[Congressional Record (Bound Edition), Volume 157 (2011), Part 3]
[House]
[Pages 3149-3174]
[From the U.S. Government Publishing Office, www.gpo.gov]




   COMPREHENSIVE 1099 TAXPAYER PROTECTION AND REPAYMENT OF EXCHANGE 
                    SUBSIDY OVERPAYMENTS ACT OF 2011

  Mr. CAMP. Mr. Speaker, pursuant to House Resolution 129, I call up 
the bill (H.R. 4) to repeal the expansion of information reporting 
requirements for payments of $600 or more to corporations, and for 
other purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Johnson of Illinois). Pursuant to House 
Resolution 129, the amendment in the nature of a substitute consisting 
of the text of the amendment recommended by the Committee on House Ways 
and Means printed in H.R. 705 is adopted and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:


                                 H.R. 4

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Comprehensive 1099 Taxpayer 
     Protection and Repayment of Exchange Subsidy Overpayments Act 
     of 2011''.

     SEC. 2. REPEAL OF EXPANSION OF INFORMATION REPORTING 
                   REQUIREMENTS TO PAYMENTS MADE TO CORPORATIONS 
                   AND TO PAYMENTS FOR PROPERTY AND OTHER GROSS 
                   PROCEEDS.

       (a) Application to Corporations.--Section 6041 of the 
     Internal Revenue Code of 1986 is amended by striking 
     subsections (i) and (j).
       (b) Payments for Property and Other Gross Proceeds.--
     Subsection (a) of section 6041 of such Code is amended--
       (1) by striking ``amounts in consideration for property,'', 
     and
       (2) by striking ``gross proceeds,'' both places it appears.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made after December 31, 2011.

     SEC. 3. REPEAL OF EXPANSION OF INFORMATION REPORTING 
                   REQUIREMENTS FOR RENTAL PROPERTY EXPENSE 
                   PAYMENTS.

       (a) In General.--Section 6041 of the Internal Revenue Code 
     of 1986 is amended by striking subsection (h).
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2010.

     SEC. 4. INCREASE IN AMOUNT OF OVERPAYMENT OF HEALTH CARE 
                   CREDIT WHICH IS SUBJECT TO RECAPTURE.

       (a) In General.--Clause (i) of section 36B(f)(2)(B) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(i) In general.--In the case of a taxpayer whose 
     household income is less than 400 percent of the poverty line 
     for the size of the family involved for the taxable year, the 
     amount of the increase under subparagraph (A) shall in no 
     event exceed the applicable dollar amount determined in 
     accordance with the following table (one-half of such amount 
     in the case of a taxpayer whose tax is determined under 
     section 1(c) for the taxable year):


----------------------------------------------------------------------------------------------------------------
  ``If the household income (expressed as a
         percent of poverty line) is:                           The applicable dollar amount is:
----------------------------------------------------------------------------------------------------------------
Less than 200%...............................  $600
At least 200% but less than 300%.............  $1,500
At least 300% but less than 400%.............  $2,500.''.
----------------------------------------------------------------------------------------------------------------


[[Page 3150]]

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2013.

  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Camp) and 
the gentleman from Michigan (Mr. Levin) each will control 75 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Camp).


                             General Leave

  Mr. CAMP. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous materials on H.R. 4.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
  Today the House considers H.R. 4, legislation repealing one of the 
job-killing tax increases enacted in the Democrats' health care law 
last year. This legislation provides a pathway to achieving a goal that 
is shared by Republicans and Democrats in the House and Senate alike, 
and by the Obama administration--repealing the form 1099 reporting 
requirements enacted last year.
  Before I get into the details of H.R. 4, I would like to take a 
moment to recognize and commend my colleague and friend, Congressman 
Dan Lungren of California. He first brought this issue to light, and 
through his hard work we are here today to vote on a bill that has 
enjoyed strong bipartisan support.
  We have been here talking about 1099s before. Some have even gone so 
far as to say there seems to have been 1,099 votes to repeal 1099s. 
While we have attempted in the past to repeal this misguided feature of 
last year's health overhaul, today we turn a corner and move H.R. 4 
from the House to the Senate, so that it will hopefully soon be sent to 
the President for his signature. Only then will small businesses and 
families have certainty that they will not be buried under an avalanche 
of tax paperwork.
  In 2010, as one of many ways to finance a trillion dollar health care 
law, tax information reporting rules were expanded. These new rules 
require businesses to issue a form 1099 for any payments to 
corporations rather than just individuals, and for any payments for 
property rather than just services or investment income that exceeds 
$600 over the course of a year.
  This previously little-known provision quickly became an item of 
great concern to small business employers across the country. The 
National Federation of Independent Business, whose 350,000 members 
support H.R. 4, said this newly enacted reporting requirement would 
have a direct negative impact on small business.
  Also brought forward by Mr. Tiberi of Ohio in September of last year, 
a form 1099 reporting requirement was expanded again to help pay for 
the small business lending law. This expansion treats the recipient of 
rental income from real estate as engaging in the trade or business of 
renting property. Unless repealed, families and individuals will be 
forced to fill out paperwork if they do something as basic as replace a 
refrigerator in an apartment they rent out. The National Association of 
Realtors, which supports H.R. 4, called this provision not only another 
paperwork burden but a trap for all small landlords.
  Mr. Speaker, neither of these provisions reflects the wishes or needs 
of the American people. The most important issue on their minds is 
jobs. Let me say it again: jobs, jobs, and jobs. But despite the call 
for policies that can create a better climate for job creation, 
Congress has enacted policies that make this harder.
  H.R. 4 will accomplish three goals. First, the legislation repeals 
the expanded 1099 reporting requirements on small businesses. Second, 
it repeals the new 1099 reporting requirements for rental property.

                              {time}  1030

  Third, it protects taxpayers by recovering overpayments of taxpayer-
funded government subsidies.
  What that means, and I know we are going to hear a lot about it from 
the other side today, is that if this bill passes, anyone earning more 
than 400 percent of poverty, nearly $95,000 for a family of four in 
2014, and who is ineligible for the exchange subsidies under the 2010 
health care law will be required to pay back all, not just some, of the 
improper payments. I would like to note that this is the same level 
Democrats used in the original law enacted last March.
  For those earning less than 400 percent of poverty, the level of 
repayment of those overpayments is also increased. This is similar to 
the path taken by Democrats in December when they adjusted the 
repayment amounts as a way to finance the so-called ``doc fix.''
  Now, I noticed yesterday that there was a lot of huffing and puffing 
on the floor about alleged tax increases in H.R. 4. I want to be sure 
to clear up any confusion on this point.
  The Joint Committee on Taxation says in its score that in addition to 
a $20 billion spending cut, there is a $5 billion increase in revenue 
to the government from this one provision. But that doesn't mean people 
are necessarily paying more in taxes. Now, how is that possible? 
Simple. According to the nonpartisan Joint Committee on Taxation, under 
the better enforcement rules of H.R. 4, some people won't go into the 
exchange to accept a taxpayer-funded subsidy because they would be 
required to pay a larger share or, in some cases, all of the subsidy 
back under H.R. 4. Paying back money you weren't entitled to is not a 
tax increase.
  For example, under current law, a household making $105,000 might 
think it's worth understating its income, or at least not updating 
their income information, in order to receive a $12,000 exchange 
subsidy because they would only have to pay back $3,000 if caught; but 
the household is less likely to do so under H.R. 4 because it would 
have to pay back the entire subsidy given there was no eligibility for 
the subsidy in the first place.
  So let's be clear here. Voluntarily choosing not to enroll in 
government health care and thus foregoing the associated tax subsidies 
that one may not be eligible for might result in more government 
revenue, according to the Joint Committee on Taxation. But that is not 
a tax increase.
  H.R. 4 is endorsed by more than 225 organizations, including the 
American Farm Bureau, the U.S. Chamber of Commerce, the American 
Osteopathic Association, and Americans for Tax Reform. Grover Norquist 
of ATR wrote he was especially pleased about the repeal of the 1099 
provisions and the bill is ``a net tax cut.'' That's because despite 
the claims to the contrary, H.R. 4 reduces Federal spending by nearly 
$20 billion over the next 10 years. It also reduces the deficit by $166 
million over that same time. That's probably why the bill is supported 
by Americans for Prosperity and the National Taxpayers Union as well.
  Mr. Speaker, today we have the opportunity to come together and 
advance a bill that is a win for small business, a win for families, 
and a win for taxpayers across America. Cast a ``yes'' vote for H.R. 4 
and give them that win.

                Supporters of 1099 Repeal (as of 3/2/11)

                     [Committee on Ways and Means]

       Aeronautical Repair Station Association; Agricultural 
     Retailers Association; Air Conditioning Contractors of 
     America; Alabama Nursery & Landscape Association; Alliance 
     for Affordable Services; Alliance of Independent Store Owners 
     and Professionals; American Association for Laboratory 
     Accreditation; American Bakers Association; American Bankers 
     Association; American Beekeeping Federation; American Council 
     of Engineering Companies; American Council of Independent 
     Laboratories; American Farm Bureau Federation'; 
     Americans for Prosperity; American Foundry Society; American 
     Hotel & Lodging Association; American Institute of 
     Architects; American Institute of Certified Public 
     Accountants; American Medical Association; American Mushroom 
     Institute.
       American Nursery & Landscape Association; American 
     Osteopathic Association; American Petroleum Institute; 
     American Physical Therapy Association; American Rental 
     Association; American Road & Transportation Builders 
     Association; American Sheep Industry Association; American 
     Society of Association Executives; American Society of 
     Interior Designers; American Soybean Association; American 
     Subcontractors

[[Page 3151]]

     Association, Inc.; American Sugar Alliance; American Supply 
     Association; American Veterinary Distributors Association; 
     American Veterinary Medical Association; Americans for Tax 
     Reform; AMT--The Association For Manufacturing Technology; 
     Arizona Nursery Association; Assisted Living Federation of 
     America; 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; 
     Computing Technology Industry Association; Connecticut 
     Nursery & Landscape Association; Council of Smaller 
     Enterprises; Direct Selling Association; Door and Hardware 
     Institute.
       Electronic Security Association; Electronics 
     Representatives Association (ERA); Farm Credit Council; 
     Financial Services Institute, Inc.; Florida Nursery, Growers 
     & Landscape Association; Free Community Papers of New York; 
     Georgia Green Industry Association; Hampton Roads Technology 
     Council; Healthcare Distribution Management Association; 
     Hearth, Patio & Barbecue Association; Idaho Nursery & 
     Landscape Association; Illinois Green Industry Association; 
     Illinois Landscape Contractors Association (ILCA); Illinois 
     Technology Association (ITA); Independent Community Bankers 
     of America; Independent Electrical Contractors, Inc.; 
     Independent Office Products & Furniture Dealers Association; 
     Indiana Nursery and Landscape Association; Indoor Tanning 
     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 Federal Credit Unions; 
     National Association of Home Builders; National Association 
     of Manufacturers; National Association of Mortgage Brokers; 
     National Association of Mutual Insurance Companies; National 
     Association of Realtors'; National Association of 
     RV Parks & Campgrounds; National Association of State 
     Departments of Agriculture; National Association of Theatre 
     Owners; National Association of Wheat Growers; National 
     Association of Wholesaler-Distributors; National Barley 
     Growers Association; National Cattlemen's Beef Association; 
     National Chicken Council; National Christmas Tree 
     Association; National Club Association; National Community 
     Pharmacists Association.
       National Corn Growers Association; National Cotton Council; 
     National Council of Agricultural Employers; 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 Milk Producers Federation; 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 Small Business 
     Network; National Sunflower Association; National Taxpayers 
     Union.
       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; Northwest Dairy 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; Oregon Nursery Association; 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; 
     Public Lands Council; 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; Southeast Dairy Farmers 
     Association; Southeast Milk, Inc.; Specialty Equipment Market 
     Association; Specialty Tools & Fasteners Distributors 
     Association; SPI: The Plastics Industry Trade Association; 
     Start Over! Coalition; Stock Artists Alliance; TechQuest 
     Pennsylvania; 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; The 
     National Grange of the Order of Patrons of Husbandry; Tire 
     Industry Association; Toy Industry Association, Inc.; 
     Turfgrass Producers International; U.S. Apple Association; 
     U.S. Canola Association; U.S. Chamber of Commerce; United Egg 
     Producers; United Fresh Produce Association; United 
     Producers, Inc.; United States Dry Bean Council; USA Dry Pea 
     & Lentil Council; USA Rice Federation; Utah Nursery & 
     Landscape Association; Virginia Christmas Tree Growers 
     Association; Virginia Green Industry Council; Virginia 
     Nursery & Landscape Association; Virginia Technology 
     Alliance; Washington State Nursery & Landscape Association; 
     Western Growers Association; Western Peanut Growers 
     Association; Western United Dairymen; Window and Door 
     Manufacturers Association; Wisconsin Community Papers; Wood 
     Machinery Manufacturers of America.

  I reserve the balance of my time.
  Mr. LEVIN. I yield myself as much time as I shall consume.
  Let's be clear what the issue is today. The issue is not repeal of 
this provision, of 1099. We on this side not only favor repeal, but all 
of us who were here last session voted for it. We voted to repeal it. 
It failed because only two people on the minority, then minority side, 
voted for the bill. They didn't like the pay-for.
  Mr. Camp mentions the NFIB. They supported our effort last year to 
repeal 1099.
  So, again, the issue is not repeal. We have made that clear in the 
past, while the effort to repeal was blocked on the Republican side 
last session. The reason they did not vote ``yes,'' they said, was 
because they did not like the pay-for.
  The pay-for closed tax loopholes, closed tax loopholes, and they 
stood up and said, no, we can't vote for the bill because of that. 
Ironically, most of the loopholes closed in that effort have now become 
law. So that effort last year to block repeal essentially was to block 
the loophole effort that has now become the law of this land. That 
should be clear. The issue is not repeal. The issue is how you pay for 
that repeal.
  The Senate has now voted to repeal 1099 and apparently the now 
majority does not like the pay-for in the Senate bill.
  What does this bill provide? Well, in very simple terms, in clear 
terms, in unmistakable terms, the pay-for is an increase on middle-
income families. It increases how much they will have to pay to the IRS 
if their income increases over what was projected when they would have 
obtained health insurance.
  Let me be very clear, the people were playing by the rules once the 
law became effective. It wasn't that they were ineligible. They were 
eligible, period. So no one should say they were not eligible, that 
somehow they misled, that somehow they misrepresented.

[[Page 3152]]

Now, these are middle-income families who would have become eligible 
playing by the rules.
  So this is a tax increase, if this bill becomes effective, on middle-
income families in future years. Mostly, it will be on families with 
incomes between $80,000 and $110,000. These are estimates.
  It can well be that a small increase in income beyond what was 
anticipated can lead to an increase by as much as $12,000. That's the 
amount that could be required in a check from the taxpayer to the IRS, 
and Joint Tax projects that the average increase will be about $3,000.
  Well, it's been said, it was said in our committee and then before 
the Rules Committee yesterday, that it's not a tax increase. So let me 
be clear by reading the language that's in the bill:
  If the advance payments to a taxpayer exceed the credit allowed by 
this section, the tax imposed by this chapter for the taxable year 
shall be increased.
  It is in clear simple English. So let no one stand up here and say 
it's not a tax increase when it is.
  Let me also, if I might, read from the Statement of Administration 
Policy that was issued yesterday.
  ``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.''
  I want to read it again.
  ``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.''
  Now, it was said yesterday at the Rules Committee that this is not a 
tax increase because it would become effective at a later date, 2014, 
when the subsidies under the health reform bill become effective.

                              {time}  1040

  Well, if you use that logic, we could, this year, increase taxes for 
everybody by, say, 5 percent, and that would not be a tax increase 
because it would be for a later year.
  In a word, if this bill would become law, it would mean a tax 
increase for hundreds of thousands of middle income taxpayers.
  Also, according to Joint Tax, it would have this effect, that about 
266,000 people would not be covered with health insurance because of 
the provisions in this bill.
  So, in a few words, what this bill would do would be to saddle middle 
income taxpayers in future years, pure and simple. What we should do is 
to go back and find a responsible way to pay for the repeal of 1099.
  And I close by the following paragraph from the Statement of 
Administration Policy, ``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.''
  What this bill would do would be to provide an unacceptable offset, 
one that would burden hundreds of thousands of middle income taxpayers 
in our country. We should not do that, period.
  I reserve the balance of my time.
  Mr. CAMP. I yield 2 minutes to the gentlewoman from Washington State 
(Mrs. McMorris Rodgers).
  Mrs. McMORRIS RODGERS. Thank you, Mr. Chairman.
  I rise in strong support of H.R. 4, the Small Business Paperwork 
Reduction Mandate Elimination Act of 2011. There's not a single issue 
that I hear more about from Washington State businesses than the 1099 
requirement that made its way into last year's health care law. Not 
only is this provision an administrative nightmare for employers, it 
has the potential to devastate small businesses. In fact, NFIB 
estimates that the average business will have to submit at least 95 
forms under the new requirement, a costly increase from the current 
handful that's required today.
  Even tax consultants have said this 1099 is more onerous than any tax 
that the IRS could collect from small businesses. At a time when our 
economy is struggling, jobs are scarce and unemployment continues to 
hover near 10 percent, the last thing we should do is make it more 
difficult on our employers, particularly the small businesses that make 
up the backbone of our economy and create most of the jobs in America.
  The 1099 is just one in a number of policies that have created a 
climate of fear and uncertainty for the private sector. Businesses 
don't know what regulatory hurdles they will have to jump through or 
the increased costs they will incur in the short or long term. We need 
to give them certainty. We need to have them start expanding and grow 
their businesses again. And a first good step is the repeal of the 1099 
requirement.
  I urge support.
  Mr. LEVIN. I yield such time as he may consume to someone who has 
been leading the effort to repeal 1099 in a responsible way for the 
middle-income families of America, the gentleman from New York (Mr. 
Crowley).
  Mr. CROWLEY. I thank the gentleman from Michigan (Mr. Levin) for 
yielding me this time.
  Mr. Speaker, I rise in strong opposition to this bill not because I 
oppose the repealing of the 1099 reporting requirements. I do. I have a 
record of supporting 1099 repeal and relieving America's small 
businesses from onerous paperwork and onerous regulations. What I'm 
opposed to is paying for this small business tax bill by increasing 
taxes on working middle class Americans. And that is exactly what this 
legislation will do.
  Let's not kid ourselves. Democrats offered a different path. Last 
July, we put forward legislation to repeal the 1099 reporting 
requirements, and we paid for it by eliminating loopholes in the Tax 
Code that reward those exporting U.S. jobs overseas. And, the Senate 
has offered an alternative path as well. Last month, they 
overwhelmingly passed a bipartisan repeal of the 1099 reporting 
requirement, which did not include a tax increase on middle class 
workers.
  But my Republican colleagues in the majority here in the House, who 
have continually preached lower taxes, less regulation and fiscal 
discipline, have refused either of these alternative approaches. 
Instead, my Republican colleagues are forcing a vote today on H.R. 4, a 
measure that will impose a $25 billion new tax on middle class 
families. Yes, you heard that right. It is only 59 days since my 
Republican colleagues have assumed majority control of the House of 
Representatives, and they're already breaking their campaign pledge of 
no new taxes, a pledge that 234 of 241 sitting Republican Members of 
the House signed.
  And, no, Republicans are not taxing the wealthiest 1 percent to pay 
for this small business relief bill. They are raising taxes on middle 
class workers, like firefighters, police officers, nurses and teachers, 
the very American families who work day in and day out to make their 
financial ends meet, the very American families under attack today in 
Wisconsin, in Indiana, in Ohio, and across the Midwest.
  Now, the Republicans will not admit that embedded in H.R. 4 is a tax 
increase on the middle class. But the facts are the facts. The Joint 
Committee on Taxation says the Republican bill is a tax increase, 
citing how it will raise $25 billion in new revenue. That is 
congressional-speak for a tax increase. Even Grover Norquist, the 
author of the ``Taxpayer Protection Pledge,'' has said, ``Americans for 
Tax Reform has always followed Committee on Joint Taxation 
methodology.''
  Yet, still my Republican friends deny and deny and deny. But, my 
friends, read my lips--Republicans are raising taxes. Just look at the 
contents of the bill. Under the Democratic health reform law, an 
American family of four earning $88,000 a year is obligated to pay no 
more than 9.5 percent of their income on health care premium costs. In 
this example, that is $8,360 that comes out of their pocket on a 
typical family policy valued at $13,000. So the family would pay, out 
of their pocket, $8,360 in annual premiums for their health care 
coverage, and the Federal

[[Page 3153]]

Government would provide a tax credit--not a subsidy, not a subsidy, a 
tax credit--valued at $4,640 to cover the rest. These are not 
subsidies, but tax credits to working people. They work exactly like 
the child tax credit or the tax credit to make college more affordable.
  How many of all of our constituents use those tax credits? Do they 
believe it is welfare, a form of welfare? I don't think so. They 
understand the difference between a subsidy and a tax credit. These are 
not subsidies for the middle class. They are tax credits for the middle 
class. These are tax relief measures for the middle class.
  The Affordable Care Act also ensures that the Federal funding going 
towards a family's health premium is paid directly to the insurance 
carrier, to the insurance company, not to the family. In short, the 
family receiving this tax credit will never, ever personally touch that 
money, not a single dime do they feel. It never transfers through them.

