[Congressional Record (Bound Edition), Volume 157 (2011), Part 4]
[Senate]
[Pages 5134-5144]
[From the U.S. Government Publishing Office, www.gpo.gov]




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

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will proceed to the consideration of H.R. 4, which the clerk 
will report.
  The assistant legislative clerk read as follows:


[[Page 5135]]

       A bill (H.R. 4) to repeal the expansion of information 
     reporting requirements for payments of $600 or more to 
     corporations, and for other purposes.

  The ACTING PRESIDENT pro tempore. The Senator from New Jersey.


                           Amendment No. 284

  Mr. MENENDEZ. Madam President, I rise to call up amendment No. 284, 
cosponsored by Senators Kerry and Rockefeller, which is at the desk and 
ask for its immediate consideration.
  The ACTING PRESIDENT pro tempore. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New Jersey [Mr. Menendez], for himself, 
     Mr. Kerry, and Mr. Rockefeller, proposes an amendment 
     numbered 284.

  Mr. MENENDEZ. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

  (Purpose: To protect small businesses from health insurance premium 
           increases or losses of health insurance coverage)

       On page 4, after line 3, insert the following:
       (c) Study of the Effects on Small Businesses of Increases 
     in the Amounts of Health Care Credit Overpayments Required to 
     Be Recaptured.--
       (1) In general.--The Secretary of Health and Human Services 
     shall conduct a study to determine if the amendments made by 
     this section--
       (A) will result in an increase in health insurance premiums 
     within the Exchanges created by the Patient Protection and 
     Affordable Care Act for employees or owners of small 
     businesses; or
       (B) will result in an increase in the number of individuals 
     who do not have health insurance coverage, a disproportionate 
     share of which are employees and owners of small businesses.
       (2) Effect of increases.--If the Secretary determines under 
     paragraph (1) that there will be an increase described in 
     subparagraph (A) or (B), or both, then, notwithstanding 
     subsection (b), the amendments made by this section shall not 
     apply to taxable years ending after the date of such 
     determination and the Internal Revenue Code of 1986 shall be 
     applied and administered to such taxable years as if such 
     amendments had never been enacted.

  The ACTING PRESIDENT pro tempore. Under the previous order, there 
will now be 60 minutes of debate equally divided and controlled between 
the two leaders or their designees.
  The Senator from New Jersey.
  Mr. MENENDEZ. Thank you, Madam President. I understand Senator Baucus 
is on his way from a meeting, and in the interim I will start off and 
recognize myself.
  I offer this amendment on behalf of middle-class families and on 
behalf of small businesses. I support repealing the 1099 reporting 
requirement and have, in fact, voted no less than six times on this 
floor to repeal 1099 in this body. However, I strongly believe we must 
do so in a manner that does not increase the burden on our small 
businesses and their employees, and that is exactly what I fear H.R. 4 
does.
  The broad bipartisan support for 1099 repeal comes from the fact that 
it provides relief to small businesses, but the only problem with this 
version of the repeal is that while it provides relief on the one hand, 
it may very well take it away with the other. It repeals the 1099 
reporting requirements but, at the same time, I am concerned it 
increases the health care burden on the very same people to whom we are 
seeking to provide relief.
  Some have argued we have already used this very same offset before. 
We have. Therefore, there is no reason to be concerned now.
  The difference is, however, H.R. 4 is very different than what we did 
4 months ago, and it risks driving up health insurance costs and 
cutting health insurance coverage for small businesses and middle-class 
families. It increases tax penalties--tax penalties. As we approach 
April 15, I know we are all very tax sensitive. It increases tax 
penalties on middle-class families, leaving some with a potential tax 
burden of $10,000 or more.
  How would most middle-class families deal with a tax bill of $10,000 
or more just because their income may have increased $1 above the 
eligibility limit during the year for which they got a subsidy?
  Some have also argued my amendment will block implementation of the 
1099 repeal. That is just factually incorrect. It is an outright 
misstatement of the facts. My amendment simply directs the Secretary of 
Health and Human Services after--emphasize ``after''--the 1099 repeal 
passes into law to study the offset in H.R. 4 and determine its effect 
on small businesses. If the study finds the offset increases health 
care costs or decreases coverage for small businesses, then current law 
on the repayment remains in effect. If the study says, no, it didn't do 
any of those things, then there is no harm.
  Let me be clear. We all want 1099 repeal. My amendment does not in 
any way affect the repeal of 1099. My colleagues can vote for this 
amendment and for H.R. 4 because this would repeal 1099. The only 
potential change my amendment makes would be to the risky offset in the 
underlying amendment, and only if the study finds that it hurts small 
businesses after the repeal has taken place.
  My colleagues on the other side of the aisle are trying to frame this 
debate as either for or against small business, but they are, in my 
mind, both helping and harming them at the same time under H.R. 4. With 
this amendment, we can have not only the ability to help small 
businesses and repeal the 1099 provision, but we can also ensure that 
small businesses and their employees will not get hurt at the end of 
the day.
  For those who may consider opposing my amendment, think of this: On 
the one hand, if you do not believe this offset will hurt small 
businesses and their employees, there is no harm in voting for it 
because you are saying the study will not show an impact and the offset 
will remain in place.
  However, if you believe my amendment would have a revenue score, you 
are assuming that the offset hurts small businesses and their 
employees. Either option would argue for supporting my amendment. 
Either it has no impact, in which case there should be no problem 
supporting it, or it provides protections for small businesses and 
their workers, in which case you should want to support it.
  I realize what I am concerned about is the harmful effect of this 
offset provision won't hit small businesses until 2015, and I know the 
voices for 1099 repeal are much louder than those against the payback 
tax. But I also know this is an issue that we will hear about when our 
constituents get those tax bills at that time, when this provision goes 
into effect and taxpayers get that first big $10,000, or more, surprise 
on their tax bill.
  Do you want to be on the record as having given them the tax bill or 
do you want to be on the record as trying to have saved them from it 
and saved rising costs for small businesses in their health insurance? 
I think you want to be on the side of this amendment and having saved 
them from it.
  In closing, I ask, why in the world--especially during these fragile 
economic times--would we want to do anything that could raise the costs 
on small businesses? That is why my amendment is supported by entities 
such as the Main Street Alliance, a probusiness organization; Families 
USA; the American Cancer Society; Cancer Action Network; Health Care 
for America Now, to mention a few.
  With my amendment, we can protect those who earn a living making our 
Nation's small businesses run and repeal 1099 without delay. To me, 
that is the ultimate show of support for small business.
  Madam President, I urge support of my amendment. I reserve the 
remainder of my time.
  The ACTING PRESIDENT pro tempore. The Senator from Utah is 
recognized.
  Mr. HATCH. Madam President, I am going to defer my remarks until 
after the Senator from Nebraska speaks. I want to defer to this 
wonderful Senator because he has done more than any other person in 
trying to repeal this awful tax provision, this 1099 tax increase 
provision, and he deserves the credit. I want him to lead off in our 
debate. Then I will probably speak after that. I yield for the Senator 
from Nebraska.

