscape and
Nursery Association; Pet Industry Distributors
Association; Petroleum Marketers Association of
America; Plumbing-Heating-Cooling Contractors
Association; Precision Machined Products Association;
Precision Metalforming Association; Printing Industries
of America; Professional Golfers Association of
America; Professional Landscape Network; Professional
Photographers of America; Promotional Products
Association International.
S Corp Association; Safety Equipment Distributors
Association; Saturation Mailers Coalition; SBE Council;
Secondary Materials and Recycled Textiles Association;
Self-Insurance Institute of America (SIIA); Service
Station Dealers of America and Allied Trades; SIGMA,
the Society for Independent Gasoline Marketers of
America; Small Business Council of America; Small
Business Legislative Council; SMC Business Councils;
Society of American Florists; Society of Independent
Gasoline Marketers of America; Society of Sport & Event
Photographers; South Carolina Nursery & Landscape
Association; Southeastern Advertising Publishers
Association; Specialty Equipment Market Association;
Specialty Tools & Fasteners Distributors Association;
SPI: The Plastics Industry Trade Association; Stock
Artists Alliance; TechServe Alliance; Tennessee Nursery
& Landscape Association.
Texas Community Newspaper Association; Texas Nursery &
Landscape Association; Textile Care Allied Trades
Association; Textile Rental Services Association of
America; Tire Industry Association; Toy Industry
Association, Inc.; Turfgrass Producers International;
U.S. Black Chamber Inc.; U.S. Chamber of Commerce; Utah
Nursery & Landscape Association; Virginia Christmas
Tree Growers Association; Virginia Green Industry
Council; Virginia Nursery & Landscape Association;
Washington State Nursery & Landscape Association;
Western Growers Association; Window and Door
Manufacturers Association; Wisconsin Community Papers;
Women Construction Owners & Executives; Women Impacting
Public Policy; Wood Machinery Manufacturers of America.
Mr. HATCH. Mr. President, President Obama and congressional Democrats
tried to sell the American people on their clunker of a health care law
by saying it would bring down Federal health care spending. That would
have been a miracle if it were true. But even the Obama
administration's own actuary at the Centers for Medicare and Medicaid
Services has confirmed that claim was false and that Federal spending
on health care would actually increase as the result of the health
spending law. Some estimate as much as $2,100 per policy.
The Cash for Clunkers Program was bad enough, but Democrats managed
to outdo themselves spending $2.6 trillion in cash for this clunker of
a health care law. This reminds me of a scene from the movie
``Vacation.'' At the beginning of that film, Clark Griswold goes into a
dealership to buy a new car before setting off with his family for a
cross-country trip to Wally World. Yet instead of getting the new car
he had ordered as part of a trade-in, the dealer gave him a pea green
Family Truckster, as we can see in this beautiful photograph. Chevy
Chase was, of course, Griswold. One only had to look at the Family
Truckster to know that it was a lemon.
Clark told the dealer he wanted his old car back. Unfortunately for
Clark--or the actor, in this case--his old car was crushed before he
could get it back. You can imagine the consternation Chevy Chase faced.
You can see the Family Truckster in this picture behind me. There it
is, with Chevy standing on top as Clark Griswold.
Clark's experience with the Family Truckster is a metaphor for
Americans' experience with ObamaCare. Our Nation's health care system
might have needed some work--there is no question about that--but the
vast majority of Americans were satisfied with their health care. Yet
Democrats gave Americans ObamaCare which, like the Family Truckster, is
a true jalopy, and they did their best to crush our former health care
system before we could stop them.
[[Page S2103]]
I also add that Americans, such as Clark Griswold, eventually reached
their wits' end. The tea party, the gubernatorial elections in New
Jersey and Virginia, the election of my colleague, the junior Senator
from Massachusetts--all of these actions were the result of Americans
standing up and letting it be known that they were sick and tired of
Washington recklessly spending their money and recklessly regulating,
and they were not going to take it anymore.
To borrow from Robert Daltrey, Americans made it clear that they are
not going to get fooled again, but that did not stop the Democrats from
trying.
At the time the health spending bill was being enacted, President
Obama and congressional Democrats were raising taxes to make it appear
they were partially paying for the $2.6 trillion in new spending
contained in the partisan health spending law. When the Democrats say
this health law saved money, ask yourself this: If the law was actually
going to reduce Federal spending on health care, would these massive
tax increases have been necessary?
In the end, ObamaCare was more of the same--a tax-and-spend law that
vastly increased the size of an already-bloated Federal Government.
President Obama and congressional Democrats should not have raised
taxes and cut Medicare to fund a new entitlement program--an
unsustainable entitlement program. After all, the three largest
entitlement programs--Social Security, Medicare, and Medicaid--are
already headed for a fiscal crisis. To create a fourth massive
entitlement program when these three entitlement programs were already
going broke was fiscal insanity. That is one reason we need to repeal
the health spending bill in its entirety and start over.