                              {time}  1050

  However, under the Republican bill, H.R. 4, if that very same family 
that earns $88,000, the breadwinner of the family is called into the 
boss's office and the boss says: You know what, you're on your track to 
management. You're doing such a great job, we're going to give you a 
$250 bonus. Take the family out to dinner. It's the holiday season.
  And you're overjoyed. You go back to your family and say, I am 
management material. I got a $250 bonus. I'm taking everybody out to 
dinner tonight.
  Well, here's the rub: you would go from the 398 percentile of the 
Federal poverty level to the 401 percentile of the poverty level. When 
that happens, you would then owe the Federal Government for that $250. 
In April of the next year the Federal Government would say: Not so 
fast, you owe us $4,640 to make up for your having accessed those tax 
credits.
  That's right, they would have to pay back every single dime that went 
directly to that health insurer, to that health insurance company when 
a dime never crossed their fingers. Not a single dime crossed their 
fingers.
  Say it ain't so, Joe--that's what families back home in my district 
are saying. But I can't; it's true. Republicans are raising taxes.
  The 1099 provisions should be repealed. I agree with that, but not on 
the backs of middle class workers and middle class Americans.
  Mr. CAMP. I yield myself such time as I may consume.
  I would just like to say that the example the gentleman from New York 
cited, that if the family or individual honestly reported their income 
without this change that we are proposing today, they would still have 
to repay the entire amount of the subsidy to the government.
  I submit for the Record a letter from Americans for Tax Reform that 
says this legislation is not a tax increase and is not a violation of 
the taxpayer protection pledge.

                                     Americans for Tax Reform,

                                Washington, DC, February 24, 2011.
     Hon. Dave Camp,
     House of Representatives, Committee on Ways and Means, 
         Washington, DC.
       Dear Chairman Camp: I write today to reiterate the support 
     of Americans for Tax Reform for H.R. 705, the ``Comprehensive 
     1099 Taxpayer Protection and Repayment of Exchange Subsidy 
     Overpayments Act of 2011.'' I also wish to clarify that H.R. 
     705 is a net tax cut, and is therefore not a violation of the 
     Taxpayer Protection Pledge.
       Two bills in the last Congress (one of which was Obamacare) 
     greatly increased ``1099-MISC'' information reporting for 
     small employers, and introduced this reporting for the first 
     time to families renting out real property. These 
     requirements are unnecessary, onerous, and would lead to 
     major compliance issues--as the IRS itself admits. H.R. 705 
     repeals these two provisions, which is a victory for 
     taxpayers.
       The official score of H.R. 705 from the Joint Committee on 
     Taxation (JCX-14-11) shows that this bill is a net tax cut. 
     By repealing the 1099-MISC provisions, taxes are cut by a 
     gross amount of $24.7 billion from 2011-2021. By requiring 
     erroneously-obtained Obamacare exchange credit advances to be 
     paid back by more recipients, JCT scores a dual effect from 
     the bill. Gross taxes would increase by $5 billion, and 
     spending (``outlay effects,'' as shown in footnote 2) would 
     be reduced by $19.9 billion.
       Thus, the gross tax cut effects of repealing the 1099-MISC 
     reporting requirements are ``paid for'' by a small gross tax 
     increase and a large spending cut. Overall, the bill is a net 
     tax cut of $19.7 billion from 2011-2021.
       Because no bill which is a net tax cut can possibly be in 
     violation of the Taxpayer Protection Pledge, the latter 
     simply does not apply in this matter. Americans for Tax 
     Reform has always followed JCT scoring methodology in this 
     area, including when JCT disaggregates between spending and 
     revenue effects of tax legislation. Spending cuts should 
     never be confused with tax increases, and JCT does a good job 
     pointing out when spending policy is present in tax bills. 
     Those trying to call this bill a net tax hike are simply 
     seeking to mislead the public, or cannot accurately read a 
     JCT score.
       I encourage all Members of Congress to support this tax 
     cut/spending cut bill when it is considered by the full 
     House.
           Sincerely,
                                               Grover G. Norquist.

  I yield 2 minutes to the gentleman from California (Mr. Herger), a 
member of the Ways and Means Committee.
  Mr. HERGER. Mr. Speaker, I rise in strong support of H.R. 4.
  Coming from a small business background myself, I know personally the 
paperwork burden of misguided government regulations imposed on our 
Nation's entrepreneurs and job creators. If the expanded 1099 reporting 
requirement in the Democrats' health care law takes effect, it will be 
one of the most far-reaching and burdensome unfunded mandates ever 
created. Small businesses will be required to fill out hundreds, or 
even thousands, of these forms every year. Yet the revenue supposedly 
raised by this reporting amounts to less than 1 percent of the 
estimated annual tax gap.
  This 1099 rule is devastating to small businesses, and it must be 
repealed now. H.R. 4 addresses the budgetary costs of repealing the 
1099 requirement by cutting wasteful government spending. The 
Democrats' health law provides subsidies for low-income people to buy 
health insurance; but if their income goes up and they don't need help 
any more, they still get to keep a large portion of the subsidy. 
Getting rid of excess subsidies is not a tax increase. It's simply 
being responsible with the taxpayers' money.
  Mr. Speaker, the American people have told us they want two things: 
more jobs and less spending. The bill before us advances both of these 
goals, and it deserves the support of every Member of this House.
  Mr. LEVIN. I yield myself such time as I may consume.
  There has been a reference here to taxpayers who did not honestly 
report their income. I must say that's an egregious misstatement. The 
way this works, or will work, is people will report their income 
honestly, and they do so based on their taxable income of a particular 
year.
  The problem with this bill is if the income often unexpectedly goes 
up in a subsequent year, how much will the taxpayer be required to pay 
to the IRS. That's what the issue is. And as Mr. Crowley said, there 
are other programs where people report their income. They report it 
honestly, and then there is a change and the question is whether they 
should have to later pay some income tax to the IRS and, if so, how 
much.
  What this bill does in its present form is to recreate a ``cliff'' 
which we smoothed out in previous legislation, and the cliff is 400 
percent of poverty. And if unexpectedly you go over that amount in a 
subsequent year, essentially what this provision would say is that the 
middle-income taxpayer would have to pay far, far more in taxes in that 
subsequent year. And the burden would essentially be on middle-income 
taxpayers. That's undeniable. It would be on income from people who are 
honest, who are middle-income taxpayers.
  So I hope no one will use the term ``ineligible'' or use the term 
``dishonest.'' That's selling short the people of this country, the 
middle-income taxpayers.
  And, indeed, the effort of 1099 was to make sure that smaller 
businesses and others reported accurately their income. That was its 
purpose. Now, it is clear that the way it was devised created all kinds 
of problems in terms of management of the small business, and so we 
moved to repeal it. But it is ironic that if essentially 1099 is now 
used by repealing it, when the effort was to

[[Page 3154]]

have people honestly report their income, it would essentially penalize 
people, middle-income taxpayers, who honestly reported their income and 
became eligible for a tax credit.
  Let me just in that respect read from Families USA: ``Unfortunately, 
H.R. 4 proposes paying for the repeal of the 1099 reporting requirement 
with a provision that would disproportionately harm middle class 
Americans. The Affordable Care Act protects individuals and families 
who run the risk of having income that may bump them up over the 
eligibility limits for premium credits by capping the tax penalty they 
will owe if the monthly premium credit received during the year exceeds 
the amount of credit due based on unexpected changes in income or 
family status. This legislation would eliminate the safe harbor for 
middle-income families and would increase the cap for lower-income 
families by $500.''
  And it closes, and again I'm quoting: ``Although we recognize that 
Congress needs to repeal the 1099 reporting requirement so that it is 
no longer a distraction from the way the Affordable Care Act benefits 
millions of small businesses, funds intended to help America's middle 
class families should not be used as a piggy bank to mend this 
legislative problem. We urge you to find an alternative and more 
responsible offset for this legislation that does not increase taxes on 
America's hardworking middle class families.''
  Undeniably, that is what this legislation would do. It is middle 
class families who honestly reported their income, period.

                              {time}  1100

  There is a fraud provision in the act, which is a very stringent one, 
that covers the case of anybody who is dishonest; but what you're doing 
is penalizing middle-income families who were honest, honest, honest.
  I yield such time as he may consume to the gentleman from New York 
(Mr. Crowley).
  Mr. CROWLEY. Thank you, Mr. Levin.
  I am a bit disturbed as well about the description of the individuals 
we're talking about here, as though everyone is trying to scam the 
system.
  I would just point out, in the bill H.R. 4994, which had bipartisan 
support last year--with every Republican but one--we passed it to 
eliminate the cliff and to eliminate the possibility of a massive 
increase in taxes on the middle class. So we have already addressed 
this. What your bill today will do is put that back in place.
  I would just ask my colleague Mr. Camp:
  What is it about the example I gave that's wrong? What is it about 
the example of a family of four, earning $88,000 a year? Based on their 
prior income taxes, they're eligible for the tax credits in the next 
year, assuming as they do, because they live a pretty dull life, a 
pretty hard life, trying to maintain their home, get their kids a 
quality education. Probably, at this point, maybe one of their kids is 
in college already; and by the way, they're probably accessing the 
Child Tax Credit, so they're used to taking tax credits.
  Now this is one other additional tax credit that they can avail 
themselves of--to do what? Not to get the $4,460 and take it and go out 
and buy a car, not to get the $4,460 to go on vacation or to scam 
somehow--but to buy what? Health care insurance for their families, 
health care insurance, which is something we all would want to provide 
for our families.
  What is it about this example? When they get the $250 bonus and they 
get pushed into the 400 percentile of poverty, that they now have to 
pay back their $4,460, what is it about my statement that's wrong? I 
haven't heard yet--because it's not wrong, because that family would be 
exposed to a massive tax increase, one that they cannot afford.
  So don't describe these people as dishonest. Don't describe the 
middle class worker as trying to scam the system. Not everyone tries to 
do that. By the way, you might find that in the lowest poverty level, 
and I would dare say the top 1 percent try to scam the system, I would 
probably think, all the time. So let's not disparage anymore the middle 
class that we already have by presenting this bill this morning.
  Mr. CAMP. I yield 2\1/2\ minutes to a distinguished member from the 
Ways and Means Committee, the gentleman from Kentucky (Mr. Davis).
  Mr. DAVIS of Kentucky. Mr. Speaker, I would just like to point out 
the louder one yells and the more one says it, as I told my children 
when they were little, doesn't make it true or correct.
  I think that we need to get down to the facts in this matter. Saying 
that paying back an overpayment is a tax increase is dissembling at 
best. It is the return of money that was not entitled by a particular 
individual.
  Democrats were for this before they were against it. To say it's a 
tax increase is simply wrong. Democrats created this mess. Democrats 
made the IRS, of all organizations, the arbiter of health care. I mean 
I think we need to get down to the truth here and not make the mistake 
of--since we're incurring issues of values and honor and faith here, 
Isaiah the prophet made the comment that beware of those who call good 
``evil'' and evil ``good'' or sweet ``sour'' or sour ``sweet.'' There 
is a consequence that comes with that, and the American people are 
entitled to the truth.
  Democrats increase taxes. Democrats increase costs. Democrats 
increase complexity of government. My friends on the other side of the 
aisle, frankly, misrepresented the facts of this bill at best or are 
completely ignorant of the process they set in motion unilaterally. 
Indeed, to call this a tax increase reminds me of the health care 
debate last year when we were told we just had to read the bill to find 
out what was in it.
  I don't think you read the bill under any circumstances.
  Mr. Speaker, I rise today in support of this Comprehensive 1099 
Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act 
of 2011. I want to read some correspondence from the middle class 
families in my district who think this is the right thing to do, who 
believe that people aren't entitled to something that they earned under 
law and that people who get paid something don't believe it should be 
paid back.
  My citizens and my constituents:
  Greg from Independence, Kentucky, wrote: ``We don't need this new 
1099 requirement for small business. Get out of the way so we can 
prosper.'' That means creating taxpayers, not raising taxes.
  Eric from Cynthiana told me: ``Small businesses are already being 
crushed by overreaching government mandates and undue burdens. I'm 
personally sick of this foolishness.''
  Joann from DeMossville wrote in to tell me how she would personally 
be affected. She stated: ``My husband is a sole proprietorship, and I 
currently complete and submit 1099s for his subcontractors. So, if we 
spend $600 at Home Depot, I now need to send them a 1099? Sounds like a 
good use of my time and IRS resources.''
  Tom in Burlington may have summed up the requirement the best when he 
simply called it ``a nightmare for business.''
  Mr. Speaker, we need small businesses to focus on what they do best--
to innovate, grow and hire. This reporting requirement needs to be 
removed now. It's burdensome, and it's going to drive up costs and cost 
us jobs. If allowed to go into effect, it will slow job growth and will 
lead to higher prices for consumers. Let our job creators create jobs 
and focus on that.
  I urge support for H.R. 4.
  Mr. LEVIN. I yield such time as he may consume to the gentleman from 
New York (Mr. Crowley).
  Mr. CROWLEY. I thank the gentleman for yielding to me.
  I wonder if my friend from Kentucky heard from his middle class 
taxpayers. I know he's heard from the small business owners. We've all 
heard from them. But has he heard from the middle class? When they get 
imposed this tax upon them, have they said, ``Don't put this tax on 
me''? No, because, quite frankly, they don't know what's happening. 
They wouldn't dream that you would do this to them. They wouldn't

[[Page 3155]]

dream that somehow you might possibly inflict and impose upon them a 
$4,460 tax.
  If your constituents earning $88,000 go over by one penny--one cent--
over the 400 percentile of poverty--one penny--they have to pay back 
$4,460, which they never ever physically touched, which they never 
received. It went to the insurance company. The insurance companies get 
taken care of. They get their money. They're fine. By one penny over 
the Federal poverty level, your middle class families have to pay back 
$4,460. Does that sound fair to you?
  Now, maybe for one penny over, they have to give a little something 
back. Maybe for every dollar over, they'll have to give a little 
something back. But to pay back $4,460 so they can provide their 
families with health care? I'd say to the boss, Do me a favor, don't 
give me the penny bonus. Don't give me the $250 bonus. Don't reward 
hard work. Don't reward me for doing good work because if you give me 
the bonus I'm going to have to pay $4,460.
  Does that make any sense to you?
  What about making pay work? What about asking Americans to do their 
jobs, to do them well; and if you do it well, you'll get a bonus, and 
you'll get ahead, and your families will be taken care of?
  Under this bill, this is a nightmare for the middle class families--a 
nightmare--because they're not going to be able to pay that. It totally 
subverts the intention of what we tried to do in the first place, and 
that is to provide health care to the middle class.
  Mr. CAMP. I yield myself such time as I may consume.
  I appreciate that language: to get back to what they tried to do in 
the first place. Let's look at what they did in the first place.
  Their bill, their original bill, said anyone who earned more than 400 
percent of poverty--that's $93,800 for a family of four--would be 
required to repay the entire amount of the exchange subsidy. That is 
exactly what this bill does. This bill does what the original health 
care legislation did. Then they raised it, and said, well, if you made 
up to $117,000 for a family of four, you had to repay the entire 
subsidy. They had a cliff in their bill, and there is a cliff now. What 
we are saying is we need to see that the American taxpayer is 
protected.
  With that, I yield 2 minutes to a distinguished member of the Ways 
and Means Committee, the gentleman from Texas (Mr. Brady).

                              {time}  1110

  Mr. BRADY of Texas. Mr. Speaker, I want to follow on with what 
Chairman Camp made such an important point of here. This new national 
takeover of health care is just a mess in so many ways. Two of them we 
highlight today. One, our Democratic friends heaped a huge new pay-for 
burden on our small businesses that none of them frankly can comply 
with. And then they create a loophole where some people in America can 
get taxpayer subsidies even if they don't qualify for them.
  So let's be clear. Today we are fixing two huge Democratic messes 
that they made, and we're going to fix them because our small 
businesses can't take more of this burden. Many of them are barely 
hanging on as it is today. Secondly, with these huge deficits, we can't 
afford more fraud and abuse in our government system. So we apply a 
pretty simple principle: if you get Federal money you don't qualify 
for, you're going to have to repay it. Not everyone. If you're moderate 
income or below, we understand you don't have that money. But if you're 
making higher than the national average, if you're making $70,000, 
$80,000, $90,000 a year and you got a subsidy from some other family 
that you don't deserve, you're going to have to give it back.
  That's what this bill does. It takes a huge burden off our small 
businesses they never should have had but our Democrat friends put on 
them, and then we're going to ask people to repay money they should 
never have got that our Democrat friends allowed them to get. This 
actually is a bipartisan bill. At the end of the day, watch the vote. 
You'll see so many people in this Congress saying it's time to fix 
this. We're going to fix this mess today.
  Mr. LEVIN. Mr. Speaker, before I yield to the gentleman from 
Wisconsin, I just want to say three quick things.
  It is such a misstatement for someone to come here and say ``even if 
they did not qualify.'' That is not correct. They qualified. So don't 
come here and say they didn't qualify. Essentially what you're saying 
is middle income taxpayers came and defrauded when the truth is they 
told the truth. And indeed there's a provision relating to fraud if 
someone were guilty of that. It allows for full repayment in cases of 
fraud, and there's a provision that imposes a civil penalty up to 
$25,000.
  The last thing before I yield, I want to make clear, last December, 
we fixed, Mr. Camp, the cliff. You voted for it. It was 409-2. I don't 
think you were one of the ``2.'' This resurrects the cliff, purely and 
simply, and catches hundreds of thousands of taxpayers in the future, 
middle income taxpayers.
  I now yield 5 minutes to the distinguished gentleman from Wisconsin 
(Mr. Kind), an active member of our committee.
  Mr. KIND. I thank the gentleman for yielding.
  Mr. Speaker, I'm sure my good friend and colleague, the previous 
speaker from Texas, also realizes that this money that they will owe on 
this hidden tax is something they never see to begin with. This is a 
tax credit that goes directly to the private health insurance 
companies. And this bill would be better titled the Republican Tax Trap 
of 2014, 2015, 2016, and on and on and on, because that's exactly 
what's going to happen. There's this hidden tax trap that's going to 
affect hundreds of thousands of working class, middle class families 
through no fault of their own.
  I think my colleague and friend from New York explained very 
succinctly what would happen here with the cliff. If you're at 400 
percent poverty level, a family of four at roughly $88,000 a year, and 
you receive a little bit of extra income, you receive a little bit of a 
bonus that might put you just over the edge, you're going to be hit 
with a $4,600 tax liability at the end of the year. Now they're not 
going to be in a position to deal with that. So either they're going to 
have to find a way to come up with the money to pay the Republican tax 
that they didn't expect, or it's going to discourage work and they're 
not going to try to earn as much income because they don't want to go 
over that 400 percent level, or they're not going to participate in a 
health insurance exchange to begin with. We've got a score on that as 
well: that over 266,000 families will choose not to participate in a 
health insurance exchange for fear of this hidden Republican tax trap 
that we have before us today.
  And what's ironic about this is this insurance exchange that's part 
of the Affordable Care Act is a bill that I and others have worked on 
for years in a bipartisan fashion, called the SHOP Act. Republicans 
were in favor of creating these health insurance exchanges, coupled 
with tax credits, so that small businesses, family farmers, 
individuals, finally had a place where they could go and shop for 
affordable health care coverage with competing private health plans 
finally competing for their business for a change, so that they had the 
same type of leverage that large corporations do. This has been proven 
in models and pilot projects throughout the Nation that have shown how 
effective these health insurance exchanges work.
  What they're doing now with this legislation, with the offset that 
they're proposing, hitting the middle class, is doing things to 
undermine, once again, the health insurance exchanges and the ability 
for small businesses and individuals to go out and obtain affordable 
coverage. That's unfortunate, but it's consistent with the zeal on the 
other side of doing everything they can to undermine the Affordable 
Care Act, regardless of who it hurts, regardless of the additional tax 
burden.
  As my friend from Michigan indicated, we fixed this problem last 
December in a bipartisan fashion, so instead of creating a cliff, which 
was a mistake in the original bill, there would be a gradual phaseout 
of these

[[Page 3156]]

tax credits; so it wouldn't be a hidden tax trap as my Republican 
colleagues are calling for today.
  But at some point we're going to have to come to grips that a lot of 
what's in the Affordable Care Act is necessary and long overdue, not 
least of which, and I think this is going to be the key to health care 
reform and its final verdict, is the ability for us to change the way 
we pay for health care in this country, changing the fee for service 
that exists in Medicare today to a fee for value or a quality-based 
reimbursement system. We can start by doing that with Medicare, and the 
tools are in place under health care reform to do that. This will 
extend then to the private health insurance industry.
  This, too, is a bipartisan issue. Newt Gingrich has been talking 
about it; Dr. Bill Frist; Tommy Thompson, my former Governor and former 
Secretary of HHS, has been talking about changing the reimbursement 
system in health care so we reward value and quality and outcome of 
care as opposed to the volume-based payments which is literally 
bankrupting our Nation today. Health care costs are the largest and 
fastest growing expense that we have at all levels, Federal, State and 
local level, and for businesses and families alike. It's one of the 
reasons why I've got folks in Wisconsin at each other's throats right 
now talking about public employee benefits, and the biggest cost driver 
in State budgets today are rising health care costs.
  So why not embrace the reforms that we have in health care reform 
that will lead us to a value-based reimbursement system, which many 
people on a bipartisan basis have been talking about for years. We were 
finally able to get those tools in place under the Affordable Care Act. 
We just can't do it overnight. You don't change the way you pay for 
one-fifth of the entire U.S. economy overnight.
  We've got accountable care organizations, medical homes, bundling 
programs to incent value-based payments. But we also have the National 
Academy of Sciences, the Institute of Medicine, doing a 2-year study 
right now to change the fee for service under Medicare to a fee for 
value system and they will present an actionable plan to the 
administration to implement it, which gives us, I think, the best hope 
of changing the outdated and perverse incentive system that we have in 
the delivery of health care today. It's leading to overutilization in 
health care. And studies have shown that close to one out of every 
three health care dollars, or about $800 billion a year, are going to 
tests and procedures that don't work.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield the gentleman 2 additional minutes.
  Mr. KIND. One out of every three health care dollars, or $800 billion 
we're spending a year that we're not getting a good bang for the buck. 
It's going to tests and procedures that don't work. And because of the 
overutilization and the overtreatment that some patients are receiving, 
they're being left worse off, rather than better off.
  That's going to be the game-changer when it comes to true fiscal 
responsibility in this place. It's something that everyone's been 
ducking. For the last couple of weeks we've been talking about this 
continuing resolution that only deals with 12 percent of the Federal 
pie. Unfortunately it goes after the most vulnerable people in our 
society, especially our kids' education. Yet we all know where the big 
money lies. It's in the health care programs, Medicare and Medicaid. 
It's in defense spending. If we don't get serious in turning the cost 
curve around when it comes to health care, then we're just fooling 
ourselves with everything else that we're doing with the budget.
  We've addressed that in the Affordable Care Act with programs that 
are set up now and payment reform that is moving forward to change how 
we pay for health care so we can improve the quality of care for all 
Americans but at a much better bang for the buck for the American 
taxpayer. That's what we should be coming together on, rather than 
discouraging people from participating in an exchange which will create 
true competition with these private insurance companies, which again is 
long overdue, and instead of offering this legislation today that sets 
up this Republican tax trap for middle class working families who will 
be surprised at the end of the year because they put in a little bit 
more time and they earned a little bit more income or they got that 
last-minute bonus from their employees, and then suddenly they realize, 
oh, my God, we're going to owe $4,600 because of what they're doing 
here today.