[[Page 5136]]

  The ACTING PRESIDENT pro tempore. The Senator from Nebraska is 
recognized.
  Mr. JOHANNS. Madam President, I wish to start today by thanking the 
distinguished Senator from Utah for his courtesy. I appreciate it 
immensely. It has been a bit of a long and tortured process to get here 
today. I appreciate the opportunity to speak first.
  All of us work across our States. In communities such as Kearney and 
Scottsbluff, NE--and I walk those streets often, whether it is in a 
parade or calling on people--I am struck by the number of small 
businesses that fill the storefronts.
  These businesses are the heart and soul of the community. They 
contribute to the Little League, they give high school students their 
first jobs, and they ask ``how are the kids doing'' when you stop in to 
see them. They symbolize what it truly means to be a community. They 
also symbolize the single most powerful job creating force in our 
Nation.
  Sixty-four percent of the new jobs in our Nation are created by small 
businesses as they expand and grow. So when their livelihood is 
threatened by an ill-advised policy, we all in the Senate agree that 
something must be done.
  Shortly after the health care bill was passed, I, like my colleagues, 
began hearing from small business owners who were very concerned about 
a provision that was put into the health care bill on page 737. As the 
number of concerned job creators continued to mount, I knew, and others 
in the Senate knew, we had to do something about it.
  Passing 1099 repeal exemplifies why I came to the Senate--taking an 
issue that is important to our State and our country and literally 
building support in this body to do the right thing.
  I won't deny there have been some frustrations along the way. I 
certainly didn't expect to have to present the legislation seven times 
to get to the finish line. But it has been well worth the effort. I 
could not be more pleased by the bipartisan support that has built this 
effort.
  Today presents an opportunity for Members of both parties to unite 
behind doing the right thing for our job creators.
  If we pass H.R. 4 and send it on to the President's desk today, it 
won't be a victory for Republicans or Democrats. I certainly won't 
report it that way. It is not going to be a victory for a single 
Senator. It will be a victory for millions of small business owners who 
have been begging us to do something about this provision for a long 
time now, and it will be a victory for common sense.
  That is why today is such an important day in the Senate. In a few 
short minutes, we will have an opportunity to put to an end the looming 
1099 paperwork mandate once and for all. Small businesses in my State 
and all across the country are depending upon us today to act.
  One real-life example came from a Nebraska company called Hayneedle. 
It is an online retailer of home furnishings and other home products. 
With the new 1099 requirement, Hayneedle estimates that the annual cost 
of compliance is literally going to exceed $100,000 for them--$100,000. 
That would go a long way to hiring more people.
  Adding insult to injury, the 1099 reporting requirement creates a 
perverse incentive to consolidate suppliers. Fewer suppliers means less 
1099 paperwork. This leaves Main Street small suppliers--those 
businesses I was talking about--out in the cold as big suppliers win 
more and more business.
  Dale Black, a Kentucky Fried Chicken franchise owner from Grand 
Island, told me:

     . . . want to be a good corporate citizen in the communities 
     I have restaurants, but the 1099 forces me not to hire local 
     venders and tradesmen in my community, instead giving work to 
     a single regional contractor.

  With 40 million businesses, nonprofits, churches, and local 
governments bracing for the 1099 avalanche of paperwork, every Senator 
could come to the floor today and tell similar stories.
  With all these Main Street businesses and their workers hanging in 
the balance, there is just one clear choice for our businesses: We must 
advance the House-passed version and, in all due respect to my 
colleague from New Jersey, reject the Menendez alternative, the 
Menendez amendment.
  You see, only the House-passed version will quickly reach the 
President's desk and provide immediate relief to our job creators. 
Adding anything on, passing anything else will cause our job creators 
to wait on the sidelines yet again, because then, of course, we will 
have different versions--the House version and the Senate version--and 
I fear we will go off into never-never land. But you see, time has run 
out on our job creators.
  When this debate began, the mandate seemed a long way away. It was 
out there on the horizon. We had a long time to work through these 
issues. But now 8 months has passed. We voted over and over again, and 
we never could quite get to the finish line.
  It is decision time for businesses. They are feeling the pressure to 
set up the accounting systems they will need to comply with this 
tangled mess of tax forms that even the IRS doesn't support.
  This mandate forces many to set aside money for software that could 
instead be spent on those new workers, and that is why it is so 
important that the Senate pass the House bill today.
  Put simply, a vote for the House bill is a vote to actually solve the 
problem. Again, in all due respect to my colleague from New Jersey, the 
amendment tells our small businesses that they will have to wait 
longer. Our path actually gives our job creators some certainty they 
need to grow their businesses. But the other path, as I said, is a 
guaranteed sidetrack back into never-never land.
  While one approach tells small businesses we are with them, the other 
says we are going to continue to work through this and wrangle back and 
forth, instead of enacting a bipartisan solution today.
  The House of Representatives has already led by example. It is 
important to recognize that. They passed their 1099 repeal on March 3--
more than a month ago--and it got great bipartisan support--314 to 112, 
and 76 Democrats voted for that repeal.
  Not only does this legislation pay for the repeal of the 1099 
mandate, it actually reduces the deficit by $166 million over the next 
10 years.
  It requires repayment of improper health exchange subsidies--a 
concept the Senate passed unanimously in December to pay for the doc 
fix legislation.
  If we fail to pass the House version today, well, the job creators 
are being told that they have to divert more of their resources to 
managing unnecessary paperwork.
  Let's not vote for another alternative that is going to stall this 
out again. Let's cast a vote today that sends a clear message. Let's 
defeat the pending Menendez amendment, and then let's pass the bill so 
we can get it to the President and get it signed. I am hoping this gets 
strong bipartisan support. I want to say again that the victory today 
is not for either party or for a single Senator; it is for the job 
creators who are depending upon our action today.
  The PRESIDING OFFICER (Mr. Tester). The Senator from Montana.
  Mr. BAUCUS. Mr. President, my colleague from New Jersey proposed what 
I think is a very reasonable amendment to the revenue provision of the 
repeal of this 1099 provision. I plan to support that. It is a good 
amendment.
  One of the key provisions in the Affordable Care Act is the tax 
credit that will be available to millions of low- and middle-income 
Americans to purchase health insurance if their employer doesn't make 
coverage available. That is a credit. It goes to middle- and low-income 
Americans. The provision that will pay for 1099 repeal will increase 
the amount that many Americans will have to pay at the end of the year 
if they receive a credit to purchase their health insurance and their 
income ends up being higher than the income on which their credit was 
based.
  I share Senator Menendez's concern that this will cause an undue 
burden.

[[Page 5137]]

 This could increase premiums that people pay under health insurance, 
or reduce the benefits of their health insurance coverage, especially 
in the small business community, and he believes his amendment would 
reverse the provision--and it does in fact do that--if the HHS 
Secretary determines it will increase premiums or if it will reduce 
coverage, that is on health insurance coverage for small businesses.
  The 1099 repeal is all about small businesses. That is primarily why 
we are going to repeal 1099. We don't want to turn around and hurt 
small businesses in the same bill. There is a real possibility that 
that would happen with a straight repeal, without the Menendez 
perfecting amendment.
  I urge my colleagues to join me in supporting the Menendez amendment. 
In effect, that amendment would repeal 1099, which virtually every 
Member of the body wants to do, but also will make sure the 
consequences do not hurt small businesses, which will otherwise find 
their premiums increased or their coverage diminished.
  Senator Menendez very wisely anticipates that potential problem with 
his amendment by essentially providing that the increase would not 
occur as a premium--that is, the 1099 repeal would not occur if the HHS 
Secretary determines that it will increase premiums or also reduce 
coverage for small businesses. I urge my colleagues to support the 
Menendez amendment.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, today we will vote on the Menendez 
amendment and then on Senator Johanns' amendment to repeal the 1099 tax 
increase provisions of the health spending law and the small business 
law. As you know, the health spending law was enacted a little over a 
year ago, and we are already here trying to undo some of the damage 
that this massive law has imposed on small businesses. We have heard 
from small business owner after small business owner who was shocked 
and frustrated to learn the 1099 provision in the health spending law 
would require small businesses to send out a much larger number of IRS 
Form 1099s.
  This provision was a counterproductive assault on businesses, and it 
was unleashed for one reason: to provide the dollars to pay for 
ObamaCare's $2.6 trillion in new spending; in other words, to try and 
back up that spending.
  Just to be clear, this is what this provision requires: Starting on 
January 1, 2012, if a business pays at least $600 in total in 1 year to 
a single payee, that business must send an IRS Form 1099 to the IRS as 
well as to that payee. Since businesses frequently pay at least $600 in 
1 year to all kinds of different payees, this means the health spending 
law has created an enormous paperwork burden on our businesses, 
including many small businesses. This is exactly the kind of burden 
small businesses do not need to face at this time, when we are still 
facing unemployment at 8.8 percent, and small businesses create 70 
percent of new jobs in this country.
  The National Federation of Independent Business, whose membership is 
made up of small businesses, hit the nail on the head in its April 4, 
2011, letter about this provision. This is what they had to say:

       We are writing to urge you to support H.R. 4, the 
     Comprehensive 1099 Taxpayer Protection repayment of Exchange 
     Subsidy Overpayments Act of 2011, and to oppose the Menendez 
     amendment. Passing H.R. 4 without any amendments is the best 
     way to finally repeal the expanded Form 1099 requirements 
     included in the Patient Protection and Affordable Care Act. 
     Tax paperwork and compliance are already major expenses for 
     small businesses, and the new reporting requirements included 
     in PPACA will substantially increase these costs.