Senator Johanns' amendment to repeal the 1099 provisions in the
health spending law and small business law is a good first step in
getting rid of the partisan health spending bill entirely.
I think a lot of people, including Members of Congress who voted for
the small business bill last year, were surprised to learn that
Congress enacted a second 1099 provision last year. This is separate
and apart from the 1099 provision enacted in the partisan health
spending law. This new 1099 provision was enacted as part of the small
business law last year. I voted against it. By the way, this provision
is already in effect since it applies to payments made on or after
January 1 of this year.
This 1099 provision causes landlords who are not even actively
engaged in the rental real estate business to send in a Form 1099 to
the IRS. It is required when they pay more than $600 in 1 year to a
vendor for goods or services. For example, suppose a landlord spends
more than $600 over the course of a year at a home improvement store.
That landlord must send out a Form 1099 and send it to the IRS, as well
as the provider of goods or services. In addition, that landlord must
track down the vendor's taxpayer identification number, which is not
necessarily an easy task to do.
This law creates a large and unexpected paperwork burden on these
landlords. With the real estate market struggling, we should not impose
new paperwork burdens on landlords which only hurt the real estate
industry even more.
I urge my colleagues to vote yes on the Senator Johanns' amendment
and vote no on the Menendez amendment. As I said, Senator Johanns'
amendment is a downpayment on a total repeal of the onerous health care
law that over time will wreck our Nation's health care system and lead
to an explosion of new Federal spending.
I ask my colleagues to vote no on Senator Menendez's amendment.
I personally wish to pay tribute to my colleague from Nebraska for
his indefatigable efforts in trying to repeal these terrible paperwork
burdens that nobody is going to look at anyway, that really are not
going to make any difference and are just going to cost an arm and a
leg over time. I thank him for the hard work he has done. He deserves
credit for continuing to fight these battles.
I hope all of us on the Senate floor will get rid of this monstrosity
today and hopefully work together to try and straighten out what is a
very bad bill in ObamaCare.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, how much time is remaining on each side?
The PRESIDING OFFICER. The majority controls 19\1/2\ minutes; the
minority controls 8 minutes.
Mr. BAUCUS. Mr. President, I first wish to correct the record. I
stated earlier that if the Menendez provision is triggered, the 1099
repeal will not go into effect. That is not correct. What I meant to
say is if the Menendez provision is triggered, then the new true-up
rules in H.R. 4 will not go into effect. That is an important
distinction. No matter what the result, 1099 will, in fact, be
repealed. That is the main point.
I commend all Senators, including Senator Johanns and others, who
want to repeal 1099. It is very much the view of this body--I, myself,
want to repeal 1099, but I also think the provision offered by Senator
Menendez is an improvement on repeal, even though repeal will actually
go into effect.
I will also say that there are a lot of statistics bandied about
regarding health care reform. The Fidelity company does an analysis of
how much it costs people age 65 and older to pay for their health care.
That is their premium cost as well as their insurance costs or out-of-
pocket costs. Fidelity company has just concluded in the last week or
so that as a consequence of health care reform, the number of dollars
that seniors will have to pay for health care will actually be lower--
not higher, but lower--than what it otherwise would be on account of
passage of that bill.
Budget Proposal
I want to say a couple words about the budget proposal offered by the
House, the Ryan budget proposal. It is important for people to know
what is in that budget. What is in it basically? Let me tell you. That
budget cuts $2.2 trillion in health care costs over 10 years--$2.2
trillion in cuts in health care costs over 2 years. It repeals health
care reform. That is what the Ryan resolution does. His budget
resolution repeals health care reform.
What else does it do? It dismantles Medicare. It dismantles Medicare
as we know it. Health care reform extends the life of the Medicare
trust fund by another 12 years. The Ryan House Republican budget
proposal repeals Medicare as we know it. It turns into a voucher
program. Basically, it says this: There have been reports that it costs
about $15,000 to pay for seniors under Medicare for 1 year. There are
reports that the Ryan proposal says we are just going to give people
$6,000 and give it to a health insurance company. First, that is a big
cut, 15 down to 6 and, second, it is to a health insurance company. So
the net effect of the Ryan proposal is very simple. It transfers wealth
from seniors, from children--because of Medicaid and people in nursing
homes--it transfers wealth from them to whom? Health insurance
companies. The Medicare proposal is a transfer of wealth from seniors
to health insurance companies.