                              {time}  1120

  It's outrageous. It's unfair. There are better offsets.
  And here's an idea. The retired CEO of Chevron just this past week 
said: Hey, when oil is above 70 bucks a barrel, let's stop the 
subsidies, let's stop the tax breaks.
  This is a retired CEO of a major oil-producing company that's saying 
that this is nonsense that we're still wasting so much money, around 50 
billion dollars per year by subsidizing Big Oil when oil is above 70 
bucks a barrel. Today, it's over $100 a barrel. That would be a more 
appropriate offset.
  I'm going to hand off to my friend from Oregon to pick it up at that 
point.
  Mr. CAMP. Mr. Speaker, I yield 4 minutes to the distinguished 
chairman of the House Administration Committee, the gentleman from 
California (Mr. Daniel E. Lungren).
  Mr. DANIEL E. LUNGREN of California. I thank the gentleman for 
yielding the time.
  My name happens to appear on this bill as the original author of this 
bill, H.R. 4. I remember when I introduced this last April, Members on 
that side of the aisle were told by their leadership don't dare go on 
this bill to repeal this necessary provision of the Affordable Care 
Act.
  By the way, if it is truly an affordable care act, why has Secretary 
Sebelius granted over 700 waivers to companies and unions? Because it's 
not affordable. Why has virtually every member of my constituency who 
has health insurance had an increase in their premiums as a direct 
result of the ``Affordable Care Act''? Just a passing question because 
I'm asked that all the time by my constituents.
  Why did I introduce this? Because provision 9006 of the bill has 
nothing to do with affordable care and has everything to do with the 
capacity of our friends on the other side to find ingenious ways of 
impacting business because I guess business is considered bad. Well, 
I've got an answer for you today to the question of who creates jobs. 
This is who creates jobs: small business. And this particular section 
of your so-called Affordable Care Act kills business, kills small 
business. What does it do? It is based on the assumption that everybody 
cheats. Why? Because the 1099 form is usually utilized for the purpose 
of making sure you carry out your obligation to pay payroll tax.
  But what did we do in the so-called Affordable Care Act? We increased 
the reach of 1099s so that when you have no obligation to pay anything, 
you have to report on the person on the other side of the business 
transaction; so that they, supposedly, are cheating, and therefore we 
have what's known as the universal snitch act.
  The idea that it's going to gain $19 billion, in my judgment, is 
created out of whole cloth. You have to assume that almost everybody 
cheats to get your $19 billion.
  And here's the game here in Washington, D.C.: We create a new 
obligation on business that's never existed before. We then secretly 
put it in a bill--virtually no one on this floor knew it was in the 
bill--and then we score it for gaining $19 billion to the Treasury. And 
if I dare come to this floor to repeal it, I'm obligated to come up 
with $19 billion in new taxes or some sort of a spending cut?
  The American people ought to understand the game that's played. In 
secret, we pass something like this, which has an unbelievably 
pernicious effect on business. Now, how does it have such an effect? It 
requires every single person involved in business or trade to go into 
accounting to make sure that every time they reach that threshold of

[[Page 3157]]

$600 or more with anybody they purchase something from they have to 
file a 1099.
  Here's what someone in my district just emailed me, a small business 
person, a woman:
  ``I have 15 employees. As owner, I am the HR department, the 
bookkeeping department, the administration department, and still serve 
my customers while surviving this economic climate. It will be a 
tremendous burden, both in time and dollars, to send out 1099s to all 
my vendors--appliance manufacturers, parts distributors, other 
suppliers, utility companies.''
  It is a job-killer provision. We brought this H.R. 4 to the floor to 
get rid of a job-killer provision.
  The other reason why it is a double-edged sword on small business is, 
if you want to minimize the number of 1099s that you file, you will not 
go to your local hardware store. You will not go to your local 
restaurant. You will go to the big box store. You will go to the chain 
restaurant. And we are killing small business on this floor.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. CAMP. I yield the gentleman an additional 30 seconds.
  Mr. DANIEL E. LUNGREN of California. So I understand the sincerity of 
the other side of the aisle, of those who are concerned about the 
middle class. Who do you think small business is? This is the middle 
class in my district and virtually every district across the country. 
These are the people who create jobs. You will put a dagger in their 
side. And now you come up and argue against passing this legislation 
because you are concerned about the middle class.
  You are killing the middle class with the provision in the health 
care reform bill, so-called. What we are trying to do is to get rid of 
that. We are trying help the middle class. We are trying to help the 
job creators. We are trying to help the people in our districts who 
don't have jobs.
  Don't distract the debate on this job-killer piece of legislation. 
Give us some relief, which is being called for all around the country.
  Mr. LEVIN. Mr. Speaker, before I yield to Mr. Blumenauer, I yield 30 
seconds to the gentleman from New York (Mr. Crowley).
  Mr. CROWLEY. I appreciate the comments of my friend from California, 
and I don't question his motivation. But I would suggest that if the 
assumption is that we believe everyone cheats, I think that's wrong.
  What I hear from the other side--not from the gentleman from 
California, but generally from the other side--is that the belief is 
the middle class cheats; the middle class cheats, and that's why we 
have to impose this upon them. And I would use an example of a middle 
class business man or woman. That business man or woman who files an 
individual fax tax form as a small business person no longer will have 
to file the 1099 forms, but if they make $88,000 a year and they are 
397 percentile of Federal poverty and they have an unexpected increase 
in income, they will be subject to the $4,460 middle class tax hike.
  Mr. LEVIN. Mr. Speaker, I yield 5 minutes to the gentleman from 
Oregon (Mr. Blumenauer), a member of the Ways and Means Committee.
  Mr. BLUMENAUER. Thank you, Mr. Levin, I appreciate that.
  It's a little interesting when we hear our friends come to the floor 
with the same talking points. My good friend from California talks 
about the government takeover of health care--which of course 
PolitiFact called the 2010 political lie of the year.
  Allowing 33 million additional Americans to have access to----


                             Point of Order

  Mr. DANIEL E. LUNGREN of California. Point of order, Mr. Speaker.
  The SPEAKER pro tempore. State your point.
  Mr. DANIEL E. LUNGREN of California. The gentleman made a personal 
reference to me, stating that I made a statement on the floor, and then 
called that the biggest lie of the year. Is that, in fact, an 
appropriate comment to be made on the floor during debate?
  The SPEAKER pro tempore. The gentleman from California has not stated 
a point of order.
  Would the gentleman proceed to state the point.
  Mr. DANIEL E. LUNGREN of California. I would make a point of order 
that the gentleman has made a personal reference to me and then 
followed that up by saying that what I said was a lie.
  The SPEAKER pro tempore. Is the gentleman demanding that words be 
taken down?
  Mr. DANIEL E. LUNGREN of California. Not at this time, Mr. Speaker. 
But I would ask that the Speaker admonish Members not to question the 
motivation of other Members in reference to any debate that is taking 
place.
  The SPEAKER pro tempore. The gentleman from Oregon may proceed.
  Mr. BLUMENAUER. . . .
  Mr. DANIEL E. LUNGREN of California. Mr. Speaker, I ask that the 
gentleman's words be taken down.
  The SPEAKER pro tempore. The gentleman will suspend. The gentleman 
from Oregon will take a seat.
  The Clerk will report the words.
  Mr. BLUMENAUER. I ask unanimous consent, Mr. Speaker, to withdraw the 
previous statement.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Oregon?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from Oregon may proceed.
  Mr. BLUMENAUER. I appreciate the opportunity, because I want to be 
very clear about what I intended, what I thought I said and I think a 
review of the tape would reveal. I am not calling anybody a liar.
  What I intended to say, and I will ask unanimous consent to put in 
the Record, is that as we have repeated talking points about a 
government takeover of health care, this has been judged by an 
independent journalistic undertaking as the political lie of the year.
  Mr. DANIEL E. LUNGREN of California. Will the gentleman yield?
  Mr. BLUMENAUER. I yield to the gentleman from California.
  Mr. DANIEL E. LUNGREN of California. All I just want to make clear in 
the Record, I never made a reference to the government takeover of 
health care in my speech, and the gentleman was errant in making a 
personal reference to what I had just said.
  Mr. BLUMENAUER. I apologize if the person who said ``government 
takeover of health care'' was not you. It is repeated so often by my 
Republican friends, including the Speaker of the House, time and time 
again, that sometimes I get confused because it is a litany that is 
used. It is in fact, and I would ask unanimous consent, Mr. Speaker, to 
put in the Record the PolitiFact article.
  The SPEAKER pro tempore. Without objection, it is so ordered.
  Mr. BLUMENAUER. Because those words are still echoing in the Chamber. 
It has been said by somebody on the other side of the aisle earlier:
  ``PolitiFact editors and reporters have chosen `government takeover 
of health care' as the 2010 Lie of the Year. They chose it as the 
year's most significant falsehood by an overwhelming margin. The label 
`government takeover' has no basis in reality, but instead reflects a 
political dynamic where conservatives label any increase in government 
authority in health care as a `takeover.'''
  They point out: ``The law that Congress passed, parts of which have 
already gone into effect, rely largely on the free market. Employers 
will continue to provide health insurance to the majority of Americans 
through private insurance companies. Contrary to the claim, more people 
will get private health insurance. The government will not seize 
control of hospitals or nationalize doctors. The law does not include a 
public option. It gives tax credits to people who have difficulty 
affording insurance, so they can buy their coverage from private 
providers. It relies on a free market with regulations, not socialized 
medicine. We have concluded it is inaccurate to call the plan a 
government takeover because it relies largely on the existing health 
system of coverage provided by employers.''
  Mr. Speaker, part of what we're seeing here, though, is this drama 
that is

[[Page 3158]]

pulled out where talking points are repeated in an effort to obscure 
the facts going forward. The majority knows that the Democrats have 
attempted to adjust the 1099. We don't want it in there. We voted for 
fixes. It will be fixed between the House and the Senate.
  What's killing small business is the crushing burden of health care, 
where they are trying to provide for their employees. What is killing 
small business is that they can't compete with big business. They have 
a system that has provided a downward spiral. What's providing the 
driving force for the government deficit is increasing costs of 
providing health care, for example, through Medicare. This used to be 
an area of bipartisan cooperation.
  The Health Care Reform Act includes every significant area of 
reducing health care costs as either a pilot or a demonstration. It 
points a path towards saving hundreds of billions of dollars. Those 
used to be bipartisan.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield the gentleman 2 additional minutes.
  Mr. BLUMENAUER. Those used to be bipartisan; but instead of working 
with us to refine and accelerate the provisions, people are trying to 
put sand in the gears. And as my friends from Michigan and from New 
York have pointed out, there are going to be some--we hope they are 
unintended victims--but there are going to be innocent victims, people 
in the middle class and the near middle class who don't have the 
control of billionaire hedge funds to control their income.
  There are things that can happen that will adjust it up or down. 
There will be a significant penalty. We have worked to fix that cliff. 
We've approved it. We don't need to reinstate the cliff, the tax on 
honest mistakes. As has been pointed out, there are provisions to deal 
with fraud.
  This is part of the drip, drip, drip to try and undermine health care 
reform, not accelerate it. It's a part of misrepresentation politically 
that the American public frankly doesn't deserve. It's a lost 
opportunity for us to reduce the deficit, improve health care, and 
lower costs.

                              {time}  1150

  This is very personal to people like me. I come from an area of the 
country that provides high-quality health care at a low cost. My people 
are penalized. Health care reform is moving to try to help people like 
that as we overall improve health care around the country and protect 
the deficit.
  I am sorry for any ambiguity or misunderstanding from my comments, 
but I am frustrated when I hear the Republican side of the aisle 
continue to repeat this political lie of the year. It doesn't help the 
debate, it doesn't help us move forward, and we are going to have to 
move forward to solve the problems of this country.

                    [From PolitiFact, Dec. 16, 2010]

  PolitiFact's Lie of the Year: `A Government Takeover of Health Care'

                  (By Bill Adair, Angie Drobnic Holan)

       In the spring of 2009, a Republican strategist settled on a 
     brilliant and powerful attack line for President Barack 
     Obama's ambitious plan to overhaul America's health insurance 
     system. Frank Luntz, a consultant famous for his phraseology, 
     urged GOP leaders to call it a ``government takeover.''
       ``Takeovers are like coups,'' Luntz wrote in a 28-page 
     memo. ``They both lead to dictators and a loss of freedom.''
       The line stuck. By the time the health care bill was headed 
     toward passage in early 2010, Obama and congressional 
     Democrats had sanded down their program, dropping the 
     ``public option'' concept that was derided as too much 
     government intrusion. The law passed in March, with new 
     regulations, but no government-run plan.
       But as Republicans smelled serious opportunity in the 
     midterm elections, they didn't let facts get in the way of a 
     great punchline. And few in the press challenged their 
     frequent assertion that under Obama, the government was going 
     to take over the health care industry.
       PolitiFact editors and reporters have chosen ``government 
     takeover of health care'' as the 2010 Lie of the Year. 
     Uttered by dozens of politicians and pundits, it played an 
     important role in shaping public opinion about the health 
     care plan and was a significant factor in the Democrats' 
     shellacking in the November elections.
       Readers of PolitiFact, the St. Petersburg Times' 
     independent fact-checking website, also chose it as the 
     year's most significant falsehood by an overwhelming margin. 
     (Their second-place choice was Rep. Michele Bachmann's claim 
     that Obama was going to spend $200 million a day on a trip to 
     India, a falsity that still sprouts.)
       By selecting ``government takeover'' as Lie of the Year, 
     PolitiFact is not making a judgment on whether the health 
     care law is good policy.
       The phrase is simply not true.
       Said Jonathan Oberlander, a professor of health policy at 
     the University of North Carolina-Chapel Hill: ``The label 
     `government takeover' has no basis in reality, but instead 
     reflects a political dynamic where conservatives label any 
     increase in government authority in health care as a 
     `takeover.'''


                          An inaccurate claim

       ``Government takeover'' conjures a European approach where 
     the government owns the hospitals and the doctors are public 
     employees. But the law Congress passed, parts of which have 
     already gone into effect, relies largely on the free market:
       Employers will continue to provide health insurance to the 
     majority of Americans through private insurance companies.
       Contrary to the claim, more people will get private health 
     coverage. The law sets up ``exchanges'' where private 
     insurers will compete to provide coverage to people who don't 
     have it.
       The government will not seize control of hospitals or 
     nationalize doctors.
       The law does not include the public option. a government-
     run insurance plan that would have competed with private 
     insurers.
       The law gives tax credits to people who have difficulty 
     affording insurance, so they can buy their coverage from 
     private providers on the exchange. But here too, the approach 
     relies on a free market with regulations, not socialized 
     medicine.
       PolitiFact reporters have studied the 906-page bill and 
     interviewed independent health care experts. We have 
     concluded it is inaccurate to call the plan a government 
     takeover because it relies largely on the existing system of 
     health coverage provided by employers.
       It's true that the law does significantly increase 
     government regulation of health insurers. But it is, at its 
     heart, a system that relies on private companies and the free 
     market.
       Republicans who maintain the Democratic plan is a 
     government takeover say that characterization is justified 
     because the plan increases federal regulation and will 
     require Americans to buy health insurance.
       But while those provisions are real, the majority of 
     Americans will continue to get coverage from private 
     insurers. And it will bring new business for the insurance 
     industry: People who don't currently have coverage will get 
     it, for the most part, from private insurance companies.
       Consider some analogies about strict government regulation. 
     The Federal Aviation Administration imposes detailed rules on 
     airlines. State laws require drivers to have car insurance. 
     Regulators tell electric utilities what they can charge. Yet 
     that heavy regulation is not described as a government 
     takeover.
       This year, PolitiFact analyzed five claims of a 
     ``government takeover of health care.'' Three were rated 
     Pants on Fire, two were rated False.


                       Can't do it in four words

       Other news organizations have also said the claim is false.
       Slate said ``the proposed health care reform does not take 
     over the system in any sense.'' In a New York Times economics 
     blog, Princeton University professor Uwe Reinhardt, an expert 
     in health care economics, said, ``Yes, there would be a 
     substantial government-mandated reorganization of this 
     relatively small corner of the private health insurance 
     market (that serves people who have been buying individual 
     policies). But that hardly constitutes a government takeover 
     of American health care.''
       FactCheck.org, an independent fact-checking group run by 
     the University of Pennsylvania, has debunked it several 
     times, calling it one of the ``whoppers'' about health care 
     and saying the reform plan is neither ``government-run'' nor 
     a ``government takeover.''
       We asked incoming House Speaker John Boehner's office why 
     Republican leaders repeat the phrase when it has repeatedly 
     been shown to be incorrect. Michael Steel, Boehner's 
     spokesman, replied, ``We believe that the job-killing 
     ObamaCare law will result in a government takeover of health 
     care. That's why we have pledged to repeal it, and replace it 
     with common-sense reforms that actually lower costs.''
       Analysts say health care reform is such a complicated topic 
     that it often cannot be summarized in snappy talking points.
       ``If you're going to tell the truth about something as 
     complicated as health care and health care reform, you 
     probably need at least four sentences,'' said Maggie Mahar, 
     author of Money-Driven Medicine: The Real Reason Health Care 
     Costs So Much. ``You can't do it in four words.''
       Mahar said the GOP simplification distorted the truth about 
     the plan. ``Doctors will not be working for the government. 
     Hospitals will not be owned by the government,''

[[Page 3159]]

     she said. ``That's what a government takeover of health care 
     would mean, and that's not at all what we're doing.''


                         How the line was used

       If you followed the health care debate or the midterm 
     election--even casually--it's likely you heard ``government 
     takeover'' many times.
       PolitiFact sought to count how often the phrase was used in 
     2010 but found an accurate tally was unfeasible because it 
     had been repeated so frequently in so many places. It was 
     used hundreds of times during the debate over the bill and 
     then revived during the fall campaign. A few numbers:
       The phrase appears more than 90 times on Boehner's website, 
     GOPLeader.gov.
       It was mentioned eight times in the 48-page Republican 
     campaign platform ``A Pledge to America'' as part of their 
     plan to ``repeal and replace the government takeover of 
     health care.''
       The Republican National Committee's website mentions a 
     government takeover of health care more than 200 times.
       Conservative groups and tea party organizations joined the 
     chorus. It was used by FreedomWorks, the Heritage Foundation 
     and the Cato Institute.
       The phrase proliferated in the media even after Democrats 
     dropped the public option. In 2010 alone, ``government 
     takeover'' was mentioned 28 times in the Washington Post, 77 
     times in Politico and 79 times on CNN. A review of TV 
     transcripts showed ``government takeover'' was primarily used 
     as a catchy sound bite, not for discussions of policy 
     details.
       In most transcripts we examined, Republican leaders used 
     the phrase without being challenged by interviewers. For 
     example, during Boehner's Jan. 31 appearance on Meet the 
     Press, Boehner said it five times. But not once was he 
     challenged about it.
       In rare cases when the point was questioned, the GOP leader 
     would recite various regulations found in the bill and insist 
     that they constituted a takeover. But such followups were 
     rare.


                          An effective phrase

       Politicians and officials in the health care industry have 
     been warning about a ``government takeover'' for decades.
       The phrase became widely used in the early 1990s when 
     President Bill Clinton was trying to pass health care 
     legislation. Then, as today, Democrats tried to debunk the 
     popular Republican refrain.
       When Obama proposed his health plan in the spring of 2009, 
     Luntz, a Republican strategist famous for his research on 
     effective phrases, met with focus groups to determine which 
     messages would work best for the Republicans. He did not 
     respond to calls and e-mails from PolitiFact asking him to 
     discuss the phrase.
       The 28-page memo he wrote after those sessions, ``The 
     Language of Healthcare 2009,'' provides a rare glimpse into 
     the art of finding words and phrases that strike a responsive 
     chord with voters.
       The memo begins with ``The 10 Rules for Stopping the 
     `Washington Takeover' of Healthcare.'' Rule No. 4 says people 
     ``are deathly afraid that a government takeover will lower 
     their quality of care--so they are extremely receptive to the 
     anti-Washington approach. It's not an economic issue. It's a 
     bureaucratic issue.''
       The memo is about salesmanship, not substance. It doesn't 
     address whether the lines are accurate. It just says they are 
     effective and that Republicans should use them. Indeed, 
     facing a Democratic plan that actually relied on the free 
     market to try to bring down costs, Luntz recommended 
     sidestepping that inconvenient fact:
       ``The arguments against the Democrats'' healthcare plan 
     must center around politicians, bureaucrats and Washington . 
     . . not the free market, tax incentives or competition.''
       Democrats tried to combat the barrage of charges about a 
     government takeover. The White House and House Speaker Nancy 
     Pelosi repeatedly put out statements, but they were drowned 
     out by a disciplined GOP that used the phrase over and over.
       Democrats could never agree on their own phrases and were 
     all over the map in their responses, said Howard Dean, former 
     head of the Democratic National Committee.
       ``It was uncoordinated. Everyone had their own idea,'' Dean 
     said in an interview with PolitiFact.
       The Democrats are atrocious at messaging,'' he said. 
     ``They've gotten worse since I left, not better. It's just 
     appalling. First of all, you don't play defense when you're 
     doing messaging, you play offense. The Republicans have 
     learned this well.''
       Dean grudgingly admires the Republican wordsmith. ``Frank 
     Luntz has it right, he just works for the wrong side. You 
     give very simple catch phrases that encapsulate the 
     philosophy of the bill.''