  The new paperwork mandate will require businesses to track and report 
to the IRS most business-to-business transactions above $600 in a 
calendar year. For many businesses this could amount to hundreds of new 
reportable transactions, which involves sending a 1099 to both the IRS 
and the reportable business.
  That is a pretty strong statement, and the message is clear. This 
provision will impose considerable hardship on American businesses. The 
result of this provision will be much more paperwork and much less job 
creation. I spoke this morning to the Tax Executives Institute, which 
is one of the most prestigious institutes in our country, especially on 
taxes. What I announced to them was that I think we are going to get 
rid of this provision, and I almost got a standing ovation. They went 
wild down there this morning.
  This provision will impose considerable hardship on American 
businesses, especially small businesses. The result of this provision 
will be much more paperwork but a lot less job creation.
  In addition, Monday, April 4, 2011, the U.S. Chamber of Commerce 
weighed in on this provision with a similar diagnosis. This is how the 
chamber put it:

       The 1099 reporting mandate, if not repealed, will force 
     more than 40 million entities, including governments, 
     nonprofits, and small and large businesses, to comply with 
     onerous data collection and IRS information filing burdens on 
     virtually all non-credit card purchases totaling $600 or more 
     with any vendor in a tax year. At a time when they can least 
     afford it, entities will have to institute new, complex 
     recordkeeping, data collection, and reporting requirements to 
     track every purchase by vendor and payment method. This 
     provision will dramatically increase accounting costs and 
     could expose businesses to costly and unjustified audits by 
     the IRS. The Chamber strongly supports H.R. 4, which would 
     repeal the 1099 mandate, and strongly opposes the Menendez 
     amendment.

  Mr. President, I ask unanimous consent to have printed in the Record 
the letters from both the NFIB, the representative of small businesses 
in this country, and the Chamber of Congress.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                               Chamber of Commerce


                              of the United States of America,

                                    Washington, DC, April 4, 2011.
       To the Members of the United States Senate: The U.S. 
     Chamber of Commerce, the world's largest business federation 
     representing the interests of more than three million 
     businesses and organizations of every size, sector, and 
     region, strongly supports H.R. 4, the ``Comprehensive 1099 
     Taxpayer Protection and Repayment of Exchange Subsidy 
     Overpayments Act of 2011'' and strongly opposes an amendment 
     by Sen. Menendez, which could leave intact the 1099 
     requirement.
       The 1099 reporting mandate, if not repealed, will force 
     more than 40 million entities, including governments, 
     nonprofits, and small and large businesses, to comply with 
     onerous data collection and IRS information filing burdens on 
     virtually all noncredit card purchases totaling $600 or more 
     with any vendor in a tax year. At a time when they can least 
     afford it, entities will have to institute new complex 
     record-keeping, data collection and reporting requirements to 
     track every purchase by vendor and payment method. This 
     provision will dramatically increase accounting costs and 
     could expose businesses to costly and unjustified audits by 
     the IRS.
       The Chamber strongly supports H.R. 4, which would repeal 
     the 1099 mandate, and strongly opposes the Menendez 
     amendment. The Chamber may consider including votes on, or in 
     relation to, these issues in our annual How They Voted 
     scorecard.
           Sincerely,

                                              R. Bruce Josten,

                                         Executive Vice President,
     Government Affairs.
                                  ____

                                                    April 4, 2011.
       Dear Senator: On behalf of the undersigned organizations, 
     we are writing to urge you to support H.R. 4, the 
     ``Comprehensive 1099 Taxpayer Protection and Repayment of 
     Exchange Subsidy Overpayments Act of 2011,'' and to oppose 
     the Menendez Amendment. Passing H.R. 4, without any 
     amendments, is the best way to finally repeal the expanded 
     Form 1099 requirements included in the Patient Protection and 
     Affordable Care Act (PPACA).
       Tax paperwork and compliance are already major expenses for 
     small businesses and the new reporting requirements included 
     in PPACA will substantially increase these costs. The new 
     paperwork mandate will require businesses to track and report 
     to the IRS most business-to-business transactions above $600 
     in a calendar year. For many businesses, this could amount to 
     hundreds of new reportable transactions, which involves 
     sending a 1099 to both the IRS and the reportable business.
       According to an SBA study, the cost of complying with the 
     tax code is 66 percent higher for small business as compared 
     to a large business. Small businesses lack the compliance 
     capabilities to track and report each new transaction, and in 
     order to comply with this new requirement they will have to 
     pull capital out of the business that could be better used to 
     reinvest in the business and create jobs.

[[Page 5138]]

