Healthcare

The House on Monday approved a controversial bill that would repeal two IRS reporting requirements, after three hours of tense debate in which Democrats said the Republican bill would raise taxes on middle-class Americans.

The bill, H.R. 4, was approved in a 314-112 vote. Every Republican and 76 Democrats supported the bill, which would eliminate language establishing IRS reporting requirements for companies and property owners on transactions valued at $600 or more.

For all the partisan fighting about the House Republican proposal to pay for repealing 1099, the GOP proposal is very similar to the one Democrats supported and approved last year.

In last year's healthcare law, Democrats proposed a system that offers subsidies to people for buying healthcare, and allows overpaid subsidies to be recaptured based on how much a family's income is higher than the federal poverty level.

Rep. Earl Blumenauer called GOP claims of a government healthcare takeover a "lie" after Rep. Dan Lungren criticized the law.

As expected, the House on Thursday has launched into a debate over whether repealing two IRS reporting requirements would be a tax relief or a tax hike.

Members are debating H.R. 4, which would repeal the reporting requirements and pay for it by lowering the amount of subsidy available to families for the purchase of health insurance. House Ways & Means Committee Chairman David Camp (R-Mich.) argued in his opening statement that reducing these subsidies is not a tax increase, as Democrats have argued.

"According to the non-partisan 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."

The House on Thursday is expected to hear what could be more fierce debate over whether eliminating IRS reporting requirements for companies and property owners is a relief from onerous paperwork, or a tax hike for middle-class Americans.

Democrats on Wednesday argued that the so-called 1099 reporting requirements should be eliminated, as all agree that this requirement will overburden small companies. But Democrats also say that by pushing for passage of H.R. 4, Republicans would pay for this $19 billion "fix" in a way that raises taxes.

Specifically, the bill would reduce health insurance premium subsidies that were provided for in last year's healthcare law. Democrats argue that this is the same as a tax hike, and challenged Republicans not to pay for the change "on the backs of hard-working middle-class Americans," as Rep. Joseph Crowley (D-N.Y.) said.

The House on Wednesday afternoon approved a rule setting up a Thursday debate and vote on a bill that eliminates IRS reporting requirements for companies and people who own rental properties.

The rule for the so-called 1099 repeal bill was approved in a 252-175 vote, and only 14 Democrats supported it. During the debate earlier in the day, Democrats said the underlying bill, H.R. 4, would raise taxes on middle-class Americans.

But Republicans argued the bill would simply repeal an unnecessary subsidy to people for buying health insurance under last year's healthcare law, and said the subsidy would not take effect until 2014. Republicans also noted that the Obama administration has supported a scaling back of this subsidy.

Democrats on Wednesday afternoon objected to a Republican plan to pay for the elimination of widely reviled IRS reporting requirements by reducing health insurance subsidies under the healthcare reform law.

In a debate on the rule for the bill, H.R. 4, several Democrats took to the floor to protest this way of paying for the elimination of language requiring companies to report all transactions valued at $600 or more to the IRS, and similar reporting requirements for property owners. Rep. Jared Polis (D-Colo.) warned that reducing health insurance premium payments would result in bills to middle-class Americans of several thousand dollars per year.

Rep. Joseph Crowley (D-N.Y.) added that Democrats want to end the so-called 1099 reporting problem, but said "we will not do it on the backs of hard-working middle-class Americans."

A small number of Republicans voted against the two-week continuing resolution (CR) on Tuesday night as a way to protest the bill's funding of last year's healthcare law, and the absence of larger cuts.

Six Republicans ended up rejecting the bill: Reps. Justin Amash (Mich.), Michele Bachmann (Minn.), Louie Gohmert (Texas), Walter Jones (N.C), Steve King (Iowa), and Ron Paul (Texas). Bachmannn said her vote against the GOP bill was over healthcare.

"I agree with the need to cut spending, but I voted against the two-week CR today because it did not include language to defund ObamaCare," Bachmann said. "Over the coming years, ObamaCare will hurt our economy so defunding it must remain part of our negotiations on a CR."

The House Rules Committee on Tuesday approved two rules for bills that will be considered on the House floor Wednesday and Thursday.

The first is a rule for the Surface Transportation Act, H.R. 662, which will come up on Wednesday. The measure would fund federal transportation spending at 2010 levels. As approved, it only allows a Republican technical amendment to be in order, so Democrats will not be able to offer amendments.

The second is a rule for a bill, H.R. 4, that would repeal the IRS reporting requirement in last year's healthcare law, a requirement that both parties oppose. This is a closed rule that will not allow for any amendments, but it will allow for two and a half hours of debate that is expected to conclude on Thursday.

After the House approved a two-week spending bill on Tuesday, Republicans began a one-hour special-order discussion in opposition to the healthcare law.

But action could stall in the Senate as the chambers differ on how to pay for the lost revenue.