Health care reform did the opposite. We extended the life of
Medicare. How did we do it? In part, by cutting health insurance
payments. So we helped seniors in health care reform and we cut health
insurance companies. The Ryan House Republican budget proposal does the
opposite; it cuts benefits to seniors by a whopping amount and it takes
that wealth and transfers it over to health insurance companies that
will get higher premiums, higher bonus payments, their stock returns
will go up, and their administrative expenses will go up. I don't think
that is what we want to do. But make no mistake, that is the effect of
the Ryan proposal.
Also, I might say, it reduces income taxes by about $1.2 trillion. So
the real net of the effect of the Ryan proposal is, take money away
from people and give it to the health insurance companies and the
wealthy. That is what the Ryan proposal does. That is exactly what it
does. The Ryan proposal takes money, about $5.8 trillion roughly, over
10 years--takes it away from people, especially seniors and kids on
Medicaid, elderly who happen to be on Medicaid--there are big
reductions further in discretionary spending--and lowers income taxes
by about $1.2 trillion. It lowers them. That is how it achieves budget
savings of $5.8 trillion. He cuts,
[[Page S2104]]
cuts to the bone, and then cuts about $1.2 trillion more than he has to
because $1.2 trillion is reductions in income tax.
I want the public to know what is in the Ryan budget. That is what it
is. Let me say it one more time, clearly, simply. It is a transfer of
money away from seniors and from kids on Medicaid and elderly on
Medicaid over to health insurance companies--higher bonuses, higher
salaries, stock goes up, and in addition it transfers money away from
people to pay for tax cuts for the wealthy--not tax cuts for the
unwealthy but tax cuts for the wealthy.
How did he do that? He lowers the top rate to 25 percent so the
wealthy pay less taxes. He lowers the corporate down to 25 percent, so
the bigger companies pay less taxes. That is how he does it. While we
are talking about a short-term CR around here, and we are talking about
a longer term CR around here, when we start talking about budgets,
let's look closely at what is actually in that Ryan proposal.
Of course, we have to lower our budget deficits. Of course, we have
to significantly lower our budget deficits. But, of course, we have to
do it fairly, so all Americans are part of the solution, so health
insurance companies are also part of the solution, so the most wealthy
are also part of the solution. All Americans have to be part of the
solution. The Ryan budget does not do that. It says only the seniors--
we get the budget deficit reduction on the backs of seniors, on the
backs of people who otherwise receive medical care under Medicaid and
some other things, but also we shift income to the most wealthy by
lowering their taxes.
I hope when we are voting on the Menendez amendment, which is
important to do, also in the background we understand what is going on
in the other body. They may bring this up and try to pass it this week.
They may try to pass it on the floor next week--I don't know. But we
should recognize it for what it is and come up with a deficit reduction
proposal that is fair, fair to all Americans, not on the backs of the
seniors for the benefit of health insurance and not on the backs of
average Americans for the benefit of the most wealthy, by lowering
their income taxes by $1.2 trillion over 10 years. That is not fair.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, we are headed toward $20 trillion in
spending. The President's program, the Democrat's program, is maybe
one-half of 1 percent, which is almost nothing. This is their program,
a blank sheet of paper. That is what it is. At least Congressman Ryan,
the Budget Committee chairman over in the House, is trying to do
something that is worthwhile. By the way, just so everybody knows, the
rich are not going to be treated tremendously respectfully in this
matter. They are going to lose, on the top level, on entitlement
programs. There is a cutback for those who reach a certain level of
income. This is not as simple as it sounds, nor is it a desire to take
anything away from senior citizens. It is trying to get our country's
budget under control and it is out of control.
Mr. President, I yield up to 5 minutes to the distinguished Senator
from Maine, if I can.
The PRESIDING OFFICER. The Senator from Maine.
Ms. SNOWE. Mr. President, I rise in support of H.R. 4, to repeal the
mandate on small businesses throughout this country. The failure to
repeal this onerous mandate of the 1099 requirement would have a
profound impact on millions of businesses across this country and on
the already stressed job market, as employers have to grapple with the
enormity of this cost, not to mention the compliance with this
regulation.
I certainly commend the author of this legislation, the Senator from
Nebraska, Mr. Johanns, for his tenacity, his perseverance, his
relentlessness in bringing this to the forefront not only of the Senate
but to the Congress and to the country. I hope we can join with our
counterparts in the House of Representatives in an impressive,
bipartisan vote because we do need to bring this to a conclusion.
I also appreciate that the Senator from Nebraska included in this
repeal the provision I recommended, which was to repeal the provision
that the mandate would be extended to rental property owners. This was
a requirement that was included in the Small Business Jobs Tax Relief
Act that became law last fall--inexplicably, given the fact that the
1099 quagmire was already well known to everyone. Yet it was included
in that legislation that became law--so those who are rental property
owners will have to comply with this mandate as well. The big
difference is, this requirement takes effect in January of this year so
unsuspecting owners will already be subject to the burden of reporting
to the Internal Revenue Service any business expenditures for goods and
services that exceed $600 per vendor, similar to all the other
requirements under the law that will begin for 2012 for all small
business owners.