                           A responsive chord

       By March of this year, when Obama signed the bill into law, 
     53 percent of respondents in a Bloomberg Poll said they 
     agreed that ``the current proposal to overhaul health care 
     amounts to a government takeover.''
       Exit polls showed the economy was the top issue for voters 
     in the November election, but analysts said the drumbeat 
     about the ``government takeover'' during the campaign helped 
     cement the advantage for the Republicans.
       Rep. Earl Blumenauer, an Oregon Democrat whose provision 
     for Medicare end-of-life care was distorted into the charge 
     of ``death panels'' (last year's Lie of the Year), said the 
     Republicans'' success with the phrase was a matter of 
     repetition.
       ``There was a uniformity of Republican messaging that was 
     disconnected from facts,'' Blumenauer said. ``The sheer 
     discipline . . . was breathtaking.''

  Mr. CAMP. Mr. Speaker, I yield 2 minutes to a distinguished member of 
the Ways and Means Committee, the gentleman from Louisiana, Dr. 
Boustany.
  Mr. BOUSTANY. Mr. Speaker, the time to act on this provision is now. 
Why? It's very, very simple. It's about jobs. It's about removing an 
onerous provision, a burdensome provision on small businesses that 
create jobs. If we wonder why we have a high unemployment rate, it is 
because of provisions like this.
  This 1099 provision was bad legislation from day one. The American 
people have made it clear they want this law repealed.
  The President thinks it's bad, Democrats think it's bad, Republicans 
think it's bad, even the Senate thinks it's bad. It has taken long 
enough to move on this. Let's do it. Let's get it done. Further delay 
is unacceptable.
  Look, if we don't repeal this now, businesses are going to assume 
more expenses. If we repeal it later, we continue to delay this.
  They will incur expenses that, once it is repealed, they wouldn't 
have had to incur from the beginning. I am already hearing from many, 
many Louisiana businesses right now that want to grow, want to hire; 
and they are worried about this. They are already spending money to 
prepare for this.
  That's why we need to take care of it now. We want to create jobs, 
repeal this provision now and let's move forward. The American people 
want to see action on this from this Congress, and they want to see it 
now. It's important now to do it.
  Americans are growing impatient. Small business owners are growing 
impatient. I ask that we repeal this provision today. Repeal it now.
  Mr. LEVIN. I yield myself 15 seconds.
  The gentleman who just spoke voted ``no'' on repeal last July, as did 
the gentleman from California who spoke before him. You both had a 
chance to vote ``no,'' and you failed to do so. You didn't like a pay-
for that closed a tax loophole.
  I yield 5 minutes to the gentleman from Massachusetts (Mr. Neal), a 
distinguished member of the Ways and Means Committee.
  Mr. NEAL. I thank Mr. Levin for yielding the time.
  Mr. Speaker, this provision came over from the Senate. As Mr. Levin 
has correctly noted, Members on this side of the aisle have already 
cast a vote to repeal this measure. The difficulty that's in front of 
us today is the manner in which this has been presented to all of us.
  Now, we are going to hear a lot of conflicting opinions today about 
the new taxes in this bill. Like everybody else here in this Chamber, I 
am opposed to raising taxes on the middle class. Hardly is that a leap 
of faith into unchartered waters. We all share that common belief.
  But the problem with the provision that's offered today is the 
disguised nature of raising taxes on the middle class. Let's get to the 
heart of this bill. It repeals a new reporting requirement on small 
businesses.
  This provision expanded a type of reporting that already goes on 
where businesses report to the Internal Revenue Service on large 
payments sent to contractors. This type of third-party reporting is 
meant to ensure those contractors report honestly to the IRS on the 
income they earn.
  A reminder, it is estimated that there is up to $300 billion a year 
of unreported income in the United States. And before we get to some of 
the cuts that have been proposed in this institution, we ought to be 
focusing our attention on how we might collect that unreported and 
underreported income that is such an important part of the underground 
economy in the United States.

[[Page 3160]]

  You would think that that opportunity would avail itself based upon 
the mindless process that took place here a couple of weeks ago where 
we began with a series of 2-minute votes over 2 days to cut very 
important initiatives that the American people have come to rely on. 
And I would suggest to my friends on the other side of the aisle that 
they take note of that Wall Street Journal poll this morning as to what 
these cuts mean and how they are going down with the American people.
  In our committee markup, there was a great deal of discussion about 
the burden on small businesses that this new reporting requirement 
imposes, and I think that for the most part we are all in agreement 
that the burden here may well outweigh the benefit.
  But let's not ignore what we have found out about tax evasion at our 
markup. I asked Tom Barthold from the Joint Committee on Taxation about 
his estimate that the reporting requirement would raise $22 billion in 
revenue. Now, Tom Barthold is not a Democrat; he is not a Republican. 
He is an economist who likes to give unjaded information to those of us 
who then implement policy.
  I asked him how much of this was tax evasion, contractors 
underreporting income and how much was the penalties on those innocent 
third parties who got tripped up on the rules. He told us that almost 
all of it was due to tax avoidance, tax evasion.
  So without any hearings or debate about how to best capture that $22 
billion, we eliminated this reporting requirement and would raise taxes 
on middle-income families.
  I want to urge my friends on the other side, before we travel down 
this path of cutting very important initiatives for the American 
family--and I can't wait till we have the first vote in this 
institution up or down on Social Security to see if the rhetoric really 
matches the reality. Then I am hopeful that if we move to the 
discussion and debate on Medicare, we will see if the rhetoric matches 
the reality.
  But I would hope that before we move on this mindless trail of these 
proposed cuts that have taken place over the last 3 weeks, that we 
might consider what to do about the whole notion of tax evasion. I hope 
that those on the other side of the aisle would join me in my efforts 
to ferret out tax abuse.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield 1 additional minute to the gentleman.
  Mr. NEAL. I have been on this issue for a career of what to do about 
American companies that change their address so that they become a 
citizen of Bermuda to avoid American income taxes, while there are 
hundreds of thousands of American soldiers overseas, why our VA 
hospitals are going to be necessary for the 31,000 that have been 
wounded in honorable service to this country, and why, before we 
propose the cuts that we have proposed, we are not after tax evasion 
the way that we should be. That ought to be something that men and 
women of good will in this institution all ought to be able to agree 
upon.
  Mr. CAMP. Mr. Speaker, I yield 3 minutes to a distinguished member of 
the Ways and Means Committee, the gentleman from Nebraska (Mr. Smith).
  Mr. SMITH of Nebraska. Mr. Speaker, I truly believe that the best 
thing that this Congress can do is focus on jobs, making sure that 
someone might have access to health care through a job. But increasing 
the cost of doing business certainly does not contribute to our effort 
to help create jobs.
  I rise in support of H.R. 4. Repealing the 1099 mandate would only 
help, and certainly in my district, family farmers, ranchers, small 
businesses.
  Let me tell you briefly about a restaurant owner, a small operation.

                              {time}  1200

  He will go from four 1099s to over 200 1099s, and that's after 
spending $7,000 in new software, Mr. Speaker. That certainly provides 
opportunities for a misplaced digit in an identification number that 
will lead to the wrong person being audited, Mr. Speaker.
  And when we look at all the information given here, certainly it 
makes sense to recapture an overpayment of a subsidy so that we can 
return to the people the opportunity to go out, create jobs and, in the 
end, ultimately provide more health care for the American people.
  Mr. LEVIN. I reserve the balance of my time.
  Mr. CAMP. Mr. Speaker, I yield 2 minutes to a distinguished member of 
the Ways and Means Committee, the gentlewoman from Kansas (Ms. 
Jenkins).
  Ms. JENKINS. I thank the gentleman for yielding.
  According to the President's health care law, starting next year any 
business that purchases more than $600 worth of goods or services from 
another business is required to submit a 1099 tax form to the Internal 
Revenue Service. I'm a strong supporter of job creation. However, I do 
not think building more bureaucratic barriers for small business and 
creating additional positions at the IRS is the kind of job growth this 
country needs. As Alan Meyers, an electrician in my district, stated in 
a letter to my office: ``This is absurd. The small business men of this 
country have more paperwork than they can get done now.''
  While we have disagreed about the full repeal of the health overhaul 
law, the administration and many of my colleagues on the other side of 
the aisle have recently decided they strongly agree with Republican 
Members in Congress that the 1099 reporting provisions should be 
repealed. However, a few weeks ago, we received the President's budget 
which would only repeal the 1099 requirement for goods but keep it for 
services--a glaring contradiction to the President's stated strong 
support for the full repeal of this harmful provision.
  So I'm pleased that the House has chosen to move forward with the 
full repeal of this unprecedented burden on small business. 
Furthermore, if my colleagues on the other side of the aisle are truly 
serious about reducing waste, fraud, and abuse in our health care 
system, then they, too, can support this measure with full voice, since 
it is paid for by reducing overpayments of exchange subsidies.
  In this economic environment, Congress needs to be working to remove 
the barriers to job creation and finding ways to rein in the cost of 
health care, not imposing new government mandates to squeeze every 
dollar out of small businesses.
  While we await action from the Senate on H.R. 2, the full repeal of 
this health care overhaul, I urge my colleagues to vote in support of 
H.R. 4 today to fix one of the many flaws in the President's health 
care law.
  Mr. LEVIN. I yield 2 minutes to the gentleman from California (Mr. 
Waxman), the ranking member of the Energy and Commerce Committee.
  Mr. WAXMAN. Madam Speaker, there is widespread bipartisan agreement 
that the 1099 reporting rules need revision. In fact, the agreement is 
so widespread that I'm mystified why we're having this debate. The 
Senate passed a repeal of this policy earlier this year on a bipartisan 
basis. The House, last year, failed to pass a repeal of the provision 
only because of Republican opposition. But now we all agree, let's 
repeal it.
  What's the hang-up? The hang-up is the Republicans want to pay for 
this business tax cut on the backs of lower- and middle-income 
families. This bill would increase taxes by $25 billion in total on 
families earning less than $110,000. Families with incomes around 
$90,000 per year could see increases in taxes of $3,000, according to 
the Joint Committee on Taxation.
  This is a remarkable piece of legislation because it unwinds a near-
unanimous agreement that we had last year. This policy wouldn't just 
increase taxes. It would discourage enrollment in health plans in 
health exchanges.
  Under the Republican proposal, people who are eligible for tax 
credits would have to think very hard as to whether they were 
estimating their income accurately. They are estimating this income in 
the beginning of the year, but later in the year, they may get a raise, 
they may get a promotion. They may even get a job. And then

[[Page 3161]]

they could be hit with a huge repayment penalty for a simple mistake: a 
promotion or a new job.
  The Joint Committee on Taxation estimates that this deterrent effect 
would increase the number of uninsured by 266,000 people. Let's 
withdraw this pay-for and let's get something more reasonable. And 
under these circumstances, I cannot support the bill in its present 
form today, although I certainly support the changes in the 1099 
reporting rules.
  Mr. CAMP. I yield 2 minutes to a distinguished member of the Ways and 
Means Committee, the gentleman from Minnesota (Mr. Paulsen).
  Mr. PAULSEN. I thank the chairman.
  Madam Speaker, I also rise in strong support of the legislation here 
today that would repeal this burdensome 1099 tax requirement contained 
in the new health care law. Failure to eliminate this provision would 
result in vast amounts of new paperwork and additional accounting 
burdens for 30 million businesses that are still struggling in a very 
downbeat economy.
  Now, while having gone virtually unnoticed in the context of the 
entire health care debate, this provision has created quite a bit of 
concern for companies who are already facing increased regulatory 
compliance costs as they get ready for this new provision to take 
effect.
  Madam Speaker, almost every week I get a chance to visit with a small 
business back in Minnesota in my district; and nearly every one of them 
has asked me in bewilderment and in complete disbelief why they would 
be required to have to do this because of the amount of time and the 
amount of energy it will take to comply with this new requirement. So 
now, if there's a small business owner and they want to go into a 
Target store and they purchase $600 worth of office supplies annually, 
they are now going to be required to file a new 1099 form--not only 
with the IRS, but with the Target Corporation. It's a waste of time, 
and time is money.
  We need to be thinking about how we can help our Nation's small 
businesses get back on track by growing jobs and helping our economy 
move forward. It's not the way to do it by increasing more burdensome 
paperwork and bureaucratic paperwork. We need to let them be 
productive, to unleash their productivity, rather than filling out 
unnecessary forms.
  Madam Speaker, I know, with the elimination of this onerous reporting 
requirement, small businesses are now going to be able to focus where 
they should focus their resources: on growing jobs and creating a 
better economy instead of processing additional paperwork and 
navigating bureaucratic red tape.
  Mr. CAMP. Madam Speaker, I yield 2 minutes to a distinguished member 
of the Ways and Means Committee, the gentleman from Nevada (Mr. 
Heller).
  Mr. HELLER. I thank the chairman for yielding time.
  I'm an original cosponsor of H.R. 4 and proudly voted for this 
measure in the House Ways and Means Committee last month.
  Madam Speaker, today's debate marks the second time, over the course 
of 3 months, that the House has taken the opportunity to discuss the 
disastrous consequences the health care bill has and will continue to 
have on our economy.
  The House passed H.R. 2, which repealed the health care bill, with 
bipartisan support in January. Today we consider one of the many 
provisions of the bill that suppress economic recovery and job 
creation. The 1099 reporting mandate will impose substantial paperwork 
and reporting burdens on an estimated 40 million entities, including 
governments, nonprofits, and small businesses. Instead of fostering job 
creation in the private sector--which is what our economy needs--the 
previous Congress has passed a provision that would direct precious 
time and resources to collecting volumes of information and filling out 
mounds of new paperwork for businesses all throughout this country.
  Once the economic engine of this Nation, small businesses are now 
buckling under the weight of onerous mandates and high taxes from a 
Federal Government that spends too much, taxes too much, and borrows 
too much. As a result, unemployment in Nevada has reached record highs 
that currently stand at nearly 15 percent.
  Efforts to repeal the 1099 provision enjoy bipartisan, bicameral 
support.
  I am pleased the House will pass H.R. 4 as part of our commitment to 
alleviate the burden the previous Congress placed on small businesses 
and American taxpayers. I remain committed to overturn the health care 
bill in its entirety. I support targeted legislation such as H.R. 4 to 
provide economic relief as soon as possible.

                              {time}  1210

  Mr. LEVIN. It is now my pleasure to yield 3 minutes to the 
distinguished gentleman from New York (Mr. Rangel).
  Mr. RANGEL. Madam Speaker, I would have hoped that today we would 
have taken advantage of the fact that all of us want to get rid of a 
part of the President's affordable health bill that we believe has not 
reached the objective that we wanted. Everybody, including the 
President of the United States, believes that 1099 in the present form 
should not be there. Republicans and Democrats have voted to make 
certain that it not be there. The last time we attempted to correct it, 
we felt that because of the billions of dollars that would be lost by 
trying to get rid of it, we passed a law and it was rejected because 
the majority party didn't like what we call the pay-for. Since that 
time, the pay-for has been passed into law, it has been accepted, and 
now we are trying to find a new one.
  I don't know why in God's heavens as to why we couldn't have sat down 
to find one, as long as we certainly wanted to avoid fraud on the 
taxpayer, and work out something that is fair. I can't believe that the 
majority doesn't believe that what we are trying to do is to avoid 
having an unintended tax on hardworking people.
  And so if this is going to hold it up and cause us now to throw the 
baby out with the bath water, to have us rejecting what we want to do, 
and that is to get rid of 1099 in its present form, I think it is 
unfortunate.
  Now, I do recognize, Mr. Chairman and members of our distinguished 
committee, that political promises were made before the election. The 
question now has to be that even though there have been commitments by 
certain parties in the majority, that they have to provide savings 
through cutting, those two things should be somehow related. Every cut 
that we have in the budget, whether it is the continuing resolution or 
the budget of 2011 or 2010, doesn't mean that there is a savings.
  So telling the voters and our constituents that we have slashed 
something out of the budget, it really goes beyond politics because 
never in the discussions that I have had in the Ways and Means 
Committee with the majority or with the Democratic Caucus have we ever 
said: Are those people who are going to be helped or hurt Democrats? 
Are those people Republicans? Or did we not say that we were sincerely 
trying to help all Americans to make certain they have affordable 
health care.
  For the majority not to want to correct whatever they think is wrong, 
but to make a campaign commitment they are going to eliminate the bill, 
eliminate the President, and just make certain they have $100 billion 
in cuts, I think is really unfair to present these political problems 
to the American people.
  So I do hope that after we reject this, not because the goal is not 
one that is bipartisan and with the support of the administration, but 
because how it is paid for is detrimental to the taxpayer, whether he 
or she be Republican or Democrat.
  Mr. CAMP. At this time I yield 2 minutes to a distinguished member of 
the Ways and Means Committee, the gentlewoman from Tennessee (Mrs. 
Black).
  Mrs. BLACK. Madam Speaker, I rise today enthusiastically supporting 
H.R. 4, the 1099 repeal bill. This piece of legislation is a victory 
for common sense. It is proof that the House is dedicated to getting 
the government off of the

[[Page 3162]]

backs of American small businesses and working for the people again.
  This bill does three things: it reduces the deficit; it protects our 
taxpayers from waste; and it eases the burdens on small businesses who 
too often have to deal with government breathing down their necks and 
stifling their growth. If this provision were left untouched in the 
President's health care law, small businesses across the country would 
be buried in paperwork. Instead of growing their businesses, 
advertising their services and selling their products and hiring 
workers and growing our economy, business owners would be stuck behind 
a desk filling out IRS forms.
  Just this morning in the Wall Street Journal, it was reported by a 
survey that the small business owners are finding it more and more 
difficult to file their tax forms because of the onerous paperwork. It 
is unconscionable that the Democrat Congress paid for their massive 
spending on their health care bill on the backs of American small 
businesses; but today we're going to fix that.
  As a member of Ways and Means, I am extremely proud to have seen this 
repeal bill take shape in our committee. I am proud that we pay for 
this bill by protecting taxpayers instead of demanding more money of 
them. By reducing waste, fraud, and abuse in the Democrats' health care 
law, we pay for this 1099 repeal, which reduces the deficit by $166 
million in the first 10 years, and by billions of dollars over the long 
run, while reducing the Federal spending by nearly $200 billion over 10 
years.
  This is a huge victory, but it marks the beginning of a new way that 
we are doing business here in Washington. This new House majority will 
continue to enact commonsense policy that does not add to the debt or 
hide their true costs with accounting gimmicks.
  The SPEAKER pro tempore (Mrs. Emerson). The time of the gentlewoman 
has expired.
  Mr. CAMP. I yield the gentlewoman an additional 30 seconds.
  Mrs. BLACK. We can get government working for the American people 
today, and this is a good start.
  Mr. LEVIN. I yield 3 minutes to the gentleman from New Jersey (Mr. 
Pascrell), an active member of our committee.
  Mr. PASCRELL. Madam Speaker, you know, there is an old western song: 
``I'm looking for love in all the wrong places.'' Remember that song? 
It's not too old. Not too old.
  We're looking for revenue in all the wrong places; not only in 
reference to what we did in cutting indiscriminately $60 billion which 
mostly affects the middle class, and I think very dangerously. So this 
provision was in the health care bill which deals with bureaucracy at 
its worst, I would agree. But in July of 2010, we voted with I think 
only, correct me if I'm wrong, two Republicans. We had a shot at this 
in the very beginning of mankind, right, last summer, to vote against 
it. I believe every Democrat voted against this provision, and two 
Republicans joined us, the gentleman from Louisiana on the opposition 
side--the honorable opposition side--who is no longer with us, and I 
don't know if he lost because he voted with us, and another gentleman 
from North Carolina who voted with us. We had a shot at this. We could 
have taken care of this last year, and you chose not to. So let's set 
the record straight.
  So here we are with this 1099 form. It's going to take some time to 
fill it out. We don't like that bureaucracy. The thing comes down to, 
as Mr. Waxman said, as Mr. Neal said, how do you pay for it?
  Now beware, the distinguished chairman for the Ways and Means 
Committee, a Wall Street poll today, not the New York Times, not the 
Village Voice, not fill in the blanks, that poll shows that over 74 
percent, I think, of the American people, that's us, believe that we 
should eliminate tax credits for big oil and gas companies.
  So I'm sure now that the loyal opposition sees that poll in that 
newspaper, that you will join us in putting to rest forever those folks 
who least need any help from the government getting help from the 
government.
  This is going to cost us $22 billion. Both sides agree that one of 
the great benefits of this country is economic mobility.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield the gentleman an additional 2 minutes.

