Possible new hurdle for 1099 repeal: reconciliation

The Senate, in the meantime, has approved repeal language as part of the Federal Aviation Administration (FAA) reauthorization bill. While a House decision to simply adopt the Senate FAA bill would be the quickest way to pass 1099 repeal, the House indicated on Friday that it was interested in taking up its own FAA bill.

On Friday night, the House introduced an FAA bill that would set FAA spending at 2008 levels, which Democratic senators oppose. At the very least, the different House bill sets up the possibility of a prolonged fight over FAA authorization, which could significantly delay 1099 repeal.

Moving 1099 repeal on its own is still an option, but even then, it is not yet clear that the House would accept Senate language. The Senate language would repeal the 1099 language and instruct the Office of Management and Budget to rescind $44 billion in discretionary, unobligated funds in order to offset the cost of repeal. It would explicitly exempt the Departments of Defense and Veterans Affairs, and the Social Security Administration, from these budget rescissions.

One factor that will likely help is that the Senate language is based on a bill introduced by Sen. Mike Johanns (R-Neb.), and the coming week may reveal how close the Ways & Means Committee is to that language.

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