As we all know, this new mandate on small businesses was imposed in
the health care reform law. Yet it had nothing to do with reforming the
health insurance industry. It had everything to do with raising
revenues and placing inordinate burdens on small businesses. The rental
real estate was added to this paperwork morass, and what is
disconcerting is the fact that it directly affects those States that
depend on tourism, such as my State of Maine, with respect to rental
property.
I think it is going to be very important to make sure people
understand this requirement will be repealed as part of this
legislation. Failure to repeal this mandate will raise the compliance
costs for small businesses astronomically. Already, as estimated by the
NFIB, the major voice for small businesses in this country--they have
estimated that small business compliance costs with respect to tax
compliance alone is $74 an hour. Tax compliance is the most expensive
form of paperwork. So the burden on small businesses will be strenuous
and inordinate. It is already disproportionate. Their costs are 67
percent higher than larger firms.
There is no question, given the ubiquitous nature of this
requirement, that small businesses all across this country will come
under the weight of these very stringent regulations, having to submit
1099 forms. In fact, I was talking to an individual the other day who
heads up an organization which has 1,650 members and what did he say?
He said every one of these members will have to file anywhere from 200
to 600 forms every day. That is 200 to 600 forms on a daily basis.
They didn't want to talk about taxes. They didn't want to talk about
anything else. They wanted to talk about whether we were going to
repeal the 1099 requirement. That is why there is so much support for
this repeal. It is so important, during these difficult economic times,
that we avoid imposing any tough regulations on our small business
owners.
The other point to be made is, this 1099 requirement is vastly
different from what is familiar to most Americans. For most Americans,
1099 forms generally come from their financial institutions to report
the interest they have earned on their savings accounts or to report
the interest they pay on their mortgage to their lenders. That
requirement is specific, to make sure they report directly their tax
liability on the income earned in that specific tax year. Now we are
reverting to a very different form by requiring businesses to report in
the aggregate all their expenditures for goods and services to any
vendor. That is a very different requirement.
My concern is one that has not been widely discussed. The fact is, by
doing so, by making this conversion how we use the 1099 form, it is
essentially putting in place an infrastructure, a system for a value-
added tax, by requiring businesses to report all this information. So
we could essentially have a system in place, where we could have a
functioning value-added tax by taking the next step based on the
information that is already required to be submitted by this
requirement.
It is urgent we repeal this mandate. It is important to send that
message. It is important to repeal this mandate in its entirety.
I yield the floor.
Mr. LEVIN. Mr. President, today we vote on a bill that would repeal
the 1099 reporting expansion that was made
[[Page S2105]]
into law under the Affordable Care Act. This reporting requirement was
designed to improve tax compliance. However, many businesses fear this
expansion could end up burdening not those who seek to evade their
taxes, but those who innocently do business with those who do. This is
why I support the repeal of this reporting requirement in the
Affordable Care Act.
Unfortunately, I do not agree with how this bill would pay for this
repeal. This bill would hurt individuals who receive modest pay
increases or bonuses during the course of a year. The Affordable Care
Act subsidizes insurance coverage for middle-class families making
under 400 percent of the Federal poverty level who don't have access to
employer provided coverage. Under current law, people close to 400
percent line are protected from substantial tax penalties if they
receive a modest raise or bonus that bumps them into a higher income
bracket. This bill would eliminate that protection and impose a
retroactive penalty on those families that could amount to thousands of
dollars. Those families, even if they end up over the line by $1, would
have to pay back the entire amount of their subsidies. For a family of
four, for instance, this could mean owing more than $5,900 on their
taxes because of an unexpected increase in income from $89,000 a year--
398 percent of the FPL--to $89,500--$100 above the 400 percent FPL.
I support the amendment offered by Senator Menendez that directs the
Secretary of the Department of Health and Human Services to study the
impact of this bill on health care premiums and coverage for small
businesses and their employees. If the HHS Secretary finds that the
changes in repayment amounts under this bill would increase health
insurance premiums for small businesses or their employees or increase
the number of uninsured, the repayment amounts would revert to current
law.
I look forward to continuing to improve the Affordable Care Act and
will continue to fight for affordable and available health care for all
Americans.
Mr. BINGAMAN. Mr. President, I rise today to raise serious concerns
about the offset proposed for H.R. 4.
I am very supportive of the underlying intent of H.R. 4--repeal of
the 1099 reporting requirements, which were created in Affordable Care
Act. In fact, I have voted to repeal these requirements over the last
few months.