                              {time}  1220

  Mr. PASCRELL. I thank the gentleman from Michigan.
  This bill punishes those who get ahead by raising the tax liabilities 
on families who have worked hard and who may have gotten raises or 
promotions.
  For a family of four in my district, the Eighth District of New 
Jersey--please visit us. We would love to have you, Mr. Chairman--who 
makes $80,000 a year, it will mean the family will get a 50 percent 
reduction on their premiums if they purchase health insurance in the 
marketplace--from the private sector, I might add. There is no 
government operation here. If they get a raise, however, and move above 
the threshold, they pay back a reasonable amount now; but in this 
legislation, under this bill, if they work a little harder and receive 
a financial benefit, the family will be punished. They'll be forced to 
repay the tax credit.
  There is no answer to that question. It's a fact of life.
  This means that the family which I'm talking about now will be hit 
with a surprise--get this, Madam Speaker--of an $11,200 tax bill. It's 
a $20,000 premium. They make $80,000. It's quite a hefty fee, I might 
add. Everything is wonderful with health care in the United States 
right now, but you're going to have added on--because you made a few 
bucks more--$11,200. Unintended consequences. Looking for love in all 
the wrong places. So let us be perfectly clear to the Members voting on 
this legislation:
  It's not a subsidy. There is not only a definitional difference but a 
substantial difference between a subsidy and a tax credit. When you 
take away that tax credit from a middle class American who uses it when 
purchasing insurance, plain and simple, his taxes go up.
  Mr. CAMP. I yield 3 minutes to a distinguished member of the Ways and 
Means Committee, the gentleman from Ohio (Mr. Tiberi).
  Mr. TIBERI. Thank you, Mr. Chairman.
  Madam Speaker, I rise in support of the underlying bill today, which 
goes a long way toward job creation.
  Jobs, jobs, jobs. We heard about that in the November election. We 
heard about the fact that small business owners, in particular, were 
going to be hampered by a provision, by actually two provisions: one 
provision in the health care bill that appears that everyone now seems 
to be opposed to but that the majority voted for; and then another 
provision that appeared in a bill in September of 2010 that even went 
further than the underlying provision in the health care bill, which 
applied to folks who own rental property or to someone who has a 
vacation home or to somebody who has retail property that he's leasing 
out or to somebody who is leasing out a room in his home. Suddenly, now 
we're going to require them to 1099 folks as well.
  What an amazing provision that passed in September of 2010. The bill 
corrects that. The bill corrects both aspects.
  I heard this over and over during my campaign. Think about this: Bob 
Roach, an independent insurance agent, goes out to Staples and buys 
paper. He's going to have to 1099 Staples. He goes to a hardware store 
to fix something in his office. He's going to have to 1099 the hardware 
store. It goes on and on and on. When a law-abiding small business 
owner--maybe a sole proprietor--now is being made the person who has to 
go out and be an extension of the IRS, it is truly amazing.
  Then the pay-for is requiring people who get more than they're 
entitled to to pay it back--what a novel concept--with no penalties, no 
interest. Just pay back something that they're not entitled to.
  Now, I was talking to my immigrant dad and immigrant mom about this. 
My dad has a sixth grade education, and my mom has an eighth grade 
education. They were, first of all, quite

[[Page 3163]]

surprised by the fact that a family of four, making $88,000 a year, 
would get a subsidy. My mom and dad dreamed of making $88,000. They 
never came close to it--but they're middle class, and they're not 
looking for a subsidy, and they certainly would pay it back if they got 
more than they were entitled to.
  Madam Speaker, this is about fairness. This is about jobs. This is 
about equity. This is about moving our economy forward. This is about 
law-abiding citizens not becoming extensions of the IRS. You're either 
for them or against them. I urge support of the bill.
  Mr. LEVIN. I yield myself 15 seconds.
  The gentleman from Ohio mentioned jobs, jobs, jobs. In a colloquial 
sense, this bill would do a ``job'' on middle-income taxpayers.
  I now yield 3 minutes to a member of our committee, the gentleman 
from Texas (Mr. Doggett).
  Mr. DOGGETT. I thank the gentleman.
  I voted previously to repeal these 1099 reporting requirements. But 
for broad Republican opposition, these requirements would have been 
repealed a long time ago.
  I was a little amused to hear one of our Republican colleagues 
actually say this morning that he is bewildered as to why there are all 
these requirements on small businesses around the country as a result 
of this provision. I can cure your bewilderment: Get a mirror out and 
look at the mirror. You will see the Republicans who voted against 
repealing this provision last year.
  No, this is not about repealing 1099. It is about shifting the burden 
onto working families while at the same time protecting insurance 
monopolies.
  Despite the vigorous, determined efforts of these Republicans to 
undermine every aspect of health insurance reform, under current law, 
working families will receive an opportunity to access health 
insurance. Each year, the government will match some of what workers 
pay for their health insurance. The precise amount of the match is 
determined by how low a worker's salary is. A minimum-wage worker would 
get a little more assistance than someone who is at a little higher 
level. This bill ensures that the health insurance companies will get 
to keep all of that Federal match, but it treats the working families 
considerably differently.
  If you have an employee who really shows ability and who may have a 
fairly menial or mundane job but who does it and does it with pride and 
does it well and if that employee excels and if the employer rewards 
him with a bonus and recognizes that that employee is really trying 
hard and then decides we're going to give you a little promotion and 
that you'll get a little more pay or, perhaps, as with so many families 
around this country, that employee decides ``I'll never make it for my 
family on this. I'm going to moonlight. I'm going to take an extra 
job,'' then under any of these developments for the enterprising 
worker, the Republicans today propose a penalty, a tax on success.
  At the end of that year, after those law-abiding employees have 
properly estimated their income from those 12 months earlier, if their 
pay has gone up a dollar over the level, they'll get a steep penalty. 
They may have to pay literally thousands of dollars back even though 
they only got a bonus of a few hundred dollars. They would owe the 
value, perhaps, of the entire credit to the IRS.
  What type of people are we talking about?
  If the law had been fully effective, as I wish it had been this year, 
and if workers who were earning $43,560 got a bonus that took them up 
to $43,600, they would have owed the full amount of the credit at the 
end of the year. $1,000 or perhaps $3,000 or $4,000 to a family as a 
penalty--as a tax on success--is a big amount to that family.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield the gentleman an additional 2 minutes.
  Mr. DOGGETT. Understand the dimensions of how big the burden is that 
they want to shift to working families: According to their own report 
on this bill, the total is almost $25 billion over the next decade. 
We're not talking about a small amount of money. We're talking about a 
significant amount of money in this Republican penalty on success.
  Why haven't they been out here responding to this penalty on success? 
They want to refer to these people as ``cheats.''
  These people aren't cheats. They're people who are the best of 
America, who are striving and working to get ahead, who then get 
penalized for their success.

                              {time}  1230

  They have no answer because there is no answer. We should have passed 
this bill last year and passed it by paying for it by closing 
international corporate tax loopholes. Naturally they resist that just 
as they resist any attempt to control insurance monopolies.
  Vote ``no'' on this penalty for success that would be imposed on our 
working families. Vote against this piece of legislation.
  Mr. CAMP. I yield 2 minutes to a distinguished member of the Ways and 
Means Committee, the gentleman from North Dakota (Mr. Berg).
  Mr. BERG. Madam Speaker, I rise today in firm support of eliminating 
the 1099 requirement that burdens so many of our small businesses and 
costs jobs.
  Madam Speaker, if Congress is serious about getting Americans back to 
work and our economy back on track, the choice is clear. We need to 
repeal this mandate. This law forces American businesses deeper and 
deeper into the bureaucratic Washington nightmare for small business. 
And it takes away from their core mission, which is to grow their 
business and create jobs.
  Small business is the core of North Dakota's economy. Farmers, 
ranchers and small businessmen, they're all burdened by this mandate. 
And another regulation is another expense that makes it even more 
difficult for them to do business.
  This is commonsense legislation. With national unemployment still 
hovering around 9 percent, the decision to repeal this mandate should 
be easy. We desperately need economic renewal, we need private sector 
job growth, and we need to eliminate the small business paperwork 
that's in this mandate. It's time to eliminate this onerous mandate and 
allow business to get back to doing what they do best, and that's 
create American jobs.
  Mr. LEVIN. Madam Speaker, it is now my pleasure to yield 3 minutes to 
the gentleman from Louisiana (Mr. Richmond).
  Mr. RICHMOND. Thank you, Ranking Member Levin.
  Madam Speaker, I agree with the Republican chorus that we've been 
hearing now for 2 days, which is let's repeal this onerous provision of 
the 1099 requirement.
  However, even as a freshman member of the Democratic Party, let me 
say, welcome to the party. The Democratic Party started this July 30 of 
last year to try to repeal this onerous provision and only 2 
Republicans voted for it. Two hundred thirty-nine Democrats said, let's 
do away with this. You're right. It's putting a massive burden on our 
small businesses.
  But not only did you get to the party 7 months late, you got it 
wrong. You decided to dance with Big Oil and corporations that you 
didn't want to close the tax loophole. So what's the pay-for? Well, the 
pay-for is to reach in the pockets of working class Americans and take 
$25 billion. Right now, there are people that are at work, and we're 
here in D.C. and we're going to take $25 billion out of their pocket. 
We should be ashamed of ourselves.
  I join with my colleagues and my good friend from New York (Mr. 
Crowley) who on yesterday tried to have a discourse about is there a 
better way to pay for it. No one would yield. No one would take 
amendments. So I would just say as a new Member, what the American 
people want, when we agree on an idea, let's repeal the 1099 provision, 
they want us to get together and figure out how to do it. They want us 
to see if we can't find some amendments, find some common ground, so 
that we don't have to penalize working families.

[[Page 3164]]

  And I would say what they don't want is for us to reach in their 
pocket, penalize them for success and take $25 billion, when there are 
other ways to do it. But what we should do is get together and figure 
out a way to do it so that we can start moving this country forward.
  Mr. CAMP. I yield 1 minute to the gentlewoman from New York (Ms. 
Buerkle).
  Ms. BUERKLE. Thank you, Mr. Chairman.
  Madam Speaker, I rise in support of H.R. 4, the Small Business 
Paperwork Elimination Act. Too often, Congress and the Federal 
Government pass and institute regulations without counting the cost to 
America's businesses, the lifeblood of our economic success.
  The Patient Protection and Affordable Care Act's 1099 reporting 
requirement for small businesses will be, in the words of Nathan 
Andrews, vice president of Morse Manufacturing, an 88-year-old company 
in East Syracuse, ``a paperwork nightmare.'' He further adds that the 
requirement will hamper the ability of his company ``to function, grow, 
and create jobs.''
  This mandate is really indicative of a larger problem--the 
stranglehold that regulations have on our country. And while 
regulations are sometimes necessary and often well-intentioned, they 
have been increasingly becoming an obstacle to our success as a Nation. 
By success, I mean creating an environment where businesses can 
flourish, providing jobs so that the American people can obtain health 
insurance while still benefiting from the best health care system in 
the world.
  Mr. LEVIN. Madam Speaker, how much time is there on each side?
  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Levin) has 
10 minutes remaining. The gentleman from Michigan (Mr. Camp) has 37 
minutes remaining.
  Mr. LEVIN. I reserve the balance of my time.
  Mr. CAMP. At this time I yield 1 minute to the gentleman from 
Mississippi (Mr. Nunnelee).
  Mr. NUNNELEE. Thank you, Mr. Chairman.
  Madam Speaker, in a day when America has been suffering for nearly 2 
years from significant unemployment, when nearly one in 10 of our 
neighbors is unemployed, it is our duty to do everything we can to 
allow these employers to focus on job creation.
  Today, we will vote to repeal the burdensome 1099 provision included 
in ObamaCare. As pledged to the American people, we will work to get 
this unpopular job-destroying law off the books. We voted to repeal it 
outright, we voted to defund it, and today we begin the process of 
repealing it piece by piece.
  In order to comply with this 1099 mandate, businesses would have to 
spend countless hours generating and receiving needless amounts of 
paperwork. Now I started a small business, and I know the rewards and 
challenges of entrepreneurship. And I can tell you those challenges 
don't need to involve filing needless paperwork.
  Last summer, when I visited Trisha's Day Spa in Grenada, Mississippi, 
and I explained to Trisha Shankle the 1099 requirements in ObamaCare, 
she said that such a requirement would be devastating to her business. 
That's been the conclusion reached in small businesses around America.
  Today, a huge burden will be lifted from the shoulders of small 
businesses, and for that I am grateful. That's why I'm proud to 
cosponsor this legislation and why I will vote to repeal it.
  Mr. LEVIN. I continue to reserve the balance of my time.
  Mr. CAMP. I yield 1 minute to the gentleman from Colorado (Mr. 
Gardner).
  Mr. GARDNER. Madam Speaker, I rise today in support of H.R. 4, which 
would eliminate the 1099 mandate instituted by the President's health 
care bill. I've spoken with countless constituents around the Fourth 
Congressional District of Colorado, not as Republicans, not as 
Democrats, but as business owners, as people who have worked to build 
up their companies from scratch into successful opportunities for 
themselves and their families. They oppose the 1099 provisions of the 
health care bill, not because they're Republicans, not because they're 
Democrats, but because they know it would cause grave impact on their 
businesses and their ability to continue to thrive and grow and hire 
new people.
  Madam Speaker, they are speaking as the voice of this country's 
businesses, the backbone of our economy. If we are going to create jobs 
in this country to move our country forward, then we have got to do it 
starting by the repealing of the 1099 provisions.
  A bill passed last Congress in the 111th Congress, it doesn't matter 
the day or the time, but what passed was a bill where people said, ``We 
need to pass the bill to know what's in the bill.'' People read the 
bill. They know what's in the bill.
  In Weld County a businessman is going to spend 40 hours a month to 
comply with these provisions.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. CAMP. I yield the gentleman an additional 30 seconds.
  Mr. GARDNER. In Larimer County, a manufacturing company is going to 
have to hire new people to comply with the provisions of this act. Is 
that the kind of job creation this body is looking for?

                              {time}  1240

  Let's create penalties on business and hope that it drives the 
economy? That's not right.
  Madam Speaker, today I urge the passage of H.R. 4, with both 
Republicans and Democrats standing up to fight for businesses in this 
country to get our economy moving forward again.
  Mr. LEVIN. Madam Speaker, I reserve the balance of my time.
  Mr. CAMP. Madam Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. West).
  Mr. WEST. Madam Speaker, I stand here to support H.R. 4 for the 
repeal of the 1099 bill.
  At a time when business owners are trying to survive in a sea of 
economic turmoil, our government has thrown them an anchor instead of a 
life preserver. Democrats have borrowed and spent $1 trillion of their 
stimulus program, and the unemployment rate has remained stuck at or 
above 9 percent for nearly 2 years. Our focus must be on measures that 
will actually help American workers and allow employers to focus on job 
creation. H.R. 4 will protect small businesses, their workers, and 
American taxpayers.
  H.R. 4 repeals the onerous tax reporting provisions Democrats enacted 
last year to help pay for both their health care law and the TARP 3 
legislation. It also protects taxpayers by reducing waste, fraud and 
abuse in the Democrats' health care law.
  Finally, this bill will reduce the deficit by $166 million in the 
first 10 years and by billions of dollars over the long run, while 
reducing Federal spending by nearly $20 billion over the next 10 years.
  During a time when the unemployment rate is at or above 9 percent, 
additional government mandates on small businesses is, from the 
standpoint of economic policy, nothing short of idiotic. We should be 
looking for ways to free small businesses and companies from 
unnecessary burdens. We should be looking for ways to encourage 
entrepreneurship. Instead, we have mandates that impose new obstacles 
for companies. We should be seeking ways to restart the engine of job 
growth.
  Let me be clear that I accept the proposition that every person and 
every business entity has both a moral and legal obligation to fully 
report their taxable income. The fundamental problem with the new 1099 
reporting requirement is that they are imposed on a broad universe of 
small business taxpayers that annually conduct more than $600 of 
transactions with other vendors.
  The new filing requirements are both burdensome as well as 
overinclusive.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. CAMP. I yield the gentleman an additional 30 seconds.
  Mr. WEST. Madam Speaker, let us remember that even during the State 
of the Union Address, the President

[[Page 3165]]

gave his support to repeal this onerous, burdensome, and misguided 
mandate.
  Mr. LEVIN. Madam Speaker, I continue to reserve my time.
  Mr. CAMP. Madam Speaker, I yield 2 minutes to the gentlewoman from 
Washington (Ms. Herrera Beutler).
  Ms. HERRERA BEUTLER. Madam Speaker, today I come to the floor in 
support of this legislation because business owners in southwest 
Washington sent me here to clear the runway for them to start growing 
and hiring more people.
  In my district, I know a restaurant owner in Vancouver and a doctor 
who runs a small practice in Tumwater who simply don't have the 
resources to comply with the expanded 1099 mandate. I would rather have 
them focusing on opening a new franchise or offering services to 
patients--basically being successful entrepreneurs--than spending time 
reacting to the mountains of new paperwork they're going to owe the 
IRS.
  My entire region in southwest Washington has been suffering under 
double-digit unemployment for multiple years. In my district's largest 
county, Clark County, the jobless rate hovers between 13 and 14 
percent--and that's reported, there are a lot of people who have 
stopped reporting. I know we're not unique. The entire country is 
depending on Congress to make job creation a serious priority. And by 
passing this bill today, we're showing the people of southwest 
Washington and across America that we're taking them very seriously.
  As I meet with small business owners in my district, they express two 
major sentiments to me over and over again: Fear and uncertainty. 
They're afraid and uncertain about what this government is going to do 
to them next. What I would like to do today is eliminate the 
uncertainty around this 1099 mandate. Small businesses from across my 
district continue to ask me for more predictability from their 
government when it comes to regulations and taxes. Instead of fear, 
increased bureaucracy or higher costs, I'm committed to providing them 
with that predictability.
  By voting to repeal the 1099 paperwork mandate today we do two 
things: First, we take an immediate step that will provide regulatory 
relief to the clinic in Tumwater and the restaurant in Vancouver. 
Second, we send a signal to America that Congress is changing the way 
it views small businesses. They aren't piggybanks, allowed to exist 
only to foot the bill on terribly ill-conceived and unaffordable 
government programs.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. CAMP. I yield the gentlewoman 1 additional minute.
  Ms. HERRERA BEUTLER. Today this new Congress lets small businesses 
know that we see them as the heart and soul of what makes this country 
great, as entrepreneurs that can grow and thrive and succeed as far as 
their hard work can take them. That's the job creation plan that has 
worked for this country for the last two centuries, and I'm confident 
it's the plan that will put folks in southwest Washington and across 
our country back to work.
  Mr. LEVIN. Madam Speaker, I yield myself 1 minute.
  One of the speakers on the majority side said that this was an effort 
to repeal health care piece by piece. That is clearly their misguided 
motivation. Here what they're trying to do is on the backs of the 
middle class of America. They don't defend the pay-for except by 
misrepresentation.
  A tax increase is a tax increase is a tax increase on the middle 
class, on the middle class, on the middle class.
  I now yield the balance of my time to the gentleman from New York 
(Mr. Crowley).
  The SPEAKER pro tempore. The gentleman from New York is recognized 
for up to 9 minutes.
  Mr. CROWLEY. I thank the gentleman from Michigan for his yielding me 
the balance of the time.
  I want to thank all my colleagues for coming to the floor today to 
defend the middle class of this country. We all believe--and I think 
both Democrats and Republicans, it's been evident here today, all 
believe--that the 1099 provisions need to be repealed. We recognize 
that.
  We, too, want to help small business. We recognize that small 
business is the backbone of employment opportunity in our country. And 
that effort has been bipartisan, it has been bipartisan in the Senate, 
but not here. It's because we don't like the pay-for provision that my 
Republican colleagues are proposing and putting forward in this 
legislation because we believe that they switch the burden from the 
small business man and woman and they place it on the backs of the 
working class in this country.
  We want to work in a bipartisan way. We believe we can work together 
and come up with a solution. Now I have to be honest, no one on the 
other side has asked me for a compromise solution, it hasn't happened. 
We passed this bill out of committee about 1\1/2\ weeks ago, almost 2 
weeks ago, and still no one has said Joe, do you have an idea? We have 
a couple of good ideas over here I'd be willing to share with my 
colleagues on the other side, but that hasn't happened as of yet. I'm 
sorry this hasn't happened because I thought with this new Congress we 
would have more bipartisanship, and unfortunately that hasn't developed 
as of yet, at least as it pertains to this bill.
  I'd also like to note that we're going on our third month here in the 
House of Representatives, and quite frankly I can't see much of what 
we've done. I can't say we've done much of anything, quite frankly. I 
can say that if you add up the total, we've imposed upon the American 
people an additional $80 billion in taxes in different various ways, 
the latest of which will be this $25 billion that we're going to impose 
upon the middle class if this bill passes today and somehow becomes 
law. This bill, if enacted, will be a massive increase of tax on the 
middle class.
  I gave an example earlier today--it must have been about 2 hours 
ago--of a family of four earning $88,000, approximately 397 percent of 
the Federal poverty level.