       Passage of H.R. 4, without amendments, is the best way to 
     remove the costly impact the 1099 requirement would have on 
     millions of businesses.
           Sincerely,
         Aeronautical Repair Station Association; Agricultural 
           Retailers Association; Air Conditioning Contractors of 
           America; Alabama Nursery & Landscape Association; 
           Alliance for Affordable Services; Alliance of 
           Independent Store Owners and Professionals; American 
           Association for Laboratory Accreditation; American 
           Bakers Association; American Council of Engineering 
           Companies; American Council of Independent 
           Laboratories; American Farm Bureau Federation; American 
           Foundry Society; American Hotel & Lodging Association; 
           American Institute of Architects; American Nursery & 
           Landscape Association; American Petroleum Institute; 
           American Rental Association; American Road & 
           Transportation Builders Association; American Society 
           of Interior Designers; American Subcontractors 
           Association, Inc.; American Supply Association; 
           American Veterinary Distributors Association.
         American Veterinary Medical Association; AMT--The 
           Association For Manufacturing Technology; Arizona 
           Nursery Association; Associated Builders and 
           Contractors; Associated Equipment Distributors; 
           Associated General Contractors of America; Associated 
           Landscape Contractors of Colorado; Association of Free 
           Community Papers; Association of Ship Brokers & Agents; 
           Association of Small Business Development Centers; 
           Automotive Aftermarket Industry Association; Automotive 
           Recyclers Association; Bowling Proprietors Association 
           of America; California Association of Nurseries and 
           Garden Centers; California Landscape Contractors 
           Association; Commercial Photographers International; 
           Community Papers of Florida; Community Papers of 
           Michigan; Community Papers of Ohio and West Virginia; 
           Connecticut Nursery & Landscape Association; Direct 
           Selling Association; Door and Hardware Institute.
         Electronic Security Association; Electronics 
           Representatives Association (ERA); Florida Nursery, 
           Growers & Landscape Association; Free Community Papers 
           of New York; Georgia Green Industry Association; 
           Healthcare Distribution Management Association; Hearth, 
           Patio & Barbecue Association; Idaho Nursery & Landscape 
           Association; Illinois Green Industry Association; 
           Illinois Landscape Contractors Association (ILCA); 
           Independent Community Bankers of America; Independent 
           Electrical Contractors, Inc.; Independent Office 
           Products & Furniture Dealers Association; Indiana 
           Nursery and Landscape Association; Industrial Supply 
           Association; Industry Council for Tangible Assets; 
           International Association of Refrigerated Warehouses; 
           International Foodservice Distributors Association; 
           International Franchise Association; International 
           Housewares Association; International Sleep Products 
           Association; Kentucky Nursery and Landscape 
           Association.
         Louisiana Nursery and Landscape Association; Maine 
           Landscape and Nursery Association; Manufacturers' 
           Agents Association for the Foodservice Industry; 
           Manufacturers' Agents National Association; 
           Manufacturing Jewelers and Suppliers of America; 
           Maryland Nursery and Landscape Association; 
           Massachusetts Nursery & Landscape Association, Inc.; 
           Michigan Nursery and Landscape Association; Mid-
           Atlantic Community Papers Association; Midwest Free 
           Community Papers; Minnesota Nursery & Landscape 
           Association; Motor & Equipment Manufacturers 
           Association; NAMM, National Association of Music 
           Merchants; National Apartment Association; National 
           Association for Printing Leadership'; National 
           Association for the Self-Employed; National Association 
           of Home Builders; National Association of 
           Manufacturers; National Association of Mortgage 
           Brokers; National Association of Mutual Insurance 
           Companies; National Association of RV Parks & 
           Campgrounds; National Association of Theatre Owners; 
           National Association of Wholesaler-Distributors.
         National Christmas Tree Association; National Club 
           Association; National Community Pharmacists 
           Association; National Council of Chain Restaurants; 
           National Council of Farmer Cooperatives; National 
           Electrical Contractors Association; National Electrical 
           Manufacturers Representatives Association; National 
           Federation of Independent Business; National Home 
           Furnishings Association; National Lumber and Building 
           Material Dealers Association; National Multi Housing 
           Council; National Newspaper Association; National 
           Office Products Alliance; National Restaurant 
           Association; National Retail Federation; National 
           Roofing Contractors Association; National Small 
           Business Association; National Tooling and Machining 
           Association; National Utility Contractors Association; 
           Nationwide Insurance Independent Contractors 
           Association; Nebraska Nursery and Landscape 
           Association; New Mexico Family Business Alliance; New 
           Mexico Nursery & Landscape Association.
         New York State Nursery and Landscape Association; North 
           American Die Casting Association; North Carolina Green 
           Industry Council; North Carolina Nursery and Landscape 
           Association; Northeastern Retail Lumber Association; 
           NPES The Association for Suppliers of Printing, 
           Publishing & Converting Technologies; OFA--An 
           Association of Floriculture Professionals; Office 
           Furniture Dealers Alliance; Ohio Nursery and Landscape 
           Association; Oregon Association of Nurseries; Outdoor 
           Power Equipment Institute; Pennsylvania Landscape and 
           Nursery Association; Pet Industry Distributors 
           Association; Petroleum Marketers Association of 
           America; Plumbing-Heating-Cooling Contractors 
           Association; Precision Machined Products Association; 
           Precision Metalforming Association; Printing Industries 
           of America; Professional Golfers Association of 
           America; Professional Landscape Network; Professional 
           Photographers of America; Promotional Products 
           Association International.
         S Corp Association; Safety Equipment Distributors 
           Association; Saturation Mailers Coalition; SBE Council; 
           Secondary Materials and Recycled Textiles Association; 
           Self-Insurance Institute of America (SIIA); Service 
           Station Dealers of America and Allied Trades; SIGMA, 
           the Society for Independent Gasoline Marketers of 
           America; Small Business Council of America; Small 
           Business Legislative Council; SMC Business Councils; 
           Society of American Florists; Society of Independent 
           Gasoline Marketers of America; Society of Sport & Event 
           Photographers; South Carolina Nursery & Landscape 
           Association; Southeastern Advertising Publishers 
           Association; Specialty Equipment Market Association; 
           Specialty Tools & Fasteners Distributors Association; 
           SPI: The Plastics Industry Trade Association; Stock 
           Artists Alliance; TechServe Alliance; Tennessee Nursery 
           & Landscape Association.
         Texas Community Newspaper Association; Texas Nursery & 
           Landscape Association; Textile Care Allied Trades 
           Association; Textile Rental Services Association of 
           America; Tire Industry Association; Toy Industry 
           Association, Inc.; Turfgrass Producers International; 
           U.S. Black Chamber Inc.; U.S. Chamber of Commerce; Utah 
           Nursery & Landscape Association; Virginia Christmas 
           Tree Growers Association; Virginia Green Industry 
           Council; Virginia Nursery & Landscape Association; 
           Washington State Nursery & Landscape Association; 
           Western Growers Association; Window and Door 
           Manufacturers Association; Wisconsin Community Papers; 
           Women Construction Owners & Executives; Women Impacting 
           Public Policy; Wood Machinery Manufacturers of America.

  Mr. HATCH. Mr. President, President Obama and congressional Democrats 
tried to sell the American people on their clunker of a health care law 
by saying it would bring down Federal health care spending. That would 
have been a miracle if it were true. But even the Obama 
administration's own actuary at the Centers for Medicare and Medicaid 
Services has confirmed that claim was false and that Federal spending 
on health care would actually increase as the result of the health 
spending law. Some estimate as much as $2,100 per policy.
  The Cash for Clunkers Program was bad enough, but Democrats managed 
to outdo themselves spending $2.6 trillion in cash for this clunker of 
a health care law. This reminds me of a scene from the movie 
``Vacation.'' At the beginning of that film, Clark Griswold goes into a 
dealership to buy a new car before setting off with his family for a 
cross-country trip to Wally World. Yet instead of getting the new car 
he had ordered as part of a trade-in, the dealer gave him a pea green 
Family Truckster, as we can see in this beautiful photograph. Chevy 
Chase was, of course, Griswold. One only had to look at the Family 
Truckster to know that it was a lemon.
  Clark told the dealer he wanted his old car back. Unfortunately for 
Clark--or the actor, in this case--his old car was crushed before he 
could get it

[[Page 5139]]

back. You can imagine the consternation Chevy Chase faced. You can see 
the Family Truckster in this picture behind me. There it is, with Chevy 
standing on top as Clark Griswold.
  Clark's experience with the Family Truckster is a metaphor for 
Americans' experience with ObamaCare. Our Nation's health care system 
might have needed some work--there is no question about that--but the 
vast majority of Americans were satisfied with their health care. Yet 
Democrats gave Americans ObamaCare which, like the Family Truckster, is 
a true jalopy, and they did their best to crush our former health care 
system before we could stop them.
  I also add that Americans, such as Clark Griswold, eventually reached 
their wits' end. The tea party, the gubernatorial elections in New 
Jersey and Virginia, the election of my colleague, the junior Senator 
from Massachusetts--all of these actions were the result of Americans 
standing up and letting it be known that they were sick and tired of 
Washington recklessly spending their money and recklessly regulating, 
and they were not going to take it anymore.
  To borrow from Robert Daltrey, Americans made it clear that they are 
not going to get fooled again, but that did not stop the Democrats from 
trying.
  At the time the health spending bill was being enacted, President 
Obama and congressional Democrats were raising taxes to make it appear 
they were partially paying for the $2.6 trillion in new spending 
contained in the partisan health spending law. When the Democrats say 
this health law saved money, ask yourself this: If the law was actually 
going to reduce Federal spending on health care, would these massive 
tax increases have been necessary?
  In the end, ObamaCare was more of the same--a tax-and-spend law that 
vastly increased the size of an already-bloated Federal Government.
  President Obama and congressional Democrats should not have raised 
taxes and cut Medicare to fund a new entitlement program--an 
unsustainable entitlement program. After all, the three largest 
entitlement programs--Social Security, Medicare, and Medicaid--are 
already headed for a fiscal crisis. To create a fourth massive 
entitlement program when these three entitlement programs were already 
going broke was fiscal insanity. That is one reason we need to repeal 
the health spending bill in its entirety and start over.
  Senator Johanns' amendment to repeal the 1099 provisions in the 
health spending law and small business law is a good first step in 
getting rid of the partisan health spending bill entirely.
  I think a lot of people, including Members of Congress who voted for 
the small business bill last year, were surprised to learn that 
Congress enacted a second 1099 provision last year. This is separate 
and apart from the 1099 provision enacted in the partisan health 
spending law. This new 1099 provision was enacted as part of the small 
business law last year. I voted against it. By the way, this provision 
is already in effect since it applies to payments made on or after 
January 1 of this year.
  This 1099 provision causes landlords who are not even actively 
engaged in the rental real estate business to send in a Form 1099 to 
the IRS. It is required when they pay more than $600 in 1 year to a 
vendor for goods or services. For example, suppose a landlord spends 
more than $600 over the course of a year at a home improvement store. 
That landlord must send out a Form 1099 and send it to the IRS, as well 
as the provider of goods or services. In addition, that landlord must 
track down the vendor's taxpayer identification number, which is not 
necessarily an easy task to do.
  This law creates a large and unexpected paperwork burden on these 
landlords. With the real estate market struggling, we should not impose 
new paperwork burdens on landlords which only hurt the real estate 
industry even more.
  I urge my colleagues to vote yes on the Senator Johanns' amendment 
and vote no on the Menendez amendment. As I said, Senator Johanns' 
amendment is a downpayment on a total repeal of the onerous health care 
law that over time will wreck our Nation's health care system and lead 
to an explosion of new Federal spending.
  I ask my colleagues to vote no on Senator Menendez's amendment.
  I personally wish to pay tribute to my colleague from Nebraska for 
his indefatigable efforts in trying to repeal these terrible paperwork 
burdens that nobody is going to look at anyway, that really are not 
going to make any difference and are just going to cost an arm and a 
leg over time. I thank him for the hard work he has done. He deserves 
credit for continuing to fight these battles.
  I hope all of us on the Senate floor will get rid of this monstrosity 
today and hopefully work together to try and straighten out what is a 
very bad bill in ObamaCare.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, how much time is remaining on each side?
  The PRESIDING OFFICER. The majority controls 19\1/2\ minutes; the 
minority controls 8 minutes.
  Mr. BAUCUS. Mr. President, I first wish to correct the record. I 
stated earlier that if the Menendez provision is triggered, the 1099 
repeal will not go into effect. That is not correct. What I meant to 
say is if the Menendez provision is triggered, then the new true-up 
rules in H.R. 4 will not go into effect. That is an important 
distinction. No matter what the result, 1099 will, in fact, be 
repealed. That is the main point.
  I commend all Senators, including Senator Johanns and others, who 
want to repeal 1099. It is very much the view of this body--I, myself, 
want to repeal 1099, but I also think the provision offered by Senator 
Menendez is an improvement on repeal, even though repeal will actually 
go into effect.
  I will also say that there are a lot of statistics bandied about 
regarding health care reform. The Fidelity company does an analysis of 
how much it costs people age 65 and older to pay for their health care. 
That is their premium cost as well as their insurance costs or out-of-
pocket costs. Fidelity company has just concluded in the last week or 
so that as a consequence of health care reform, the number of dollars 
that seniors will have to pay for health care will actually be lower--
not higher, but lower--than what it otherwise would be on account of 
passage of that bill.