However, I have deep concerns about the offset proposed in H.R. 4.
The offset represents harmful policy and has been strongly objected to
by President Obama in a Statement of Administrative Policy or ``SAP''
issued on March 1.
Specifically, H.R. 4 would increase the tax burden on American
families seeking health insurance coverage in the new health insurance
exchanges. The legislation does so by increasing the amount of
repayment that must be made by families who receive health insurance
premium subsidies. Note that these taxpayers could be reporting their
income correctly to the exchange throughout the year but still owe
substantial payment or ``true-up'' when they file their taxes simply
because the look-back period for subsidy eligibility encompasses an
entire year. For example, under H.R. 4, families that have no income
for part of the year--for example because of the loss of a job--could
owe $12,000 in true-up payments because they secure employment midway
through the year.
I am strongly supportive of ensuring that taxpayers receive accurate
subsidies to help offset the cost of health insurance in the new State
exchanges. Many experts throughout the Nation have told us, however,
that it is critical to provide reasonable hold harmless levels for
taxpayers given that subsidies are paid on a monthly basis and the look
back period to determine income eligibility encompasses a year. These
experts tell us that without such a hold harmless, taxpayers'
willingness to participate in the new exchanges will be chilled
resulting in only sicker, more costly populations coming to the
exchange. This in turn, will drive up costs for individuals, families,
and businesses purchasing coverage in the exchange. In fact, the Joint
Committee on Taxation has confirmed to me that they project hundreds of
thousands of Americans will forgo the receipt of health insurance as a
result of H.R. 4 and that a majority of the offsetting revenue from the
amendment is generated by forgone health insurance coverage and
subsidies, not the recouping of overpayments.
I ask unanimous consent that President Obama's March 1 SAP be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Statement of Administration Policy
h.r. 4--comprehensive 1099 taxpayer protection and repayment of
exchange subsidy overpayments act of 2011
The Administration strongly supports efforts to repeal the
provision in the Affordable Care Act that established
information reporting requirements for tax purposes that
place an unnecessary bookkeeping burden on small businesses.
The Administration is committed to reducing the gap between
taxes legally owed and taxes paid, but believes that the
burden created on businesses by the new information reporting
requirement on purchases of goods that exceed $600, as
included in Section 6041 of the Internal Revenue Code as
modified by Section 9006 of the Affordable Care Act, is too
great.
However, the Administration has serious concerns about the
approach the Congress has taken to paying for the repeal. The
Administration strongly opposes the House's offset to pay for
this repeal in H.R. 4, which would undo an improvement
enacted with nearly unanimous support in the Medicare and
Medicaid Extenders Act that eliminated an egregious ``cliff''
in the tax system affecting middle income taxpayers.
Specifically, H.R. 4 would result in tax increases on certain
middle-class families that incur unexpected tax liabilities,
in many cases totaling thousands of dollars, notwithstanding
that they followed the rules. The Administration also notes
that a provision repealing the same information reporting
requirements in the FAA Air Transportation Modernization and
Safety Improvement Act would pay for the repeal with an
unspecified rescission of $44 billion that, in combination
with other proposals currently under consideration in
Congress, could cause serious disruption in a wide range of
services provided by the Federal government.
The Administration looks forward to continuing to work with
the Congress on the repeal of the information reporting
requirements in the course of the legislative process,
including finding an acceptable offset for the cost of the
repeal.
The PRESIDING OFFICER. Who yields time?
Mr. HATCH. Mr. President, how much time remains to both sides?
The PRESIDING OFFICER. The Senator from Utah has 1 minute 20 seconds,
the majority has 3\1/2\ minutes.
Mr. HATCH. I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I know we often read that Democrats and
Republicans cannot agree. Here is a news flash: We agree on repealing
1099. I have listened to my three distinguished colleagues spend a lot
of their time talking about repeal of 1099. We absolutely agree. I have
voted six times to do that. That is not an issue.
What is an issue, and my distinguished colleague from Nebraska--with
whom I have worked with before in passing some important legislation,
and I have a great deal of respect for him--talked about a victory for
small business. I agree. But I want a total victory for small business,
and a total victory for small business is not repealing 1099 and then
giving them a bigger tax bill for their employees or raising the cost
of insurance for that small business. A real victory is an opportunity
to make sure we repeal 1099--my amendment clearly has 1099 repeal going
forward--but then does a study that says if small businesses are going
to face higher costs or their employees are going to face a $10,000 tax
bill, then that part of it should not proceed.
If I am wrong, nothing will happen. The study will come. They will
say: No, small business is not going to have an increase; no, taxpayers
are not going get a surprise tax bill. Then the repeal will have
already gone through and there is no foul, no harm. But if I am right,
then voting against my amendment is voting for a tax bill for middle-
class families, voting to increase insurance on small businesses.