                              {time}  1250

  And I mentioned if the breadwinner of the family, if the husband or 
his wife or either of the spouses is the breadwinner in that family, 
and they get a bonus of $250, I said before that they've done great 
work. They're management material. It's kind of laughable. ``Here's 
$250. Go out and buy the family a steak dinner.''
  That $250 would bump them up to $88,250 which would place them at 401 
percentile of the Federal poverty level, and it would expose that 
middle class family because of their $250 bonus to $4,460.
  Not one, not a single Member of the majority--and we've had over 19 
Members of the majority testify or give remarks on the floor this 
morning and this afternoon--not a single one has refuted or in any way 
questioned the example I've given. You have not refuted that example, 
which can only bring one to conclude that the example I have given is 
indeed correct. I don't want it to be correct, but indeed it is 
correct. And if it is correct, it means a tax, a tax on the middle 
class--one that they cannot afford, especially during these difficult 
times. We don't know when these tough times--when they will ever end 
for the middle class.
  And I think it's shameful the way in which the middle class has been 
characterized on the floor, That somehow they are the folks that cheat 
the system, that they're the ones that can't be trusted. We're not 
talking about the rich. We can trust the rich. We know that.
  And I don't like class warfare, but you know what? The truth is we've 
let the people at the highest percent get off with no shared sacrifice 
whatsoever. No sacrifice. Go on living your lives. We'll have two wars, 
you know, we'll increase the deficit. But don't worry. You all go on 
living your lives in mansions and don't worry about the rest of the 
country because it really won't affect you in the end. You'll always 
survive. You can always hire a police force to protect you. If you need 
health care, you can buy a doctor. If you need the garbage picked up, 
well, you know, sanitation won't pick it up anymore,

[[Page 3166]]

but you can pay someone and they will cart it away. They're living in a 
glass house.
  But the middle class, who are struggling so much, who are looking for 
some breaks, looking for an opportunity to afford health care for 
themselves and for their families--health care. They just want to be on 
an even plane somewhat of everyone else if they can afford health care.
  And the Federal Government is not giving a handout. This is not a 
subsidy. This is not welfare. These are tax credits, like the college 
tax credit that many of our constituents afford themselves of. Like the 
child tax credit that many of our constituents afford themselves of. 
It's a tax credit to help them afford health insurance for their 
families. And they never touch the money.
  It would be one thing if you said to me they got $5,000 in vouchers 
and they took the money and they went off and they bought plane tickets 
to Hawaii for the family for that year, or they took the money and they 
bought a new car, or they took the money and they bought furniture for 
their house. You know, that's scamming the system. That is wrong. That 
we don't promote.
  But they never touch the money. The money goes to the insurance 
company. You know, the insurance companies who desperately need that 
money, they get the money. They're covered. They're fine. We don't ask 
them to be the watchdogs. We don't ask them to make sure the families 
are in compliance, make sure they're not going to go over their income 
levels. They get the money. They walk away. Wipe their hands of it. 
They're taken care of.
  But it's the poor family that inadvertently, unbeknownst to 
themselves, goes over the limit, and they go over the cliff. And when 
they go over the cliff, it's at the tune of nearly $5,000 that they 
would have to repay.
  Instead of rewarding success--which I hear from my Republican 
colleagues all the time, ``We need to reward success''--we're not doing 
it in this instance. What we are doing is we are taxing success, as my 
friend from Wisconsin pointed out. We are taxing success.
  Often I hear about from my friends on the other side we need to 
encourage people to work hard, work harder, don't worry about the 
clock. Don't worry about the clock. Work harder, get ahead. And we 
should not be stopping that.
  But here is a perfect example--and it's not coming from this side of 
the aisle; it's coming from that side of the aisle--of we're saying, 
you know what? Maybe you shouldn't work so hard. Maybe you should pay 
attention to the clock. Maybe you should make sure that when you file 
you're not tripping yourself up and unfortunately discouraging that 
family from getting health insurance because they're afraid they'll owe 
a new tax of nearly $5,000.
  And I agree with my friend from Wisconsin again, this is nothing more 
than a Republican tax trap. It is a trap to the middle class. It's a 
trap to them. It's disparaging. And it's unfortunate that my colleagues 
have placed it in this light that somehow we're reducing or eliminating 
the burden for one group of workers and placing them on the backs of 
the middle class worker.
  I don't begrudge the small businessmen and women. I was one myself 
before I came to Congress. I know the burdens. I understand the bills. 
I understand what comes in. But please don't remove the burden from the 
small businessman and woman and place that on the backs of middle class 
taxpayers. That's what you're doing.
  If you vote for this bill, you will vote to increase taxes on the 
middle class. Don't kid yourselves. A tax on the middle class.
  Mr. CAMP. Madam Speaker, I yield myself the balance of my time. I can 
assure the Speaker that I will not be using all of the balance of my 
time.
  There has been a lot of rhetoric today, and as this debate winds down 
and as we prepare to vote on this legislation, I urge my colleagues to 
look at the facts.
  I think many of the arguments we've heard from the other side ignore 
reality. It ignores the reality of their own legislation--legislation 
that they've passed. It ignores the reality of their own votes.
  Under the health care bill, you put cliffs in the bill, if we want to 
talk about cliffs. There are levels where people need to pay back the 
entire amount of the subsidy they receive. In the original bill, that 
was at 400 percent of poverty. That is the level that is no legislation 
we see today. Later in December, when you wanted to address the doctor 
fix, you just moved that level up to 500 percent of poverty. There is 
still a cliff in the bill. There was a cliff in the original bill. 
There is a cliff now.
  Also, this idea that repaying a subsidy to which one is not entitled 
is somehow a new concept was in the original health care legislation. 
It still is in the original health care legislation. We just believe we 
need to take further steps to protect the taxpayers.
  And I would also say that if you look at the legislation, there is on 
page 123 a subpart (b) eligibility determination where applicants apply 
for the subsidy, and they're required to report certain things. But 
they're also required under this section to report changes in 
circumstances. That obligation is on the taxpayer, on the person 
seeking the subsidy. And that is in their legislation, and we think 
that's an important concept to protect.
  Let's stick with the facts. The fact is the increased tax reporting 
requirements enacted last year will hurt our ability to create jobs. 
The 1099 provision hurts our ability to create jobs in this country.
  Fact, the unemployment rate has been stuck at or above 9 percent for 
nearly 2 years, and this Congress owes it to the American people to do 
everything it can to help small businesses, job creators, and workers 
get back on their feet.
  Fact, repealing the 1099 provision is a top priority of small 
businesses, and that's why we have over 225 organizations supporting 
this legislation, including the Nation's largest small business 
organization, the NFIB.
  And, fact, this bill is a tax cut and a spending cut, and that's why 
it has the support of groups like the Americans for Tax Reform, the 
National Taxpayer Union and Americans for Prosperity.
  Madam Speaker, I urge my colleagues to vote for this bill so small 
business can get back to what they do best: creating jobs.
  I yield back the balance of my time.
  Mr. HOLT. Madam Speaker, I rise in opposition to H.R. 4, the Small 
Business Paperwork Mandate Elimination Act of 2011.
  I regret that the authors of this legislation have taken such a 
thoughtless approach. We could have had before us today a bill that 
would repeal any unnecessary and burdensome paperwork that is at issue 
here and we could have done it without putting burden on ordinary 
families.
  This bill would repeal a reporting requirement that would require 
business owners to provide an IRS form 1099 to all vendors with whom 
they pay $600 or more annually for their services.
  I agree that this reporting requirement should be repealed. In fact, 
I voted to repeal this requirement last year. Unfortunately, the bill 
attracted only two Republican votes and failed to pass the House on 
July 30, 2010. This Congress, I am a cosponsor of the Small Business 
Tax Relief Act of 2011, which would repeal the 1099 reporting 
requirement.
  H.R. 4 would change the subsidies and repayment obligations of the 
tax credits available for people with incomes below 400 percent of 
poverty to assist with the cost of obtaining affordable health 
insurance. This would be a massive tax increase on the middle class.
  These tax credits will help low and middle income individuals and 
families pay insurance premiums. The credits are available for those 
individuals and families--up to 400 percent of the poverty line and cap 
the family's share of health insurance premiums at 9.5 percent of 
adjusted gross income.
  This bill would force people to pay back billions of dollars in tax 
credits they received to obtain affordable health insurance. Since the 
tax credits go directly to the health insurance company, individuals 
and families who had small fluctuations in their income would have to 
pay back money that they never received. For example, under this 
legislation a family of four earning $88,000 a year would have to pay 
$4,640 that they never received if the family got an unexpected $250 
year-end bonus.
  In a time where we want to create jobs, this bill would penalize 
individuals who found a

[[Page 3167]]

new job or got promoted. This bill harms average working Americans who 
cannot obtain insurance through their employers--the exact people we 
should be helping.
  I agree that this reporting requirement should be repealed. That is 
why I am a cosponsor of the Small Business Tax Relief Act of 2011. That 
bill would repeal the 1099 reporting requirement, but does not increase 
taxes on the middle class.
  Today, we have a chance to vote against increasing taxes for hard 
working Americans. I urge my colleagues to vote no on this piece of 
legislation.
  Mr. SENSENBRENNER. Madam Speaker, I rise today in support of the 
Small Business Paperwork Mandate Elimination Act, as I believe it 
serves as a critical step in the ongoing process of preventing last 
year's health care law from destroying American jobs. We cannot ignore 
the cries from businesses around the country that the 1099 reporting 
requirement is an unnecessary burden that will cost jobs.
  In a time when our economy is struggling to emerge from one of the 
worst recessions in generations, we must work to free small businesses 
from onerous regulatory burdens. We cannot afford to promote policies 
that use needless paperwork as a means to strangle growth and 
prosperity. The 1099 reporting requirement on transactions greater than 
$600 was included in the health care overhaul without consideration of 
the individuals, families, and small businesses that would suffer as a 
result. By devoting more resources to comply with this new requirement, 
we are preventing businesses from doing what is essential: creating 
jobs.
  But the disregard for small businesses did not stop there. Last fall, 
the 1099 reporting requirement was expanded to include rental property 
expense payments. Instead of recognizing the disastrous effect of this 
new requirement, there were those in the last Congress who decided it 
was a good idea to expand it. Now we are left with even more taxpayers 
who will suffer the consequences of an already misguided regulation.
  Today we have the opportunity to correct the mistakes of the past. 
H.R. 4 allows this Congress to stand up for small businesses and hard-
working taxpayers by eliminating what is obviously a job destroying 
regulation. By removing the 1099 reporting requirement, we will free 
businesses from time-consuming paperwork so that they may grow and help 
our economy recover. We all hear from our constituents, ``Where are the 
jobs?'' By supporting this legislation, we can show the American people 
that we are serious about creating a business environment that promotes 
job growth and prosperity.
  I applaud the gentleman from California for recognizing early on the 
negative impact this regulation will have on small businesses. I 
encourage my colleagues in the Senate to consider this legislation 
quickly so we can bring certainty to American businesses and avoid the 
obvious complications that the 1099 reporting requirement presents.
  Mr. VAN HOLLEN. Madam Speaker, as I have done before, I rise today in 
strong support of eliminating the 1099 paperwork requirement on small 
businesses. In fact, I would remind my colleagues on the other side of 
the aisle that the only reason we are here today--the main reason this 
is still an issue at all--is because House Republicans opposed 
eliminating this provision when the Small Business Tax Relief Act of 
2010 was brought to the floor of the House in July of last year.
  So this issue isn't new, and it really isn't a question of whether 
there is bipartisan agreement to repeal this onerous requirement. There 
is. The question is how you pay for it. And that's where today's bill 
goes astray. We can and should repeal the 1099 reporting requirement. 
But we should not do it on the backs of middle class Americans buying 
health insurance for their families who are playing by the rules and 
complying with the law. And I would point out that the law they're 
complying with received a near unanimous vote of 409-2 this past 
December.
  I stand ready and willing to work with my colleagues on both sides of 
the aisle to find an acceptable way to pay for this repeal before the 
requirement takes effect in 2012. But I strongly believe that effort 
should focus on ending any of the myriad loopholes and unjustified 
subsidies in current law before imposing an effective tax increase on 
the middle class.
  Ms. HAYWORTH. Madam Speaker, yesterday morning I received a letter 
from a constituent, Seth Arluck of New Hampton, NY.
  Seth's three-generation family business was hit hard by the housing 
market crash. The 1099 rule in the Affordable Care Act, Seth says, 
``would place a disproportionate burden on my very small lumber yard. . 
.I do not need an additional and unnecessary expense that serves no 
apparent purpose.''
  He adds that the penalty for 1099 non-compliance, to fund small-
business lending, adds insult to injury: ``How clever, fine the heck 
out of me, and loan me the money to pay fines.''
  Madam Speaker, this is no way to treat the engine of growth for 
America. Instead of investing in adapting to his clients' needs in 
changing times, Seth Arluck will now have to spend precious time and 
money on paperwork.
  The bill we must pass today is an important step toward curing the 
ill effects of the Affordable Care Act. The Senate has already acted 
and I call on President Obama not to delay helping Seth, and so many 
other of our Nation's job creators put Americans back to work.

                                                    March 2, 2011.
     Hon. Nan Hayworth,
     LHOB,
     Washington, DC.
       Dear Dr. Hayworth: I am very concerned about the 1099 
     reporting provision in the healthcare bill passed in the 
     111th Congress. This requirement, to issue a 1099 for each 
     business to business expenditure over $600, would place a 
     disproportionate burden on my very small business. I am the 
     third generation of my family to operate this retail lumber 
     yard in Orange County. Our sales and revenues, so dependent 
     on the housing and home improvement sectors, have seriously 
     declined since 2008. We have gone from seven to four 
     employees including myself and my brother; our part time 
     bookkeeper was one of the staff reductions.
       Last year we wrote 600 checks for purchases other than 
     payroll. We have about 150 vendors in our accounts payable. 
     Although many of our purchases are with recurring vendors, 
     there are many one time purchases which exceed $600: repairs 
     to vehicles and equipment, replacement of computer and office 
     equipment, one time advertising expenses, dues to business 
     organizations, annual insurance premiums, and sundry 
     expenses. How many 1099's would I have to produce? 50, 75, 
     100? I know that it would exceed the three that are done now 
     for interest and rent. I am now the bookkeeper; do I attempt 
     this challenge or pay my accountant or another outsource. I 
     have forgone many paychecks in the last two years, I do not 
     need an additional and unnecessary expense that serves no 
     apparent purpose.
       Another aspect of this requirement is the need to obtain 
     each vendor's Federal I.D. or Social Security number in order 
     to legally comply with 1099 reporting. That means that if a 
     business has any chance of cumulatively exceeding the $600 
     threshold, the SSN or EIN has to be asked for in advance. In 
     these times of rampant identity theft, there will be many 
     refusals to furnish these ID numbers. Failure to correctly 
     report a l099 results in fines. As if that was not daunting 
     enough, the previous Congress passed HR 5297 last September, 
     The Small Business Jobs Act, which increased the penalty for 
     1099 non-compliance from $50 to $250 per violation. The 
     increase in fines was to help fund small business lending. 
     How clever, fine the heck out of me, and loan me the money to 
     pay fines. Thank you 111th Congress.
       And what justifies this new layer of regulation? The 
     apparent belief that business is inherently untrustworthy and 
     cheating the U.S. Government of it's rightful tax revenues? 
     Is it the need to find any alleged revenue source, no matter 
     how unsavory, to fund Obamacare? No thank you.
       Please repeal the 1099 provision now.
           Sincerely,

                                               Seth N. Arluck,

                                                        President,
                                      New Hampton Lumber Co. Inc.,
                                                  New Hampton, NY.

  Ms. SCHAKOWSKY. Madam Speaker, I rise in opposition to H.R. 4, the 
Small Business Paperwork Mandate Elimination Act of 2011.
  We all agree that the 1099 reporting requirements added by the Senate 
to the Affordable Care Act need to go. That is not in question. None of 
us wants to burden small business men and women with unreasonable 
reporting burdens. All of us are committed to eliminating this 
requirement.
  In fact, we could have and should have solved this problem last year, 
when the House voted on H.R. 5982, the Small Business Tax Relief Act. 
Unfortunately, all but two Republicans voted against that bill. That 
bill, like today's bill, would eliminate the 1099 provision. Unlike 
today's bill, however, it paid for the $24.9 billion cost of repeal in 
a very, very different manner.
  H.R. 5982, the Democratic approach, would have paid for reform by 
eliminating tax loopholes that allow corporations to ship jobs 
overseas. It would have solved the problem while also eliminating 
incentives to locate operations overseas. Creating American jobs should 
be our number one priority, and H.R. 5982 would have helped us do that.
  H.R. 4, the Republican approach, doesn't close corporate offshoring 
loopholes. Instead, it puts the $24.9 billion cost of repealing the 
1099 reporting requirements squarely on the backs of middle-class 
families. It undermines

[[Page 3168]]

the entire approach of the Affordable Care Act--to help individuals and 
families obtain affordable, quality health care--by imposing taxes on 
those who receive assistance to help pay premiums and cost-sharing 
requirements.
  Under the Republican bill, individuals and families who are eligible 
to get assistance at the beginning of the year are subject to taxation 
if they are fortunate enough to get a raise or a better job by the end 
of the year. Even if they are a few dollars over the eligibility limit, 
the Joint Committee on Taxation estimates that they could be subject to 
taxes up to $6,000 under H.R. 4. The assistance, by the way, is given 
directly to the insurance company but the tax penalty would come 
directly out of the pockets of families.
  The Republican bill not only would impose harsh penalties on middle-
class families, it would also undermine the second principle of the 
Affordable Care Act: to expand coverage. Again according to the Joint 
Committee on Taxation, it would take away coverage from 266,000 
Americans who would no longer take insurance because of concerns that 
they could potentially be required to pay substantial taxes the 
following year.
  I wish I could vote today to repeal the 1099 reporting requirements, 
just as I voted to repeal them last year. I cannot, however, solve the 
burden on small businesses by imposing a burden on middle-class 
families, particularly when we have so many better choices to pay for 
repeal.
  Mr. REED. Madam Speaker, I rise today to support H.R. 4, the Small 
Business Paperwork Mandate Elimination Act of 2011. The expanded 
reporting requirements to the Internal Revenue Service are mandated by 
the health care reform act of 2010 on any purchase made $600 or more. 
This provision would directly impede economic growth in the 29th 
District of New York. At a time of great uncertainty, the economic 
recovery in the 29th District continues to lag behind the rest of the 
nation. This burdensome mandate must be eliminated and I proudly 
support the repeal for the sake of our small businesses and farmers.
  Further, we must act to ensure that ``red-tape'' measures and over-
reaching regulations do not continue. If we are going to reduce 
government spending, it starts with repealing unnecessary requirements, 
such as the 1099 requirement. This provision of the health care reform 
law contributes to the bloating of the Federal Government and must be 
repealed. As we move forward towards returning fiscal prosperity to our 
nation, I will remain committed to the interests of small businesses 
and farmers, protecting them from burdens which restrict their growth. 
I urge all of my colleagues to vote in favor of repealing the expanded 
1099 requirement.
  Ms. EDDIE BERNICE JOHNSON of Texas. Madam Speaker, I voted against 
the H.R. 4, the ``Small Business Paperwork Mandate Elimination Act of 
2011'' commonly known as ``the 1099 provision''. I would like to submit 
a statement for the Record to clarify my position on this issue.
  Forms 1099 have been used by the IRS for decades to better track 
income. The rules would have required businesses to file Form 1099 with 
the IRS to report payments made to corporations for goods and certain 
services to help the IRS collect taxes that are legally owed, and in 
turn, keep taxes lower for all taxpayers.
  Although I support the measure in principle, I do believe this type 
of reporting keeps track of what businesses owe the federal government 
in taxes and close any loopholes for any misreporting. In fact, during 
the 111th Congress, a repeal bill was approved by the Democratic House 
that would close tax loopholes for companies that ship jobs overseas 
and protected people from any tax increases with incomes below 400 
percent of the federal poverty level (approximately $88,000 for a 
family of four) from having to pay back the IRS their tax credit if 
they saw a change in income.
  The Republican 1099 repeal removes this protection. So, if a family 
earning $88,000 a year gets a $250 Christmas bonus, and because of it, 
are bumped up to 401 percent of the federal poverty level, this family 
would be required to refund to the IRS the entire tax credit of 
$4,640--out of their own pockets.
  As a Senior Member of Congress who proudly represents a vibrant small 
business sector, I know firsthand the value of small businesses in 
north Texas. I remain committed to improving tax administration and 
enhancing voluntary tax compliance without making the middle class pay.
  I look forward to working collaboratively with the small business 
community to improve the ability of small businesses to meet their tax 
obligations.
  Mr. STARK. Madam Speaker, the debate we're having today has nothing 
to do with repealing the 1099 provision. Like every Democrat here who 
was in Congress last year, I've already voted to do that.
  We brought forth a bill last year to repeal the 1099 provision and 
paid for it by closing tax loopholes that encourage businesses to move 
jobs overseas and other loopholes that promote tax avoidance. Even 
though that bill was endorsed by NFIB, all but two of our Republican 
colleagues voted no because they preferred to protect big business over 
small businesses.
  Because of Republican opposition last year, we're here again 
considering legislation to repeal the 1099 provision. Unfortunately, 
our Republican colleagues have taken an area of agreement and rejected 
bipartisanship by choosing to tax middle class families. That's right, 
this Republican bill is a $25 billion middle class tax increase.
  The Affordable Care Act provides tax credits to make health coverage 
affordable to those with lower and middle incomes. These tax credits 
are provided in advance and then are reconciled at the end of the year. 
In this bill today, Republicans are trying to raise $25 billion by 
putting middle class families on the hook for massive tax increases 
when they reconcile those payments. The Joint Committee on Taxation 
estimates that this Republican bill will raise taxes on middle class 
families in this income category by an average of $3,000. Many families 
would be liable for much higher tax increases.
  The President has announced his strong opposition to this financing 
mechanism. Consumer Advocates have also spoken out in opposition. These 
groups include Families USA, Community Catalyst, SEIU and the Center on 
Budget and Policy Priorities.
  All of us want to resolve this 1099 problem. But to do so on the 
backs of middle income working Americans is flat out wrong. I urge my 
colleagues to join me in voting no on this bill today so that we can 
come together and find a way to finance 1099 repeal that doesn't gouge 
the middle class.
  Mr. CANTOR. Madam Speaker, last November, Americans sent a clear 
message of defiance to the status quo. They saw that government was 
spending taxpayer money recklessly and making it harder for our job 
creators to put Americans back to work--and they voted for something 
better.
  House Republicans have responded by doing everything in our power to 
foster an environment where businesses can expand, investors can 
invest, and hard work can be rewarded. That means cutting excessive 
spending and burdensome regulations and growing private-sector jobs and 
the economy.
  Today we are cleaning up the mess resulting from oppressive new 1099 
requirements.
  Tucked into Obamacare and a so-called small business bill last year, 
these regulations threaten to wreak havoc upon small businesses. They 
have become a symbol of the unanticipated pitfalls of big government 
and partisan legislative procedure.
  In this challenging climate, businesses should be able to focus on 
staying profitable and looking for opportunities to grow. Instead they 
are being asked to divert precious time and resources to satisfy yet 
another layer of red tape from Washington.
  By repealing these ill-conceived requirements, we take a big step 
toward putting America back on a growth footing. We reaffirm that this 
Congress will no longer finance the expansion of government on the 
backs of our small businesses, America's economic engine.
  The United States is the creative capital of the world. We have the 
most innovative entrepreneurs and the most determined and resilient 
workforce.
  Our businesses and our people have proven that they can out-innovate 
and out-compete any country in the world. But they can't do it if 
Washington keeps making it harder for them. And they can't do it if 
they are plagued by fears of excessive regulation, higher taxes and 
inflation.
  Our job as legislators is to create opportunity--to restore the 
principle that everyone in America has a fair shot.
  That's why it is imperative that we cut needless regulation and bring 
spending down to sustainable levels. And that's why it is incumbent 
upon us to support this legislation to make sure small businesses 
aren't bogged down in needless paperwork so that they can grow and 
create jobs. I urge my colleagues to support H.R. 4.
  Mr. GRAVES of Missouri. Madam Speaker, our nation's small businesses 
create 7 of every ten 10 new jobs. They represent 99.7 percent of all 
employer firms, and employ 97.5 percent of all identifiable exporters. 
They are the entrepreneurs that can lead us out of the economic 
downturn. We are depending on them to reinvigorate our economy. But the 
fact is, Washington has not provided them with an environment in which 
they can thrive.