                            Budget Proposal

  I want to say a couple words about the budget proposal offered by the 
House, the Ryan budget proposal. It is important for people to know 
what is in that budget. What is in it basically? Let me tell you. That 
budget cuts $2.2 trillion in health care costs over 10 years--$2.2 
trillion in cuts in health care costs over 2 years. It repeals health 
care reform. That is what the Ryan resolution does. His budget 
resolution repeals health care reform.
  What else does it do? It dismantles Medicare. It dismantles Medicare 
as we know it. Health care reform extends the life of the Medicare 
trust fund by another 12 years. The Ryan House Republican budget 
proposal repeals Medicare as we know it. It turns into a voucher 
program. Basically, it says this: There have been reports that it costs 
about $15,000 to pay for seniors under Medicare for 1 year. There are 
reports that the Ryan proposal says we are just going to give people 
$6,000 and give it to a health insurance company. First, that is a big 
cut, 15 down to 6 and, second, it is to a health insurance company. So 
the net effect of the Ryan proposal is very simple. It transfers wealth 
from seniors, from children--because of Medicaid and people in nursing 
homes--it transfers wealth from them to whom? Health insurance 
companies. The Medicare proposal is a transfer of wealth from seniors 
to health insurance companies.
  Health care reform did the opposite. We extended the life of 
Medicare. How did we do it? In part, by cutting health insurance 
payments. So we helped seniors in health care reform and we cut health 
insurance companies. The Ryan House Republican budget proposal does

[[Page 5140]]

the opposite; it cuts benefits to seniors by a whopping amount and it 
takes that wealth and transfers it over to health insurance companies 
that will get higher premiums, higher bonus payments, their stock 
returns will go up, and their administrative expenses will go up. I 
don't think that is what we want to do. But make no mistake, that is 
the effect of the Ryan proposal.
  Also, I might say, it reduces income taxes by about $1.2 trillion. So 
the real net of the effect of the Ryan proposal is, take money away 
from people and give it to the health insurance companies and the 
wealthy. That is what the Ryan proposal does. That is exactly what it 
does. The Ryan proposal takes money, about $5.8 trillion roughly, over 
10 years--takes it away from people, especially seniors and kids on 
Medicaid, elderly who happen to be on Medicaid--there are big 
reductions further in discretionary spending--and lowers income taxes 
by about $1.2 trillion. It lowers them. That is how it achieves budget 
savings of $5.8 trillion. He cuts, cuts to the bone, and then cuts 
about $1.2 trillion more than he has to because $1.2 trillion is 
reductions in income tax.
  I want the public to know what is in the Ryan budget. That is what it 
is. Let me say it one more time, clearly, simply. It is a transfer of 
money away from seniors and from kids on Medicaid and elderly on 
Medicaid over to health insurance companies--higher bonuses, higher 
salaries, stock goes up, and in addition it transfers money away from 
people to pay for tax cuts for the wealthy--not tax cuts for the 
unwealthy but tax cuts for the wealthy.
  How did he do that? He lowers the top rate to 25 percent so the 
wealthy pay less taxes. He lowers the corporate down to 25 percent, so 
the bigger companies pay less taxes. That is how he does it. While we 
are talking about a short-term CR around here, and we are talking about 
a longer term CR around here, when we start talking about budgets, 
let's look closely at what is actually in that Ryan proposal.
  Of course, we have to lower our budget deficits. Of course, we have 
to significantly lower our budget deficits. But, of course, we have to 
do it fairly, so all Americans are part of the solution, so health 
insurance companies are also part of the solution, so the most wealthy 
are also part of the solution. All Americans have to be part of the 
solution. The Ryan budget does not do that. It says only the seniors--
we get the budget deficit reduction on the backs of seniors, on the 
backs of people who otherwise receive medical care under Medicaid and 
some other things, but also we shift income to the most wealthy by 
lowering their taxes.
  I hope when we are voting on the Menendez amendment, which is 
important to do, also in the background we understand what is going on 
in the other body. They may bring this up and try to pass it this week. 
They may try to pass it on the floor next week--I don't know. But we 
should recognize it for what it is and come up with a deficit reduction 
proposal that is fair, fair to all Americans, not on the backs of the 
seniors for the benefit of health insurance and not on the backs of 
average Americans for the benefit of the most wealthy, by lowering 
their income taxes by $1.2 trillion over 10 years. That is not fair.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, we are headed toward $20 trillion in 
spending. The President's program, the Democrat's program, is maybe 
one-half of 1 percent, which is almost nothing. This is their program, 
a blank sheet of paper. That is what it is. At least Congressman Ryan, 
the Budget Committee chairman over in the House, is trying to do 
something that is worthwhile. By the way, just so everybody knows, the 
rich are not going to be treated tremendously respectfully in this 
matter. They are going to lose, on the top level, on entitlement 
programs. There is a cutback for those who reach a certain level of 
income. This is not as simple as it sounds, nor is it a desire to take 
anything away from senior citizens. It is trying to get our country's 
budget under control and it is out of control.
  Mr. President, I yield up to 5 minutes to the distinguished Senator 
from Maine, if I can.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. Mr. President, I rise in support of H.R. 4, to repeal the 
mandate on small businesses throughout this country. The failure to 
repeal this onerous mandate of the 1099 requirement would have a 
profound impact on millions of businesses across this country and on 
the already stressed job market, as employers have to grapple with the 
enormity of this cost, not to mention the compliance with this 
regulation.
  I certainly commend the author of this legislation, the Senator from 
Nebraska, Mr. Johanns, for his tenacity, his perseverance, his 
relentlessness in bringing this to the forefront not only of the Senate 
but to the Congress and to the country. I hope we can join with our 
counterparts in the House of Representatives in an impressive, 
bipartisan vote because we do need to bring this to a conclusion.
  I also appreciate that the Senator from Nebraska included in this 
repeal the provision I recommended, which was to repeal the provision 
that the mandate would be extended to rental property owners. This was 
a requirement that was included in the Small Business Jobs Tax Relief 
Act that became law last fall--inexplicably, given the fact that the 
1099 quagmire was already well known to everyone. Yet it was included 
in that legislation that became law--so those who are rental property 
owners will have to comply with this mandate as well. The big 
difference is, this requirement takes effect in January of this year so 
unsuspecting owners will already be subject to the burden of reporting 
to the Internal Revenue Service any business expenditures for goods and 
services that exceed $600 per vendor, similar to all the other 
requirements under the law that will begin for 2012 for all small 
business owners.
  As we all know, this new mandate on small businesses was imposed in 
the health care reform law. Yet it had nothing to do with reforming the 
health insurance industry. It had everything to do with raising 
revenues and placing inordinate burdens on small businesses. The rental 
real estate was added to this paperwork morass, and what is 
disconcerting is the fact that it directly affects those States that 
depend on tourism, such as my State of Maine, with respect to rental 
property.
  I think it is going to be very important to make sure people 
understand this requirement will be repealed as part of this 
legislation. Failure to repeal this mandate will raise the compliance 
costs for small businesses astronomically. Already, as estimated by the 
NFIB, the major voice for small businesses in this country--they have 
estimated that small business compliance costs with respect to tax 
compliance alone is $74 an hour. Tax compliance is the most expensive 
form of paperwork. So the burden on small businesses will be strenuous 
and inordinate. It is already disproportionate. Their costs are 67 
percent higher than larger firms.
  There is no question, given the ubiquitous nature of this 
requirement, that small businesses all across this country will come 
under the weight of these very stringent regulations, having to submit 
1099 forms. In fact, I was talking to an individual the other day who 
heads up an organization which has 1,650 members and what did he say? 
He said every one of these members will have to file anywhere from 200 
to 600 forms every day. That is 200 to 600 forms on a daily basis.
  They didn't want to talk about taxes. They didn't want to talk about 
anything else. They wanted to talk about whether we were going to 
repeal the 1099 requirement. That is why there is so much support for 
this repeal. It is so important, during these difficult economic times, 
that we avoid imposing any tough regulations on our small business 
owners.
  The other point to be made is, this 1099 requirement is vastly 
different from what is familiar to most Americans. For most Americans, 
1099 forms