The issue about going quickly to the President, first of all, is a
priority. So if we pass this, this is not, as has been suggested, an
alternative; it is just a single amendment to the existing bill on a
provision that allows for the repeal to go through but makes sure small
businesses and individuals do not get higher costs. That can go to the
[[Page S2106]]
House. The House can pass it and send it to the President--away we go;
we do not have a problem. Helping small businesses by reducing their
paperwork while at the same time driving up health care costs and
forcing coverage cuts for small businesses is simply not good policy.
In all fairness, I did not hear voices rise up when this bill was
being delayed over the last week by some of my Republican colleagues
trying to get their amendments considered, and those amendments were
extraneous to small business. So we either have a double standard here
or a desperate attempt to defeat what I think is a good amendment.
The House could have taken up the amendment, H.R. 4, and passed it
into law by now. So I think it is somewhat disingenuous to have an
argument that says we can't afford one amendment to proceed on this
bill when our colleagues, at the beginning of this Congress, made a big
production about a full debate and an open amendment process on all
things considered on the Senate floor, but when there is one amendment
that is meant to protect taxpayers and small businesses, oh, no, that
is going to create an inordinate delay, after we had well over a week
of delays by Republican colleagues seeking extraneous amendments to a
small business bill. Please.
Now, I love Senator Hatch's jalopy. I remember that movie, took my
family to see it. But the worst jalopy would be taking away 1099 and
then going ahead and giving small businesses higher costs and a higher
tax bill for individuals. That is a real jalopy. That is a lemon.
So we have an opportunity to take away and undo and repeal the 1099.
My amendment permits that to go forward but at the same time makes sure
small businesses do not get hurt.
How will they get hurt? How may they get hurt? Well, a lot of States,
for example, are considering whether to combine their small business
and individual pools. For States that combine their pools, small
businesses could see an increase in premium costs. The healthiest
people with little to no health care costs will have the most
flexibility to decide whether to purchase coverage, and they may simply
pay the mandate penalty versus the potential for a $10,000 to $12,000
tax bill. With more healthy people opting out of buying insurance, the
pool of people who ultimately enroll in the exchanges that would
consist of, on average, less healthy individuals--that is going to push
up the premiums for everybody else buying insurance in the exchanges,
including small businesses and employees. That is only one example.
The other problem is, when you are facing your constituents, I hope
you are ready to tell them that through no fault of their own--when
they had a job, they lost their job, you know, 6 months into the year,
and they face the fact that they are still over the amount, and now
they are going to get a $10,000 tax bill or, on the contrary, they
didn't have a job when they got the subsidy, and then they got a job in
the middle of the year and they are a dollar over the amount, and they
are going to face a $10,000 tax bill. Is that what we want to do, send
that type of bill to families?
Finally, I appreciate hearing Senator Hatch say this is a downpayment
on total repeal of the health care law. Well, you know, if we are going
to do that, if that is what this is really all about, this is not
helping small businesses. Helping small businesses means we repeal 1099
and don't increase their costs and don't send their employees a $10,000
or higher tax bill.
So this is about, in my mind, making sure there is a win-win for
small businesses because if we want to repeal the health care law, then
that is about making sure we go back to preexisting conditions where a
husband who had a heart attack on the job can no longer get insurance;
where a child born at birth with a defect cannot get insurance; where a
woman was facing 150-percent higher premiums than a man simply because
she was a woman; where, in fact, you couldn't keep your child, up to
age 26, on your insurance as they are going through school; where, in
fact, we could close the prescription drug coverage for seniors. If
that is what we are talking about, that is a different subject, and we
can have that debate. But this debate is about making sure we repeal
1099 and making sure small businesses do not get higher costs and their
employees do not get a tax penalty. I think everybody should want to be
for that. We can send it straight to the House. The House can pass this
version and send it to the President. That is ultimately the
opportunity here.
I urge my colleagues to support my amendment. That is why the Main
Street Alliance, which also supports businesses, says: Our small
business owners are very supportive of efforts to remove the imposition
of the new 1099 reporting requirements. We cannot, however, accept a
pay-for that undermines other important provisions of the law that
helps small businesses and contains costs.
My amendment ensures that we do both--repeal 1099 and not put the
burden on small businesses in terms of higher health insurance costs,
and their employees. I urge passage of my amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, how much time remains?
The PRESIDING OFFICER. One minute 20 seconds, and the majority has
3\1/2\ minutes remaining.
Mr. HATCH. I ask unanimous consent that I give a minute to the
distinguished Senator from Nebraska and then, if there is not enough
time remaining, that I be given sufficient time, up to 2 minutes, with
an equivalent amount of time given to the other side, to make my
closing remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Nebraska.