[[Page 3169]]

  At House Small Business Committee hearings, owners of small firms 
have told us week after week that they want Washington to get out of 
the way so they can do what they do best: create jobs and help move our 
economy forward. But Washington keeps piling on mandates that hold them 
back. The expanded 1099 information reporting requirement is a perfect 
example.
  At one of our recent hearings, a small manufacturer from North 
Carolina said, ``The expanded 1099 reporting requirement included in 
the healthcare law is a good example of the kind of misguided policy 
that works against the interest of small businesses. Tax filing is 
never a task small business owners look forward to, but making filing 
more burdensome only drains resources from already struggling 
companies.'' Few industries have been as affected by the economic 
downturn as home builders. A small home builder from Kentucky said, ``. 
. . [T]here will be significant costs involved to track, aggregate and 
report required transactions.''
  Madam Speaker, at a time when we should be making it easier to create 
jobs and promote economic growth, small businesses don't need another 
costly and burdensome mandate. I thank Chairman Camp for his work in 
advancing this important legislation to the House Floor, and recognize 
Chairman Lungren for his leadership on this issue. I ask my colleagues 
to support H.R. 4.
  Mr. DINGELL. Madam Speaker, I rise in opposition to H.R. 4, the Small 
Business Paperwork Mandate Elimination Act. I want to say on record, 
however, that I support repeal of the Affordable Care Act's 1099 
mandate. This onerous paperwork requirement was included in the act at 
the insistence of our colleagues in the other body, and not by us in 
the House.
  The 1099 mandate should be repealed, but it must be done in a 
fiscally responsible manner than does not harm working families, who 
struggle every day to cope with the effects of the current recession. 
The bill we are presently considering passes the cost of the 1099 
repeal on to middle class Americans by ensuring that more of them will 
be subject to increased taxes. Moreover, H.R. 4 will reduce the number 
of Americans with health coverage by over a quarter-million, according 
to the Joint Committee on Taxation.
  Madam Speaker, H.R. 4 is a poor compromise, reminiscent of the 
legislative travesty foisted on the American people last December when 
Senate Republicans insisted unemployment benefits come at the price of 
tax cuts for the rich. I call on my colleagues to oppose this bill and 
instead work to find more responsible ways to pay for the repeal of the 
1099 mandate, such as closing foreign tax loopholes and eliminating tax 
breaks for oil companies.
  Ms. JACKSON LEE of Texas. Madam Speaker, I rise today in opposition 
to H.R. 4, the Small Business Paperwork Elimination Act of 2011. The 
stated purpose of this is to amend the Internal Revenue Code to repeal 
a provision added by the Patient Protection and Affordable Care Act 
that extends to corporations that are not tax-exempt, the requirement 
to report payments of $600 or more.
  However, I must say that while I strongly support providing relief to 
America's small businesses and I absolutely support the landmark 
Patient Protection and Affordable Care Act, I deeply regret that yet 
again we have had a closed rule regarding the full consideration and 
making of useful, meaningful amendments to H.R. 4. When the Republican 
majority came into this Congress they promised an open and transparent 
process. This is not open and transparent. It does not provide the 
assistance to America's small businesses that my colleagues on the 
other side of the aisle would like us to believe and in fact, further 
burdens small businesses.
  If we had a truly open process, we could have all worked together in 
a bi-partisan manner to provide real relief to America's middle class 
and small businesses instead of the tax increase we are being asked to 
heap onto their backs today.
  The simple fact is that H.R. 4 Would Increase Taxes on Middle Class 
and Raises the Number of Uninsured.
  It is not good for the people of the 18th congressional district of 
Texas, it is not good for the State of Texas, and it is not good for 
the United States of America.
  H.R. 4 Increases Taxes on the Middle Class. H.R. 4 would force many 
middle-income Americans to pay higher taxes. Simply by accepting a 
better job, picking up extra shifts or receiving a holiday bonus, these 
families would have to pay the IRS the value of their health premium 
tax credits, jeopardizing their financial security.
  H.R. 4 Creates a Steep Cliff that will Penalize the Middle Class. It 
would eliminate protections for families with income between 400 and 
500 percent of poverty ($88,000 to $110,000 for a family of four). That 
means if a family's actual annual income was even one dollar above 400 
percent of poverty, they could have to pay the IRS the entire value of 
their health insurance premium tax credits. According to the Joint 
Committee on Taxation, the average payment for a family between 400 and 
450 percent of poverty will go up by $3,000 due to the Republican 
policy, for a total of $6,000 or more in payments to the IRS.
  H.R. 4 Undoes the Bipartisan Agreement on Health Care. While there 
has been contentious disagreement about health reform, the structure of 
the repayment caps is one of the few health reform issues with strong 
bipartisan agreement. The House fixed the problem of a steep cliff if 
one's income increased to 400 percent of poverty by a bipartisan vote 
of 409-2 last December--and it was signed into law. H.R. 4 undoes that 
bipartisan agreement so that Republicans can increase taxes on the 
middle class--those between 400 and 500 percent of poverty--by $25 
billion.
  H.R. 4 Leads to an Increase in the Number of Uninsured. According to 
the Joint Committee on Taxation, the Republican proposal will cause an 
increase in the uninsured of 266,000. Over a quarter of a million 
individuals will no longer receive health insurance out of fear that 
they will be forced to pay substantial amounts to the IRS at tax time.
  H.R. 4 Disproportionately Hurts Families Living in High Premium 
Areas. Families who have to pay the IRS the value of their health 
premium tax credits will have to pay even more if they live in parts of 
the country that have higher premiums due to circumstances in the local 
market.
  So, I urge my colleagues to join me in opposing this bill and 
supporting true bipartisan relief for America's middle class and small 
businesses.
  Mr. MARINO. Madam Speaker, I rise today in strong support of H.R. 4, 
the Small Business Paperwork Mandate Elimination Act of 2011. This 
legislation would repeal one of many burdensome requirements being 
imposed on Americans, especially the job creators, by the health care 
law passed last year. This 1099 mandate highlights the problem with 
ignoring the voice of the American people and passing a ``bill so you 
can find out what is in it.''
  Small business owners from Northeastern Pennsylvania have found out 
what was in the health care bill and they are not happy:
  Small business owner, Arthur Borden of Lewisburg, states, ``It's hard 
to believe that elected representatives of our people could be so 
irresponsible to allow such a ridiculous provision as the 1099 mandate 
included in the recently passed health care law. As the owner of a 
small business which is already overburdened by rules, regulations, and 
rolls of red tape, I am appalled and frightened by the prospects of 
what such an ill conceived law will do.''
  Small business owner, Bruce Brown of Clarks Summit, states, 
``Businesses are already overburdened with tax paperwork and reporting 
requirements, so the additional requirements included in the PPACA will 
only increase the cost and complexity of complying with the tax code.''
  Small business owner, Thomas Musser of Mifflinburg, simply states, 
``I do not support the 1099 tax reporting requirement.''
  The Pennsylvania based business networking organization, SMC Business 
Councils, released a survey of its member businesses which found that 
their members file roughly 10 forms per year; under the new requirement 
from the health care law, the members estimated that would jump to more 
than 200 a year. The new costs associated with complying with this 
mandate would cripple small businesses across my district and the 
Commonwealth.
  I join with my constituents and all small business owners throughout 
the nation in support of repealing the onerous 1099 reporting 
requirement. Furthermore, this debate is yet another reminder as to why 
we need to repeal the jobs-destroying health care bill and begin the 
process of methodically and thoughtfully reforming the health care 
system in an open and transparent manner, taking into account 
viewpoints from both sides of the aisle. Most importantly though, we 
must take into account the voice of the American people. This was 
omitted from the process a year ago, and today we begin process of 
cleaning up the mess that occurs when this omission happens.
  Mr. BISHOP of Georgia. Madam Speaker, I have heard complaints from 
farmers and small business owners across the 2nd congressional district 
who believe that having to file this onerous 1099 form for any payment 
greater than $600 is an unnecessary bureaucratic nightmare that needs 
to be repealed. Small businesses are the engines that drive our 
nation's economy, and they should focus on creating jobs, not filling 
out paperwork. Now is the time

[[Page 3170]]

to reduce the obstacles for small business growth, not increase them, 
and repealing this provision would help accomplish that goal.
  If action is not taken, the 1099 reporting requirements set to be 
enacted in 2012 will bury our country's farmers and small businesses 
owners in excessive paperwork. It ultimately will raise the cost of 
doing business and create an economic burden through increased prices 
for goods and services. Meanwhile, the IRS will be swamped in 1099 
Forms while other vital enforcement activities are not met.
  It is undisputed that these requirements are unacceptable. There is 
nearly unanimous agreement in Congress around repealing this onerous 
provision. Already the Senate has taken action and approved bipartisan 
legislation that would fix this problem. Nevertheless, the House 
Majority has decided to poison the legislation at hand with an offset 
containing a severe tax increase aimed squarely at middle income 
Americans. It would raise taxes on middle-income families who simply 
get a new job, work extra shifts, or receive a bonus for good 
performance. It is insensitive and even more onerous due to the fact it 
would place a greater burden on working families trying to purchase 
health care.
  While I support repealing the overly burdensome 1099 requirements--
and while I will reluctantly vote for this legislation--I find the 
choice that the Majority has put in front of us to be truly 
objectionable. The current offset will raise taxes and will hurt 
Americans' access to health care. This choice is unacceptable, and I 
look forward to working with the Senate and the Administration to 
ensure that this divisive and unnecessary attack on middle-income 
Americans is taken out of the final legislation and that a more 
suitable offset is found.

                              {time}  1300

  The SPEAKER pro tempore. Pursuant to House Resolution 129, the 
previous question is ordered on the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                           Motion to Recommit

  Mr. McNERNEY. Madam Speaker, I have a motion to recommit at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. McNERNEY. I am opposed in its current form.
  Mr. CAMP. Madam Speaker, I reserve a point of order.
  The SPEAKER pro tempore. A point of order is reserved.
  The Clerk will report the motion to recommit.
  The Clerk read as follows:

       Mr. McNerney moves to recommit the bill H.R. 4 to the 
     Committee on Ways and Means with instructions to report the 
     same back to the House forthwith with the following 
     amendment:
       Add at the end of the bill the following new sections:

     SEC. 5. NONREFUNDABLE PERSONAL CREDIT FOR TAXPAYERS SUBJECT 
                   TO A TAX INCREASE UNDER THE SMALL BUSINESS 
                   PAPERWORK MANDATE ELIMINATION ACT OF 2011.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 25D the following new section:

     ``SEC. 25E. CREDIT FOR TAXPAYERS SUBJECT TO A TAX INCREASE 
                   UNDER THE SMALL BUSINESS PAPERWORK MANDATE 
                   ELIMINATION ACT OF 2011.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the excess 
     (if any) of--
       ``(1) the regular tax liability of the taxpayer for the 
     taxable year, over
       ``(2) the regular tax liability of the taxpayer for the 
     taxable year, determined by applying section 36B(f)(2) (as in 
     effect on the day before the date of the enactment of this 
     section) in lieu of section 36B(f)(2) (as in effect on the 
     day after the date of the enactment of this section).
       ``(b) Carryforward of Unused Credit.--
       ``(1) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(2) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a)(1) for such taxable year reduced by the sum 
     of the credits allowable under this subpart (other than this 
     section), such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a) for such succeeding taxable year.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (2) Section 25(e)(1)(C) of such Code is amended by 
     inserting ``25E,'' after ``25D,'' both places it appears.
       (3) Section 25A(i)(5)(B) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (4) Section 25B(g)(2) of such Code is amended by inserting 
     ``25E,'' after ``25D,''.
       (5) Sections 25D(c)(1)(B) and 25D(c)(2)(A) of such Code are 
     both amended by inserting ``and section 25E'' after ``this 
     section''.
       (6) Section 26(a)(1) of such Code is amended by inserting 
     ``25E,'' after ``25D,''.
       (7) Section 30(c)(2)(B)(ii) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (8) Section 30B(g)(2)(B)(ii) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (9) Section 30D(c)(2)(B)(ii) of such Code is amended by 
     striking ``sections 23 and 25D'' and inserting ``sections 23, 
     25D, and 25E''.
       (10) Section 1400C(d) of such Code is amended by inserting 
     ``25E,'' after ``25D,'' both places it appears.
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of such Code is 
     amended by inserting after the item relating to section 25D 
     the following new item:

``Sec. 25E. Credit for taxpayers subject to a tax increase under the 
              Small Business Paperwork Mandate Elimination Act of 
              2011.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2013.

     SEC. 6. INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION 
                   ACTIVITIES.

       (a) In General.--Subparagraph (B) of section 199(c)(4) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``and'' at the end of clause (ii), by striking the period at 
     the end of clause (iii) and inserting ``, and'', and by 
     inserting after clause (iii) the following new clause:
       ``(iv) in the case of a major integrated oil company (as 
     defined in section 167(h)(5)), the production, refining, 
     processing, transportation, or distribution of oil, gas, or 
     any primary product thereof.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2014.

     SEC. 7. MAJOR INTEGRATED OIL COMPANIES INELIGIBLE FOR LAST-
                   IN, FIRST-OUT METHOD OF INVENTORY.

       (a) In General.--Section 471 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (c) as 
     subsection (d) and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Major Integrated Oil Companies Ineligible for Last-
     in, First-out Method.--In the case of a major integrated oil 
     company (as defined in section 167(h)(5)(B))--
       ``(1) the last-in, first-out method of determining 
     inventories shall in no event be treated as clearly 
     reflecting income, and
       ``(2) sections 472 and 473 shall not apply.''.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2014.
       (2) Change in method of accounting.--In the case of any 
     taxpayer required by the amendments made by this section to 
     change its method of accounting for its first taxable year 
     beginning after December 31, 2014--
       (A) such change shall be treated as initiated by the 
     taxpayer,
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
       (C) if the net amount of the adjustments required to be 
     taken into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 is positive, such amount shall 
     be taken into account over a period of 8 years beginning with 
     such first taxable year.

  Mr. McNERNEY (during the reading). Madam Speaker, I ask unanimous 
consent to dispense with the reading.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  Mr. CAMP. I object.
  The SPEAKER pro tempore. Objection is heard.
  The Clerk will continue to read.
  Mr. McNERNEY (during the reading). Madam Speaker, once again I ask 
unanimous consent to dispense with the reading.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  Mr. CAMP. I object.
  The SPEAKER pro tempore. Objection is heard.
  The Clerk will continue to read.


                             Point of Order

  Mr. CAMP. Madam Speaker, I insist on my point of order.

[[Page 3171]]

  I make a point of order against the motion because it violates clause 
10 of rule XXI, as it has the net effect of increasing mandatory 
spending within the time period set forth in the rule.
  I ask for a ruling of the Chair.
  The SPEAKER pro tempore. Does any Member wish to be heard on the 
point of order?
  The Chair recognizes the gentleman from California.
  Mr. McNERNEY. Madam Speaker, everyone knows that times are tough and 
that individuals, families, and small businesses are having a difficult 
time making ends meet. That's why it's so important that we provide 
small businesses, which are the backbone of our economy, with the tools 
to succeed.
  The SPEAKER pro tempore. Does the gentleman wish to address the point 
of order?
  Mr. McNERNEY. Yes, the gentleman wishes to address the point of 
order.
  The SPEAKER pro tempore. The Chair will hear the gentleman.
  Mr. McNERNEY. With rising prices of gasoline, and unemployment that 
remains far too high, helping small businesses is more important than 
ever.
  Mr. CAMP. Madam Speaker, the gentleman is not addressing the point of 
order.

                              {time}  1310

  The SPEAKER pro tempore. Does the gentleman from California wish to 
address the specific point of order?
  Does any other Member wish to address the point of order?
  The Chair recognizes the gentleman from Michigan.
  Mr. LEVIN. Madam Speaker, the gentleman from California was 
addressing the point of order. I think he should be allowed to do so.
  The SPEAKER pro tempore. The gentleman from California may be heard 
only on the point of order and may continue if he is speaking directly 
to the point of order.
  Mr. McNERNEY. Madam Speaker, this directly addresses the tax 
provision in the Republican bill.
  The SPEAKER pro tempore. The gentleman from California may proceed.
  Mr. McNERNEY. This motion to recommit addresses the pay-for in the 
bill.
  The SPEAKER pro tempore. The gentleman from California may proceed.
  Mr. McNERNEY. Madam Speaker, I am a former small business owner, and 
while I strongly supported our efforts to reform the health care----
  Mr. CAMP. Madam Speaker, regular order. The gentleman is not 
addressing the point of order.
  The SPEAKER pro tempore. The Chair will hear the gentleman from 
California.
  Mr. LEVIN. I urge the gentleman from Michigan to let him----
  Mr. CAMP. Regular order, Madam Speaker.
  The SPEAKER pro tempore. Members will suspend.
  The Chair recognizes the gentleman from California.
  Mr. McNERNEY. We have a paid-for tax cut that's germane and included 
in the motion to recommit.
  The SPEAKER pro tempore. The gentleman may proceed, but the Chair 
will hear argument from all Members on the point of order only.
  The gentleman from California continues to be recognized.
  Mr. McNERNEY. While I strongly supported our efforts to reform the 
health care system, I also supported repealing the 1099 reporting 
requirement. This requirement will negatively affect small businesses' 
ability to operate smoothly and efficiently. There is a broad 
bipartisan consensus on this point, and I have received many emails, 
phone calls and letters from constituents in my district who oppose the 
1099 reporting requirement.
  I support repealing the 1099 provision----
  The SPEAKER pro tempore. The gentleman will suspend.
  Remarks must be confined to the procedural issue at hand.
  Mr. McNERNEY. We have a paid for tax cut that is in order.
  The SPEAKER pro tempore. Does any other Member wish to be heard on 
the point of order?
  The Chair recognizes the gentleman from Michigan.
  Mr. LEVIN. The gentleman wishes to proceed. The gentleman from 
California wishes to proceed.
  The SPEAKER pro tempore. The gentleman must speak to the specific 
procedural question.
  Mr. LEVIN. And he says he is doing so. He is saying he is doing so.
  The SPEAKER pro tempore. There seems to be some question of that.
  The gentleman from California may proceed.
  Mr. McNERNEY. I stand here to offer a better alternative. It's paid 
for. Instead of simply agreeing to the majority's bill, the motion to 
recommit would repeal the 1099 requirement and provide a new tax cut to 
the middle-class paid for by closing tax loopholes exploited by large 
oil companies. It's paid for and it's germane.
  Oil companies have earned record profits over the last few years, and 
it's just unacceptable for them to take advantage of the special 
loopholes when the middle class is struggling.
  Mr. CAMP. Madam Speaker, the gentleman is not addressing the point of 
order.
  The SPEAKER pro tempore. The gentleman from California has not spoken 
directly to the procedural question of order. The Chair will now 
recognize other Members.
  The Chair recognizes the gentleman from New York.
  Mr. CROWLEY. Thank you for allowing me to address the point of order.
  Madam Speaker, the rules of the House give a modicum of support to 
the minority to offer motions to address a different point of view on 
legislation, albeit in the form of a motion to recommit. The rules of 
the House, Madam Speaker, allow for the minority to express that point 
through the motion.
  In this motion to recommit, as has been placed forward by the 
gentleman from California, it is a simple choice between the oil 
companies and the middle class: Side with the oil companies or side 
with the middle class.
  The SPEAKER pro tempore. The gentleman will suspend. The gentleman is 
not addressing the procedural issues raised by the point of order.
  Mr. CROWLEY. Madam Speaker, if I can, I am addressing the rules of 
the House that allow for the minority to have an opportunity to make a 
motion to recommit. It may not be in agreeance with the majority. We 
understand that. They may not like the motion to recommit. We 
understand that. They may not like the motion to recommit under the 
rule because it touches onto an area that they are not comfortable 
with, that is, taxing oil companies.
  The SPEAKER pro tempore. The gentleman is not addressing the 
procedural issue.
  Mr. CROWLEY. I am addressing the rules of the House, Madam Speaker.
  The SPEAKER pro tempore. The gentleman is not sticking to the precise 
procedural question at hand, which is clause 10 of rule XXI.
  Mr. CAMP. I would ask the Chair to rule, Madam Speaker.
  Mr. LEVIN. Madam Speaker, I wish to be heard.
  The SPEAKER pro tempore. Does any Member in the body wish to be heard 
on the point of order under clause 10 of rule XXI specifically?
  Mr. LEVIN. Yes, I do.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Michigan.
  Mr. LEVIN. Madam Speaker, the rules of the House, as crafted by the 
majority, do make it difficult for us to craft motions to recommit that 
are germane.
  I submit this is, and I think you should listen to us before you make 
a ruling. You are the Speaker of the House, acting in that capacity.
  This motion would cut taxes, would end oil subsidies, and ensure more 
Americans have health insurance. It is germane. The Republicans should 
not try to gag us.
  I urge that the Speaker rule this in order.
  Mr. CAMP. Madam Speaker, I would ask the Chair to rule.
  The SPEAKER pro tempore. The Chair has heard enough and is prepared 
to rule at this time.
  Mr. WEINER. Madam Chair, point of order.

