WASHINGTON (CN) – The Senate on Tuesday failed to advance two amendments to the small business bill that would soften or repeal a tax provision of the health care reform package. The amendments came from both sides of the aisle.
The amendments sought to change a mandate in the health care reform bill requiring businesses to report any transaction over $600 to the IRS.
This mandate, known as the 1099 provision, was expected to raise $17 billion to help fund health care for uninsured Americans, but received criticism for its potential cost to small business.
An amendment sponsored by Sen. Mike Johanns, R-Neb., sought to repeal the tax provision in its entirety.
On the Senate floor Tuesday, Johanns called the 1099 provision a requirement that “no business in America supports” and complained that President Obama was “demanding absolute loyalty to the health care bill.”
Sen. John Thune, R-S.D., called it a “ridiculous requirement” that would “drown small business owners in paperwork.”
Democrats countered with an amendment proposed by Sen. Bill Nelson, D-Fla., that would leave the 1099 provision in place, but would exempt businesses with 25 or fewer employees from the requirement and would raise the transaction amount to $5,000. The Nelson amendment proposed to make up the lost revenue by eliminating a tax break for oil and gas companies.
The Senate voted 46-52 in favor of advancing the Johanns amendment, 14 votes short of the 60 votes needed to move forward. The Senate also shot down the Nelson amendment in a 56-42 vote.