Mr. JOHANNS. Mr. President, again with all due respect to my
colleague from New Jersey, there have been over 200 business groups
that have expressed opposition to the Menendez amendment, and that
would include the NFIB, the National Association of Manufacturers, the
Franchise Association, and the chamber of commerce. You see, requiring
people to pay back what they should not have received in the first
place is regarded as good government, not bad policy. That is what
should be happening.
The second thing I would say about this is that this becomes a
roadblock because we end up with a different House bill and a different
Senate bill. If this is such a great idea, attach the amendment to some
other bill that is coming along, and we can get the study done.
So, again, I appreciate the opportunity to work with Senator
Menendez, but I do believe very strongly that we need to defeat this
amendment.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, if you say you are for fiscal
responsibility, you need to oppose the amendment of my friend from New
Jersey. Here is why. The nonpartisan scorekeeper for tax legislation,
the Joint Committee on Taxation, tells us that the Menendez amendment
puts the savings on the House bill in doubt. That means that if the
Menendez amendment is adopted, the House bill will add to the deficit
by perhaps as much as $25 billion. The Menendez amendment would
maintain the risk of payment of billions in fraudulent, improper, or
excessive health insurance exchange subsidies. What is more, the Senate
unanimously agreed to a similar offset on the doc fix bill.
My friends, if you were against fraudulent, improper, or excessive
health insurance payments before, stick to your guns--oppose the
Menendez amendment.
I yield the floor, and I am prepared to yield back any time we have.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I am compelled to answer because now I
hear about fraud and $25 billion. You cannot have it both ways. You
cannot say this amendment costs money--what the Joint Committee on
Taxation said is it could not determine a revenue score. And it is
important to point out that this amendment does not spend an additional
dime. And the only reason--the only reason--this amendment would have a
revenue effect would be if the offset increases health insurance costs
or cuts coverage for small businesses. Otherwise, there is no issue. So
you can't have it both ways. Either
[[Page S2107]]
there is an admission that it is going to cost small businesses more,
cost taxpayers more, or it is not. That is No. 1.
No. 2, this is not about fraud. This is not about someone seeking
something they did not have the right to receive. Fraud is individuals
who are deliberately underreporting their income or fraudulently trying
to get extra support. That is not what we do. Those enforcement
provisions in the law to combat fraud and abuse are untouched by my
amendment. This is simply about someone who honestly got a subsidy. And
we have a provision in the law that deals with how they pay back, but
it doesn't throw them over the cliff and send them a surprise $10,000
tax bill. So that is simply not exactly quite the same thing.
Yes, the doc fix--we did use a provision to deal with the SGR with
the doc fix, but we did not put small businesses and families at harm,
as H.R. 4 does.
So the reality is that this amendment permits repeal to move forward.
After the repeal, a study is done. If there is no harm, if it
supposedly does not cost small businesses any more money, does not
drive up insurance costs, does not cost the taxpayer maybe $10,000 or
$12,000, fine. But if it does, then we would ultimately not have that
harm come upon small businesses, come upon individual taxpayers with a
surprise bill. And we could, of course, if that is the end result,
which we don't know--that is why the Joint Tax Committee could not come
up with a determination. We will not know until the study is done.
Instead of having a risky venture, let's have the actual facts. Repeal
will have gone through. We can protect small businesses and those
taxpayers, and, if necessary, we can find a different offset. If they
are wrong and I am right, that this concern about taxpayers getting a
surprise bill and small businesses having greater insurance costs is
true, then we will protect them and we can look for a different offset
at the time. Repeal will have taken place no matter what.
Why would you not want to protect small businesses and taxpayers from
getting a surprise bill? That is all my amendment does, and that is why
I urge its passage.
Mr. HATCH. Mr. President, I would like to briefly respond to my
friend from New Jersey's comments about the Joint Committee on
Taxation's analysis of his amendment.
The Joint Committee on Taxation corresponded with Senator
McConnnell's office on Senator Menendez's amendment. I ask unanimous
consent to have printed in the Record relevant portions of that e-mail
discussion.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Correspondence to Staff of Senator McConnell From Tom Barthold, Chief
of Staff, Joint Committee on Taxation, Dated April 5, 2011
You requested an estimate of the Menendez amendment
(FRA11028).
The Johanns amendment (which is essentially H.R. 4)
increases maximum repayment caps for overpayment of health
insurance exchange subsidies for taxpayers in certain income
categories below 400 percent of the federal poverty level
(``FPL''), and removes the caps for taxpayers above 400
percent FPL. We estimate that this portion of H.R. 4 raises
$24.9 billion relative to present law. The Menendez amendment
(FRA11028) would amend this amendment to require that the
Secretary of Health and Human Services conduct a study to
determine if the new repayment caps in H.R. 4 will (A)
increase health insurance premiums within Exchanges for
employees or owners of small business, or (B) result in an
increase in the number of individuals who do not have health
insurance, a disproportionate share of which are employees or
owners of small businesses. If the study determines that one
or both of (A) or (B) would occur, the changes to the caps in
H.R. 4 would not be implemented.