[[Page 3172]]

  The SPEAKER pro tempore. Does the gentleman from York have a point of 
order?
  Mr. WEINER. Madam Speaker, Members should have an opportunity to be 
heard on the point of order. Just because one person you might feel 
didn't address it doesn't mean all of us should be prejudiced in our 
opportunity to speak.
  The SPEAKER pro tempore. Argument is at the discretion of the Chair, 
to edify her judgment.
  The Chair finds that it is time to now rule on the point of order.
  The gentleman from Michigan makes a point of order that the motion 
offered by the gentleman from California violates clause 10 of rule XXI 
by proposing an increase in mandatory spending over a relevant period 
of time.
  Pursuant to clause 10 of rule XXI and clause 4 of rule XXIX, the 
Chair is authoritatively guided by estimates from the chair of the 
Committee on the Budget that the net effect of the provisions in the 
amendment would increase mandatory spending over a relevant period as 
compared to the bill.
  Accordingly, the point of order is sustained and the motion is not in 
order.
  Mr. LEVIN. Madam Speaker, I appeal the ruling of the Chair.
  The SPEAKER pro tempore. The question is, Shall the decision of the 
Chair stand as the judgment of the House?


                            Motion to Table

  Mr. CAMP. Madam Speaker, I move to lay the appeal on the table.
  The SPEAKER pro tempore. The question is on the motion to table.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CAMP. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, this 15-
minute vote on the motion to table will be followed by a 5-minute vote 
on passage of the bill, if arising without further proceedings in 
recommittal.
  The vote was taken by electronic device, and there were--yeas 243, 
nays 181, not voting 8, as follows:

                             [Roll No. 161]

                               YEAS--243

     Adams
     Aderholt
     Akin
     Alexander
     Altmire
     Amash
     Austria
     Bachmann
     Bachus
     Barletta
     Bartlett
     Barton (TX)
     Bass (NH)
     Benishek
     Berg
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Black
     Blackburn
     Bonner
     Bono Mack
     Boren
     Boustany
     Brady (TX)
     Brooks
     Broun (GA)
     Buchanan
     Bucshon
     Buerkle
     Burgess
     Burton (IN)
     Calvert
     Camp
     Campbell
     Canseco
     Cantor
     Capito
     Carter
     Cassidy
     Chabot
     Chaffetz
     Coble
     Coffman (CO)
     Cole
     Conaway
     Cravaack
     Crawford
     Crenshaw
     Cuellar
     Culberson
     Davis (KY)
     Denham
     Dent
     DesJarlais
     Diaz-Balart
     Dold
     Dreier
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers
     Emerson
     Farenthold
     Fincher
     Fitzpatrick
     Flake
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Gardner
     Garrett
     Gerlach
     Gibbs
     Gibson
     Gingrey (GA)
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (MO)
     Griffin (AR)
     Griffith (VA)
     Grimm
     Guinta
     Guthrie
     Hall
     Harper
     Harris
     Hartzler
     Hastings (WA)
     Hayworth
     Heck
     Heller
     Hensarling
     Herger
     Herrera Beutler
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurt
     Issa
     Jenkins
     Johnson (IL)
     Johnson (OH)
     Johnson, Sam
     Jones
     Kelly
     King (IA)
     King (NY)
     Kingston
     Kinzinger (IL)
     Kline
     Labrador
     Lamborn
     Lance
     Landry
     Lankford
     Latham
     LaTourette
     Latta
     Lewis (CA)
     LoBiondo
     Long
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marino
     McCarthy (CA)
     McCaul
     McClintock
     McCotter
     McHenry
     McKeon
     McKinley
     McMorris Rodgers
     Meehan
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mulvaney
     Murphy (PA)
     Myrick
     Neugebauer
     Noem
     Nugent
     Nunes
     Nunnelee
     Olson
     Palazzo
     Paul
     Paulsen
     Pearce
     Pence
     Peterson
     Petri
     Pitts
     Platts
     Poe (TX)
     Pompeo
     Posey
     Price (GA)
     Quayle
     Reed
     Rehberg
     Reichert
     Renacci
     Ribble
     Rigell
     Rivera
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rokita
     Rooney
     Ros-Lehtinen
     Roskam
     Ross (FL)
     Royce
     Runyan
     Ryan (WI)
     Scalise
     Schilling
     Schmidt
     Schock
     Schweikert
     Scott (SC)
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Southerland
     Stearns
     Stivers
     Stutzman
     Sullivan
     Terry
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Turner
     Upton
     Walberg
     Walden
     Walsh (IL)
     Webster
     Weiner
     West
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Womack
     Woodall
     Yoder
     Young (AK)
     Young (FL)
     Young (IN)

                               NAYS--181

     Ackerman
     Andrews
     Baca
     Baldwin
     Barrow
     Bass (CA)
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Braley (IA)
     Brown (FL)
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson (IN)
     Castor (FL)
     Chandler
     Chu
     Cicilline
     Clarke (MI)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly (VA)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Critz
     Crowley
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     DeLauro
     Deutch
     Dicks
     Dingell
     Doggett
     Donnelly (IN)
     Doyle
     Edwards
     Ellison
     Engel
     Eshoo
     Farr
     Fattah
     Filner
     Frank (MA)
     Fudge
     Garamendi
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hanabusa
     Hastings (FL)
     Heinrich
     Higgins
     Himes
     Hinchey
     Hirono
     Holden
     Holt
     Honda
     Inslee
     Israel
     Jackson (IL)
     Jackson Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kaptur
     Keating
     Kildee
     Kind
     Kissell
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Maloney
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNerney
     Meeks
     Michaud
     Miller (NC)
     Miller, George
     Moore
     Moran
     Murphy (CT)
     Nadler
     Napolitano
     Neal
     Olver
     Owens
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Pelosi
     Perlmutter
     Peters
     Pingree (ME)
     Polis
     Price (NC)
     Quigley
     Rahall
     Rangel
     Reyes
     Richardson
     Richmond
     Ross (AR)
     Rothman (NJ)
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Schwartz
     Scott (VA)
     Scott, David
     Serrano
     Sewell
     Sherman
     Shuler
     Sires
     Slaughter
     Smith (WA)
     Stark
     Sutton
     Thompson (CA)
     Thompson (MS)
     Tierney
     Tonko
     Towns
     Tsongas
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watt
     Waxman
     Welch
     Wilson (FL)
     Woolsey
     Wu
     Yarmuth

                             NOT VOTING--8

     Becerra
     Giffords
     Hanna
     Hinojosa
     Hoyer
     Jordan
     Sanchez, Linda T.
     Speier

                              {time}  1343

  Mr. LYNCH, Ms. PINGREE of Maine, Messrs. DeFAZIO, ELLISON, WAXMAN, 
and Ms. BERKLEY changed their vote from ``yea'' to ``nay.''
  Messrs. ALTMIRE, HUIZENGA of Michigan, and MARCHANT changed their 
vote from ``nay'' to ``yea.''
  So the motion to table was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. BECERRA. Madam Speaker, earlier today I was unavoidably detained 
and missed rollcall vote 161. If present, I would have voted ``no'' on 
rollcall vote 161.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. Members should be aware that debate on a 
point of order is solely to edify the judgment of the presiding 
officer. As such, argument on a point of order must be confined to the 
question of order and may not range to an underlying substantive 
question. The Chair endeavors to hear such arguments as may tend to 
edify her judgment, but when she is prepared to rule, she may decline 
to hear more.
  The optimal accommodation of Members' desires to argue on a point of 
order can be achieved only when, first, those seeking recognition for 
that purpose properly confine themselves to the question of order; and, 
second, those who believe they have heard enough leave it to the 
presiding officer to decide when she has heard enough.
  The Chair enlists the understanding and cooperation of all Members in 
these matters.
  The question is on the passage of the bill.

[[Page 3173]]

  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Point of Order

  Mr. WEINER. Madam Speaker, I rise to a point of order.
  The SPEAKER pro tempore. The gentleman will state his point of order.
  Mr. WEINER. Madam Speaker, the voice vote we just took violates 
clause 5(b) of rule XXI, and this vote shall be taken with a three-
fifths required for passage.
  The SPEAKER pro tempore. Does any Member wish to speak to the point 
of order?
  Mr. WEINER. Madam Speaker, I do.
  The SPEAKER pro tempore. The gentleman from New York is recognized to 
speak on the point of order.
  Mr. WEINER. Thank you.
  Madam Speaker, as we all know here, we have a special rule in the 
House. As I just referenced, it is clause 5(b) of rule XXI, which was 
put into the rules of the House to make it extraordinarily difficult 
for us to change tax rates. The reason we did that was out of a 
bipartisan consideration that we wanted to make sure that legislation 
we did here didn't have the effect, under the ruse of some other 
action, of changing effective tax rates for people. So this rule was 
put into place which said, if you're going to do that, you need to have 
a three-fifths majority. This bill that we are considering now is, by 
its action, changing people's effective tax rates.
  I'll try to be brief. It's just that I know many Members hadn't been 
tuned into the debate, and I want to explain this point.
  What the bill would do if it were to be passed would be to say, if 
someone had a marginal increase in their income that took them up into 
the next bracket, they would lose, not only the subsidy provided under 
the health care act to buy insurance, but in its entirety a $200 
increase above the bracket would essentially put them into a different 
tax bracket. This is exactly what this rule was intended to prevent--
our taking an action that unwittingly changes where people's tax rates 
are without our actually having to stand up and do it.
  This rule puts a pretty strong level of test into place for us. It 
says we need a three-fifths majority. It is very difficult for the 
Chair to rule about a three-fifths, A, on a voice vote. Secondly, I 
want to be sure that if we go to what is certainly going to be a 
recorded vote that----
  Mr. TERRY. Objection. The gentleman from New York is not speaking to 
the point of order.
  Mr. WEINER. First of all, I can be accused of a lot of things. Not 
speaking to the point of order isn't one of them.
  Madam Speaker, this point of order is specifically whether or not the 
rule that we have that says that the movement within tax brackets is 
subject to a higher order.
  Let me also make this argument in support of the point of order.
  Mr. TERRY. Objection. The gentleman from New York is not speaking to 
the point of order.
  Mr. WEINER. The gentleman from Nebraska does not control the time.
  Point of order. I am on my feet to a point of order. I cannot be 
taken off my feet by anyone except the Chair. I would urge the respect 
of the gentleman.
  The SPEAKER pro tempore. The Chair will continue to hear the 
gentleman from New York.
  Mr. WEINER. The reason this is so important and that we enforce it 
now is, just as we all have in our rules the annotations of when this 
rule has been bent and broken, we don't want at the beginning of this 
Congress one of the earliest actions we do to be to bend and break and 
leave in shatters the three-fifths requirement.
  You might believe it's a good thing to do. I just think there should 
be at least three-fifths of us, under the rules that we agreed upon, to 
raise the tax bracket, particularly since it's on middle class 
Americans. When you're making 80-some-odd thousand dollars a year and 
you make an extra $200 in income, they want to increase your tax 
bracket. If we're going to do that, let's make sure it's with a three-
fifths majority.
  I urge that the point of order be upheld and that we have to vote on 
this by three-fifths.
  The SPEAKER pro tempore. Does the gentleman from New York (Mr. 
Crowley) wish to be heard on the point of order?
  Mr. CROWLEY. On the point of order, Madam Speaker, specifically, let 
me just clarify for my friends on the other side, and for those on our 
side of the aisle as well--for all Members of the House--that clause 
5(b) of rule XXI states that passage, again, of a tax increase needs a 
three-fifths majority of those present for passage if we are changing 
the tax rates or the brackets of individuals.

                              {time}  1350

  I know it's not, again, comfortable, but as the example I laid out in 
the debate, which was not refuted by anyone, if an individual earning 
$88,000 from a family of four receives a $250 bonus, that would require 
them to pay $4,460 in tax. That is, indeed, a new tax; and, therefore, 
it should be subject to this rule that we would require three-fifths.
  I know it's hard, because that's the difficulty of this in changing 
the tax rates. It should be difficult. That's the rule to make this 
bipartisan. We do this together, a three-fifths vote.
  And, Madam Speaker, we are changing the tax rates. We are changing 
the brackets; and, therefore, this rule ought to be imposed.
  Mr. CAMP. Madam Speaker, I wish to be heard.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Michigan.
  Mr. CAMP. Madam Speaker, I would refer the Members of the House to 
the committee report in this area, and in that committee report it 
states: The committee has carefully reviewed the provisions of the bill 
and states that the provisions of this bill do not involve any Federal 
income tax rate increases within the meaning of the rule.
  I would say that the rules of the House in this area refer to 
specific sections of the Internal Revenue Code. Also, the rules of the 
House--and I would say my friends are not going far enough in their 
reading of the rules--define exactly what an income tax increase is. 
This bill does not amend those specific sections of the Code that are 
referred to in the rules. Accordingly, a point of order does not lie.
  Mr. LEVIN. Madam Speaker, I would like to be heard.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Michigan.
  Mr. LEVIN. I just want to read from the bill:
  ``If the advance payments to a taxpayer exceed the credit allowed by 
this section, the tax imposed by this chapter for the taxable year 
shall be increased.''
  Mr. GOHMERT. Madam Speaker, I wish to be heard on the point of order.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Texas.
  Mr. GOHMERT. Madam Speaker, the point of order began with the words 
``whether or not.'' No point of order can begin with the words 
``whether or not.''
  The SPEAKER pro tempore. The Chair is prepared to rule.
  Mr. WEINER. Madam Speaker, may I be heard further on the gentleman 
from Michigan's point?
  The SPEAKER pro tempore. The Chair recognizes the gentleman from New 
York.
  Mr. WEINER. Let me just say very briefly, the gentleman from Michigan 
is correct. We don't directly do what is described in the rule, but the 
effect is that it is indisputable that someone who is in one tax 
bracket after this bill will move into another one.
  The purpose of this rule, and clearer from the annotations--we're 
trying to look at the purpose of this rule, and the reason we have the 
Speaker interpreting the rule is to prevent that from happening. And if 
it's good for the goose, it's good for the gander.
  You're going to see it happening a lot this term.
  Mr. CROWLEY. Madam Speaker, I would like to be heard.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from New 
York for a brief moment.
  Mr. CROWLEY. Does the committee report get to waive the House rules?

[[Page 3174]]

The committee report? That's the evidence to waive the House rules? 
That's a new low standard.
  The SPEAKER pro tempore. The Chair is prepared to rule.
  Since the 105th Congress, the requirement in clause 5(b) of rule XXI 
for a three-fifths vote on certain tax measures has comprised the three 
elements described by Speaker pro tempore Baldwin in the ruling of 
January 18, 2007.
  The first element of the requirement is that the measure amends one 
of the subsections of the Internal Revenue Code of 1986 that are cited 
in the rule. The second element is that the measure does so by imposing 
a new percentage as a rate of tax. The third element is that in doing 
so the measure increases the amount of tax imposed by any of those 
cited subsections of the Code.
  The Chair is unable to find a provision in the pending bill--H.R. 4, 
as perfected--that fulfills even the first element of the requirement.
  A bill that does not meet any one of the three elements required by 
clause 5(b) of rule XXI does not carry a Federal income tax rate 
increase within the meaning of that rule.
  Accordingly, the Chair holds that a majority vote is sufficient to 
pass the pending bill, and the Chair properly announced a majority-
based result on the voice vote on passage.


                             Recorded Vote

  Mr. CAMP. Madam Speaker, I demand a recorded vote.
  The SPEAKER pro tempore. A recorded vote is requested on passage of 
the bill.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 314, 
noes 112, not voting 6, as follows:

                             [Roll No. 162]

                               AYES--314

     Adams
     Aderholt
     Akin
     Alexander
     Altmire
     Amash
     Andrews
     Austria
     Baca
     Bachmann
     Bachus
     Barletta
     Barrow
     Bartlett
     Barton (TX)
     Bass (NH)
     Benishek
     Berg
     Berkley
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Black
     Blackburn
     Bonner
     Bono Mack
     Boren
     Boswell
     Boustany
     Brady (TX)
     Braley (IA)
     Brooks
     Broun (GA)
     Buchanan
     Bucshon
     Buerkle
     Burgess
     Burton (IN)
     Butterfield
     Calvert
     Camp
     Campbell
     Canseco
     Cantor
     Capito
     Cardoza
     Carnahan
     Carney
     Carter
     Cassidy
     Castor (FL)
     Chabot
     Chaffetz
     Chandler
     Cicilline
     Coble
     Coffman (CO)
     Cohen
     Cole
     Conaway
     Connolly (VA)
     Cooper
     Costa
     Costello
     Courtney
     Cravaack
     Crawford
     Crenshaw
     Critz
     Cuellar
     Culberson
     Davis (CA)
     Davis (KY)
     DeFazio
     Denham
     Dent
     DesJarlais
     Diaz-Balart
     Dold
     Donnelly (IN)
     Dreier
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers
     Emerson
     Farenthold
     Fincher
     Fitzpatrick
     Flake
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Gardner
     Garrett
     Gerlach
     Gibbs
     Gibson
     Gingrey (GA)
     Gohmert
     Gonzalez
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (MO)
     Green, Al
     Green, Gene
     Griffin (AR)
     Griffith (VA)
     Grimm
     Guinta
     Guthrie
     Hall
     Harper
     Harris
     Hartzler
     Hastings (WA)
     Hayworth
     Heck
     Heinrich
     Heller
     Hensarling
     Herger
     Herrera Beutler
     Higgins
     Himes
     Holden
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurt
     Inslee
     Israel
     Issa
     Jenkins
     Johnson (IL)
     Johnson (OH)
     Johnson, Sam
     Jones
     Keating
     Kelly
     King (IA)
     King (NY)
     Kingston
     Kinzinger (IL)
     Kissell
     Kline
     Labrador
     Lamborn
     Lance
     Landry
     Langevin
     Lankford
     Larsen (WA)
     Latham
     LaTourette
     Latta
     Lewis (CA)
     Lipinski
     LoBiondo
     Loebsack
     Long
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Maloney
     Manzullo
     Marchant
     Marino
     Matheson
     McCarthy (CA)
     McCarthy (NY)
     McCaul
     McClintock
     McCotter
     McHenry
     McIntyre
     McKeon
     McKinley
     McMorris Rodgers
     McNerney
     Meehan
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mulvaney
     Murphy (PA)
     Myrick
     Neugebauer
     Noem
     Nugent
     Nunes
     Nunnelee
     Olson
     Owens
     Palazzo
     Pastor (AZ)
     Paul
     Paulsen
     Pearce
     Pence
     Perlmutter
     Peters
     Peterson
     Petri
     Pingree (ME)
     Pitts
     Platts
     Poe (TX)
     Pompeo
     Posey
     Price (GA)
     Price (NC)
     Quayle
     Quigley
     Rahall
     Reed
     Rehberg
     Reichert
     Renacci
     Reyes
     Ribble
     Richardson
     Rigell
     Rivera
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rokita
     Rooney
     Ros-Lehtinen
     Roskam
     Ross (AR)
     Ross (FL)
     Royce
     Runyan
     Ruppersberger
     Ryan (WI)
     Sanchez, Loretta
     Scalise
     Schiff
     Schilling
     Schmidt
     Schock
     Schrader
     Schweikert
     Scott (SC)
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Sewell
     Shimkus
     Shuler
     Shuster
     Simpson
     Sires
     Slaughter
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Southerland
     Stearns
     Stivers
     Stutzman
     Sullivan
     Terry
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Turner
     Upton
     Velazquez
     Visclosky
     Walberg
     Walden
     Walsh (IL)
     Walz (MN)
     Webster
     Welch
     West
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Womack
     Woodall
     Wu
     Yarmuth
     Yoder
     Young (AK)
     Young (FL)
     Young (IN)

                               NOES--112

     Ackerman
     Baldwin
     Bass (CA)
     Becerra
     Berman
     Blumenauer
     Brady (PA)
     Brown (FL)
     Capps
     Capuano
     Carson (IN)
     Chu
     Clarke (MI)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Conyers
     Crowley
     Cummings
     Davis (IL)
     DeGette
     DeLauro
     Deutch
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Ellison
     Engel
     Eshoo
     Farr
     Fattah
     Filner
     Frank (MA)
     Fudge
     Garamendi
     Grijalva
     Gutierrez
     Hanabusa
     Hastings (FL)
     Hinchey
     Hirono
     Holt
     Honda
     Hoyer
     Jackson (IL)
     Jackson Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kaptur
     Kildee
     Kind
     Kucinich
     Larson (CT)
     Lee (CA)
     Levin
     Lewis (GA)
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Markey
     Matsui
     McCollum
     McDermott
     McGovern
     Meeks
     Michaud
     Miller (NC)
     Miller, George
     Moore
     Moran
     Murphy (CT)
     Nadler
     Napolitano
     Neal
     Olver
     Pallone
     Pascrell
     Payne
     Pelosi
     Polis
     Rangel
     Richmond
     Rothman (NJ)
     Roybal-Allard
     Rush
     Ryan (OH)
     Sarbanes
     Schakowsky
     Schwartz
     Scott (VA)
     Serrano
     Sherman
     Stark
     Sutton
     Thompson (CA)
     Thompson (MS)
     Tierney
     Tonko
     Towns
     Tsongas
     Van Hollen
     Wasserman Schultz
     Waters
     Watt
     Waxman
     Weiner
     Wilson (FL)
     Woolsey

                             NOT VOTING--6

     Giffords
     Hanna
     Hinojosa
     Jordan
     Sanchez, Linda T.
     Speier

                              {time}  1412

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

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