[[Page 5141]]

generally come from their financial institutions to report the interest 
they have earned on their savings accounts or to report the interest 
they pay on their mortgage to their lenders. That requirement is 
specific, to make sure they report directly their tax liability on the 
income earned in that specific tax year. Now we are reverting to a very 
different form by requiring businesses to report in the aggregate all 
their expenditures for goods and services to any vendor. That is a very 
different requirement.
  My concern is one that has not been widely discussed. The fact is, by 
doing so, by making this conversion how we use the 1099 form, it is 
essentially putting in place an infrastructure, a system for a value-
added tax, by requiring businesses to report all this information. So 
we could essentially have a system in place, where we could have a 
functioning value-added tax by taking the next step based on the 
information that is already required to be submitted by this 
requirement.
  It is urgent we repeal this mandate. It is important to send that 
message. It is important to repeal this mandate in its entirety.
  I yield the floor.
  Mr. LEVIN. Mr. President, today we vote on a bill that would repeal 
the 1099 reporting expansion that was made into law under the 
Affordable Care Act. This reporting requirement was designed to improve 
tax compliance. However, many businesses fear this expansion could end 
up burdening not those who seek to evade their taxes, but those who 
innocently do business with those who do. This is why I support the 
repeal of this reporting requirement in the Affordable Care Act.
  Unfortunately, I do not agree with how this bill would pay for this 
repeal. This bill would hurt individuals who receive modest pay 
increases or bonuses during the course of a year. The Affordable Care 
Act subsidizes insurance coverage for middle-class families making 
under 400 percent of the Federal poverty level who don't have access to 
employer provided coverage. Under current law, people close to 400 
percent line are protected from substantial tax penalties if they 
receive a modest raise or bonus that bumps them into a higher income 
bracket. This bill would eliminate that protection and impose a 
retroactive penalty on those families that could amount to thousands of 
dollars. Those families, even if they end up over the line by $1, would 
have to pay back the entire amount of their subsidies. For a family of 
four, for instance, this could mean owing more than $5,900 on their 
taxes because of an unexpected increase in income from $89,000 a year--
398 percent of the FPL--to $89,500--$100 above the 400 percent FPL.
  I support the amendment offered by Senator Menendez that directs the 
Secretary of the Department of Health and Human Services to study the 
impact of this bill on health care premiums and coverage for small 
businesses and their employees. If the HHS Secretary finds that the 
changes in repayment amounts under this bill would increase health 
insurance premiums for small businesses or their employees or increase 
the number of uninsured, the repayment amounts would revert to current 
law.
  I look forward to continuing to improve the Affordable Care Act and 
will continue to fight for affordable and available health care for all 
Americans.
  Mr. BINGAMAN. Mr. President, I rise today to raise serious concerns 
about the offset proposed for H.R. 4.
  I am very supportive of the underlying intent of H.R. 4--repeal of 
the 1099 reporting requirements, which were created in Affordable Care 
Act. In fact, I have voted to repeal these requirements over the last 
few months.
  However, I have deep concerns about the offset proposed in H.R. 4. 
The offset represents harmful policy and has been strongly objected to 
by President Obama in a Statement of Administrative Policy or ``SAP'' 
issued on March 1.
  Specifically, H.R. 4 would increase the tax burden on American 
families seeking health insurance coverage in the new health insurance 
exchanges. The legislation does so by increasing the amount of 
repayment that must be made by families who receive health insurance 
premium subsidies. Note that these taxpayers could be reporting their 
income correctly to the exchange throughout the year but still owe 
substantial payment or ``true-up'' when they file their taxes simply 
because the look-back period for subsidy eligibility encompasses an 
entire year. For example, under H.R. 4, families that have no income 
for part of the year--for example because of the loss of a job--could 
owe $12,000 in true-up payments because they secure employment midway 
through the year.
  I am strongly supportive of ensuring that taxpayers receive accurate 
subsidies to help offset the cost of health insurance in the new State 
exchanges. Many experts throughout the Nation have told us, however, 
that it is critical to provide reasonable hold harmless levels for 
taxpayers given that subsidies are paid on a monthly basis and the look 
back period to determine income eligibility encompasses a year. These 
experts tell us that without such a hold harmless, taxpayers' 
willingness to participate in the new exchanges will be chilled 
resulting in only sicker, more costly populations coming to the 
exchange. This in turn, will drive up costs for individuals, families, 
and businesses purchasing coverage in the exchange. In fact, the Joint 
Committee on Taxation has confirmed to me that they project hundreds of 
thousands of Americans will forgo the receipt of health insurance as a 
result of H.R. 4 and that a majority of the offsetting revenue from the 
amendment is generated by forgone health insurance coverage and 
subsidies, not the recouping of overpayments.
  I ask unanimous consent that President Obama's March 1 SAP be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Statement of Administration Policy


    h.r. 4--comprehensive 1099 taxpayer protection and repayment of 
               exchange subsidy overpayments act of 2011

       The Administration strongly supports efforts to repeal the 
     provision in the Affordable Care Act that established 
     information reporting requirements for tax purposes that 
     place an unnecessary bookkeeping burden on small businesses. 
     The Administration is committed to reducing the gap between 
     taxes legally owed and taxes paid, but believes that the 
     burden created on businesses by the new information reporting 
     requirement on purchases of goods that exceed $600, as 
     included in Section 6041 of the Internal Revenue Code as 
     modified by Section 9006 of the Affordable Care Act, is too 
     great.
       However, the Administration has serious concerns about the 
     approach the Congress has taken to paying for the repeal. The 
     Administration strongly opposes the House's offset to pay for 
     this repeal in H.R. 4, which would undo an improvement 
     enacted with nearly unanimous support in the Medicare and 
     Medicaid Extenders Act that eliminated an egregious ``cliff'' 
     in the tax system affecting middle income taxpayers. 
     Specifically, H.R. 4 would result in tax increases on certain 
     middle-class families that incur unexpected tax liabilities, 
     in many cases totaling thousands of dollars, notwithstanding 
     that they followed the rules. The Administration also notes 
     that a provision repealing the same information reporting 
     requirements in the FAA Air Transportation Modernization and 
     Safety Improvement Act would pay for the repeal with an 
     unspecified rescission of $44 billion that, in combination 
     with other proposals currently under consideration in 
     Congress, could cause serious disruption in a wide range of 
     services provided by the Federal government.
       The Administration looks forward to continuing to work with 
     the Congress on the repeal of the information reporting 
     requirements in the course of the legislative process, 
     including finding an acceptable offset for the cost of the 
     repeal.