We do not project an increase in health insurance premiums
in the Exchanges for employees or owners of small businesses
as a result of H.R. 4. We project that there would be an
increase in the number of people who are uninsured as a
result of the new caps in H.R. 4, because some people would
avoid purchasing insurance through the Exchanges in order to
avoid possible future increases in tax liability.
We would expect that about 1/3 of the adults who fail to
enroll in the exchanges for this reason would be unemployed.
Of those who are employed, we would expect that they would be
roughly equally divided between being employees or owners of
firms less than 50, and employees or owners of firms greater
than 50. Thus, a larger share of small business employees
would be affected than of large business employees, although
small business employees and owners would comprise less than
half of the newly uninsured.
Because it is unclear how the Secretary will interpret the
terms ``disproportionate share'' and ``small business,'' we
cannot predict the findings of this study. If the study
conducted by the Secretary reaches a similar conclusion to
our estimate, and the Secretary deems that this would meet
the criteria of a disproportionate share of employees or
owners of small businesses among the newly uninsured, this
amendment would result in failure to implement the new caps
under H.R. 4, thus losing $24.9 billion relative to the
Johanns amendment.
Tom Barthold.
Mr. HATCH. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second. The yeas and nays are ordered.
The question is on agreeing to the Menendez amendment.
The clerk will call the roll.
The bill clerk called the roll.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Idaho (Mr. Risch).
Further, if present and voting, the Senator from Idaho (Mr. Risch)
would have voted: ``nay.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 41, nays 58, as follows:
[Rollcall Vote No. 48 Leg.]
YEAS--41
Akaka
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boxer
Brown (OH)
Cantwell
Cardin
Carper
Casey
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Harkin
Inouye
Johnson (SD)
Kerry
Kohl
Lautenberg
Leahy
Levin
Menendez
Merkley
Mikulski
Murray
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Stabenow
Udall (CO)
Udall (NM)
Whitehouse
Wyden
NAYS--58
Alexander
Ayotte
Barrasso
Blunt
Boozman
Brown (MA)
Burr
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Hagan
Hatch
Hoeven
Hutchison
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Klobuchar
Kyl
Landrieu
Lee
Lieberman
Lugar
Manchin
McCain
McCaskill
McConnell
Moran
Murkowski
Nelson (NE)
Nelson (FL)
Paul
Portman
Pryor
Roberts
Rubio
Sessions
Shelby
Snowe
Tester
Thune
Toomey
Vitter
Warner
Webb
Wicker
NOT VOTING--1
Risch
The PRESIDING OFFICER. On this vote, the yeas are 41, the nays are
58. Under the previous order requiring 60 votes for the adoption of
this amendment, the amendment is rejected.
The question is on the third reading of the bill.
The bill was ordered to a third reading and was read the third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass?
Mr. JOHANNS. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Idaho (Mr. Risch).
Further, if present and voting, the Senator from Idaho (Mr. Risch)
would have voted ``yea.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 87, nays 12, as follows:
[Rollcall Vote No. 49 Leg.]
YEAS--87
Alexander
Ayotte
Barrasso
Baucus
Begich
Bennet
Bingaman
Blumenthal
Blunt
Boozman
Boxer
Brown (MA)
Brown (OH)
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Coburn
Cochran
Collins
Conrad
Coons
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Feinstein
Franken
Gillibrand
Graham
Grassley
Hagan
Hatch
Hoeven
[[Page S2108]]
Hutchison
Inhofe
Isakson
Johanns
Johnson (SD)
Johnson (WI)
Kerry
Kirk
Klobuchar
Kohl
Kyl
Landrieu
Lee
Lieberman
Lugar
Manchin
McCain
McCaskill
McConnell
Menendez
Merkley
Moran
Murkowski
Nelson (NE)
Nelson (FL)
Paul
Portman
Pryor
Reed
Roberts
Rockefeller
Rubio
Sessions
Shaheen
Shelby
Snowe
Stabenow
Tester
Thune
Toomey
Udall (CO)
Udall (NM)
Vitter
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--12
Akaka
Durbin
Harkin
Inouye
Lautenberg
Leahy
Levin
Mikulski
Murray
Reid
Sanders
Schumer
NOT VOTING--1
Risch
The PRESIDING OFFICER. Under the previous order requiring 60 votes
for passage, the bill is passed.
The Senator from Colorado is recognized.
____________________