  The PRESIDING OFFICER. Who yields time?
  Mr. HATCH. Mr. President, how much time remains to both sides?
  The PRESIDING OFFICER. The Senator from Utah has 1 minute 20 seconds, 
the majority has 3\1/2\ minutes.
  Mr. HATCH. I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, I know we often read that Democrats and 
Republicans cannot agree. Here is a news flash: We agree on repealing 
1099. I have listened to my three distinguished colleagues spend a lot 
of their

[[Page 5142]]

time talking about repeal of 1099. We absolutely agree. I have voted 
six times to do that. That is not an issue.
  What is an issue, and my distinguished colleague from Nebraska--with 
whom I have worked with before in passing some important legislation, 
and I have a great deal of respect for him--talked about a victory for 
small business. I agree. But I want a total victory for small business, 
and a total victory for small business is not repealing 1099 and then 
giving them a bigger tax bill for their employees or raising the cost 
of insurance for that small business. A real victory is an opportunity 
to make sure we repeal 1099--my amendment clearly has 1099 repeal going 
forward--but then does a study that says if small businesses are going 
to face higher costs or their employees are going to face a $10,000 tax 
bill, then that part of it should not proceed.
  If I am wrong, nothing will happen. The study will come. They will 
say: No, small business is not going to have an increase; no, taxpayers 
are not going get a surprise tax bill. Then the repeal will have 
already gone through and there is no foul, no harm. But if I am right, 
then voting against my amendment is voting for a tax bill for middle-
class families, voting to increase insurance on small businesses.
  The issue about going quickly to the President, first of all, is a 
priority. So if we pass this, this is not, as has been suggested, an 
alternative; it is just a single amendment to the existing bill on a 
provision that allows for the repeal to go through but makes sure small 
businesses and individuals do not get higher costs. That can go to the 
House. The House can pass it and send it to the President--away we go; 
we do not have a problem. Helping small businesses by reducing their 
paperwork while at the same time driving up health care costs and 
forcing coverage cuts for small businesses is simply not good policy.
  In all fairness, I did not hear voices rise up when this bill was 
being delayed over the last week by some of my Republican colleagues 
trying to get their amendments considered, and those amendments were 
extraneous to small business. So we either have a double standard here 
or a desperate attempt to defeat what I think is a good amendment.
  The House could have taken up the amendment, H.R. 4, and passed it 
into law by now. So I think it is somewhat disingenuous to have an 
argument that says we can't afford one amendment to proceed on this 
bill when our colleagues, at the beginning of this Congress, made a big 
production about a full debate and an open amendment process on all 
things considered on the Senate floor, but when there is one amendment 
that is meant to protect taxpayers and small businesses, oh, no, that 
is going to create an inordinate delay, after we had well over a week 
of delays by Republican colleagues seeking extraneous amendments to a 
small business bill. Please.
  Now, I love Senator Hatch's jalopy. I remember that movie, took my 
family to see it. But the worst jalopy would be taking away 1099 and 
then going ahead and giving small businesses higher costs and a higher 
tax bill for individuals. That is a real jalopy. That is a lemon.
  So we have an opportunity to take away and undo and repeal the 1099. 
My amendment permits that to go forward but at the same time makes sure 
small businesses do not get hurt.
  How will they get hurt? How may they get hurt? Well, a lot of States, 
for example, are considering whether to combine their small business 
and individual pools. For States that combine their pools, small 
businesses could see an increase in premium costs. The healthiest 
people with little to no health care costs will have the most 
flexibility to decide whether to purchase coverage, and they may simply 
pay the mandate penalty versus the potential for a $10,000 to $12,000 
tax bill. With more healthy people opting out of buying insurance, the 
pool of people who ultimately enroll in the exchanges that would 
consist of, on average, less healthy individuals--that is going to push 
up the premiums for everybody else buying insurance in the exchanges, 
including small businesses and employees. That is only one example.
  The other problem is, when you are facing your constituents, I hope 
you are ready to tell them that through no fault of their own--when 
they had a job, they lost their job, you know, 6 months into the year, 
and they face the fact that they are still over the amount, and now 
they are going to get a $10,000 tax bill or, on the contrary, they 
didn't have a job when they got the subsidy, and then they got a job in 
the middle of the year and they are a dollar over the amount, and they 
are going to face a $10,000 tax bill. Is that what we want to do, send 
that type of bill to families?
  Finally, I appreciate hearing Senator Hatch say this is a downpayment 
on total repeal of the health care law. Well, you know, if we are going 
to do that, if that is what this is really all about, this is not 
helping small businesses. Helping small businesses means we repeal 1099 
and don't increase their costs and don't send their employees a $10,000 
or higher tax bill.
  So this is about, in my mind, making sure there is a win-win for 
small businesses because if we want to repeal the health care law, then 
that is about making sure we go back to preexisting conditions where a 
husband who had a heart attack on the job can no longer get insurance; 
where a child born at birth with a defect cannot get insurance; where a 
woman was facing 150-percent higher premiums than a man simply because 
she was a woman; where, in fact, you couldn't keep your child, up to 
age 26, on your insurance as they are going through school; where, in 
fact, we could close the prescription drug coverage for seniors. If 
that is what we are talking about, that is a different subject, and we 
can have that debate. But this debate is about making sure we repeal 
1099 and making sure small businesses do not get higher costs and their 
employees do not get a tax penalty. I think everybody should want to be 
for that. We can send it straight to the House. The House can pass this 
version and send it to the President. That is ultimately the 
opportunity here.
  I urge my colleagues to support my amendment. That is why the Main 
Street Alliance, which also supports businesses, says: Our small 
business owners are very supportive of efforts to remove the imposition 
of the new 1099 reporting requirements. We cannot, however, accept a 
pay-for that undermines other important provisions of the law that 
helps small businesses and contains costs.
  My amendment ensures that we do both--repeal 1099 and not put the 
burden on small businesses in terms of higher health insurance costs, 
and their employees. I urge passage of my amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, how much time remains?
  The PRESIDING OFFICER. One minute 20 seconds, and the majority has 
3\1/2\ minutes remaining.
  Mr. HATCH. I ask unanimous consent that I give a minute to the 
distinguished Senator from Nebraska and then, if there is not enough 
time remaining, that I be given sufficient time, up to 2 minutes, with 
an equivalent amount of time given to the other side, to make my 
closing remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Nebraska.
  Mr. JOHANNS. Mr. President, again with all due respect to my 
colleague from New Jersey, there have been over 200 business groups 
that have expressed opposition to the Menendez amendment, and that 
would include the NFIB, the National Association of Manufacturers, the 
Franchise Association, and the chamber of commerce. You see, requiring 
people to pay back what they should not have received in the first 
place is regarded as good government, not bad policy. That is what 
should be happening.
  The second thing I would say about this is that this becomes a 
roadblock because we end up with a different House bill and a different 
Senate bill. If this is such a great idea, attach the amendment to some 
other bill that is

[[Page 5143]]

coming along, and we can get the study done.
  So, again, I appreciate the opportunity to work with Senator 
Menendez, but I do believe very strongly that we need to defeat this 
amendment.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, if you say you are for fiscal 
responsibility, you need to oppose the amendment of my friend from New 
Jersey. Here is why. The nonpartisan scorekeeper for tax legislation, 
the Joint Committee on Taxation, tells us that the Menendez amendment 
puts the savings on the House bill in doubt. That means that if the 
Menendez amendment is adopted, the House bill will add to the deficit 
by perhaps as much as $25 billion. The Menendez amendment would 
maintain the risk of payment of billions in fraudulent, improper, or 
excessive health insurance exchange subsidies. What is more, the Senate 
unanimously agreed to a similar offset on the doc fix bill.
  My friends, if you were against fraudulent, improper, or excessive 
health insurance payments before, stick to your guns--oppose the 
Menendez amendment.
  I yield the floor, and I am prepared to yield back any time we have.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, I am compelled to answer because now I 
hear about fraud and $25 billion. You cannot have it both ways. You 
cannot say this amendment costs money--what the Joint Committee on 
Taxation said is it could not determine a revenue score. And it is 
important to point out that this amendment does not spend an additional 
dime. And the only reason--the only reason--this amendment would have a 
revenue effect would be if the offset increases health insurance costs 
or cuts coverage for small businesses. Otherwise, there is no issue. So 
you can't have it both ways. Either there is an admission that it is 
going to cost small businesses more, cost taxpayers more, or it is not. 
That is No. 1.
  No. 2, this is not about fraud. This is not about someone seeking 
something they did not have the right to receive. Fraud is individuals 
who are deliberately underreporting their income or fraudulently trying 
to get extra support. That is not what we do. Those enforcement 
provisions in the law to combat fraud and abuse are untouched by my 
amendment. This is simply about someone who honestly got a subsidy. And 
we have a provision in the law that deals with how they pay back, but 
it doesn't throw them over the cliff and send them a surprise $10,000 
tax bill. So that is simply not exactly quite the same thing.
  Yes, the doc fix--we did use a provision to deal with the SGR with 
the doc fix, but we did not put small businesses and families at harm, 
as H.R. 4 does.
  So the reality is that this amendment permits repeal to move forward. 
After the repeal, a study is done. If there is no harm, if it 
supposedly does not cost small businesses any more money, does not 
drive up insurance costs, does not cost the taxpayer maybe $10,000 or 
$12,000, fine. But if it does, then we would ultimately not have that 
harm come upon small businesses, come upon individual taxpayers with a 
surprise bill. And we could, of course, if that is the end result, 
which we don't know--that is why the Joint Tax Committee could not come 
up with a determination. We will not know until the study is done. 
Instead of having a risky venture, let's have the actual facts. Repeal 
will have gone through. We can protect small businesses and those 
taxpayers, and, if necessary, we can find a different offset. If they 
are wrong and I am right, that this concern about taxpayers getting a 
surprise bill and small businesses having greater insurance costs is 
true, then we will protect them and we can look for a different offset 
at the time. Repeal will have taken place no matter what.
  Why would you not want to protect small businesses and taxpayers from 
getting a surprise bill? That is all my amendment does, and that is why 
I urge its passage.
  Mr. HATCH. Mr. President, I would like to briefly respond to my 
friend from New Jersey's comments about the Joint Committee on 
Taxation's analysis of his amendment.
  The Joint Committee on Taxation corresponded with Senator 
McConnnell's office on Senator Menendez's amendment. I ask unanimous 
consent to have printed in the Record relevant portions of that e-mail 
discussion.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Correspondence to Staff of Senator McConnell From Tom Barthold, Chief 
       of Staff, Joint Committee on Taxation, Dated April 5, 2011

       You requested an estimate of the Menendez amendment 
     (FRA11028).
       The Johanns amendment (which is essentially H.R. 4) 
     increases maximum repayment caps for overpayment of health 
     insurance exchange subsidies for taxpayers in certain income 
     categories below 400 percent of the federal poverty level 
     (``FPL''), and removes the caps for taxpayers above 400 
     percent FPL. We estimate that this portion of H.R. 4 raises 
     $24.9 billion relative to present law. The Menendez amendment 
     (FRA11028) would amend this amendment to require that the 
     Secretary of Health and Human Services conduct a study to 
     determine if the new repayment caps in H.R. 4 will (A) 
     increase health insurance premiums within Exchanges for 
     employees or owners of small business, or (B) result in an 
     increase in the number of individuals who do not have health 
     insurance, a disproportionate share of which are employees or 
     owners of small businesses. If the study determines that one 
     or both of (A) or (B) would occur, the changes to the caps in 
     H.R. 4 would not be implemented.
       We do not project an increase in health insurance premiums 
     in the Exchanges for employees or owners of small businesses 
     as a result of H.R. 4. We project that there would be an 
     increase in the number of people who are uninsured as a 
     result of the new caps in H.R. 4, because some people would 
     avoid purchasing insurance through the Exchanges in order to 
     avoid possible future increases in tax liability.
       We would expect that about 1/3 of the adults who fail to 
     enroll in the exchanges for this reason would be unemployed. 
     Of those who are employed, we would expect that they would be 
     roughly equally divided between being employees or owners of 
     firms less than 50, and employees or owners of firms greater 
     than 50. Thus, a larger share of small business employees 
     would be affected than of large business employees, although 
     small business employees and owners would comprise less than 
     half of the newly uninsured.
       Because it is unclear how the Secretary will interpret the 
     terms ``disproportionate share'' and ``small business,'' we 
     cannot predict the findings of this study. If the study 
     conducted by the Secretary reaches a similar conclusion to 
     our estimate, and the Secretary deems that this would meet 
     the criteria of a disproportionate share of employees or 
     owners of small businesses among the newly uninsured, this 
     amendment would result in failure to implement the new caps 
     under H.R. 4, thus losing $24.9 billion relative to the 
     Johanns amendment.
                                                     Tom Barthold.

  Mr. HATCH. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second. The yeas and nays are ordered.
  The question is on agreeing to the Menendez amendment.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Idaho (Mr. Risch).
  Further, if present and voting, the Senator from Idaho (Mr. Risch) 
would have voted: ``nay.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 41, nays 58, as follows:

                      [Rollcall Vote No. 48 Leg.]

                                YEAS--41

     Akaka
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Boxer
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Conrad
     Coons
     Durbin
     Feinstein
     Franken
     Gillibrand
     Harkin
     Inouye
     Johnson (SD)
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Menendez
     Merkley
     Mikulski
     Murray
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Stabenow
     Udall (CO)
     Udall (NM)
     Whitehouse
     Wyden

                                NAYS--58

     Alexander
     Ayotte
     Barrasso
     Blunt
     Boozman
     Brown (MA)
     Burr
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi

[[Page 5144]]


     Graham
     Grassley
     Hagan
     Hatch
     Hoeven
     Hutchison
     Inhofe
     Isakson
     Johanns
     Johnson (WI)
     Kirk
     Klobuchar
     Kyl
     Landrieu
     Lee
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Moran
     Murkowski
     Nelson (NE)
     Nelson (FL)
     Paul
     Portman
     Pryor
     Roberts
     Rubio
     Sessions
     Shelby
     Snowe
     Tester
     Thune
     Toomey
     Vitter
     Warner
     Webb
     Wicker

                             NOT VOTING--1

       
     Risch
       
  The PRESIDING OFFICER. On this vote, the yeas are 41, the nays are 
58. Under the previous order requiring 60 votes for the adoption of 
this amendment, the amendment is rejected.
  The question is on the third reading of the bill.
  The bill was ordered to a third reading and was read the third time.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill pass?
  Mr. JOHANNS. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Idaho (Mr. Risch).
  Further, if present and voting, the Senator from Idaho (Mr. Risch) 
would have voted ``yea.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 87, nays 12, as follows:

                      [Rollcall Vote No. 49 Leg.]

                                YEAS--87

     Alexander
     Ayotte
     Barrasso
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Blunt
     Boozman
     Boxer
     Brown (MA)
     Brown (OH)
     Burr
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Conrad
     Coons
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Hatch
     Hoeven
     Hutchison
     Inhofe
     Isakson
     Johanns
     Johnson (SD)
     Johnson (WI)
     Kerry
     Kirk
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lee
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Moran
     Murkowski
     Nelson (NE)
     Nelson (FL)
     Paul
     Portman
     Pryor
     Reed
     Roberts
     Rockefeller
     Rubio
     Sessions
     Shaheen
     Shelby
     Snowe
     Stabenow
     Tester
     Thune
     Toomey
     Udall (CO)
     Udall (NM)
     Vitter
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--12

     Akaka
     Durbin
     Harkin
     Inouye
     Lautenberg
     Leahy
     Levin
     Mikulski
     Murray
     Reid
     Sanders
     Schumer

                             NOT VOTING--1

       
     Risch
  The PRESIDING OFFICER. Under the previous order requiring 60 votes 
for passage, the bill is passed.
  The Senator from Colorado is recognized.

                          ____________________