Senate votes to repeal healthcare law's 1099'tax reporting language

The Senate Wednesday voted to repeal controversial language in last year's healthcare act that requires companies to report for each vendor goods and services transactions worth $600 or more to the IRS.

The Senate voted in favor of an amendment to the Federal Aviation Administration authorization bill that would eliminate the tax language. The amendment was offered by Sen. Debbie Stabenow (D-Mich.), and was similar to a Republican proposal from Sen. Mike Johanns (R-Neb.) that had 61 Senate co-sponsors.

The Stabenow amendment would repeal the language and ask the Office of Management and Budget to rescind $44 billion in discretionary, unobligated funds in order to offset the cost of repeal. The amendment would explicitly exempt the Departments of Defense and Veterans Affairs, and the Social Security Administration, from these budget rescissions.

Late Wednesday, Sens. Carl Levin (D-Mich.) and Daniel Inouye (D-Hawaii) proposed an alternative amendment that would not have left it to the Executive Branch to make the rescissions.

"The Constitution places in our hands, and ours alone, the authority to appropriate funds," Levin said on the floor. "We cannot statutorily pass that buck, and we should not."

However, Senate leaders said the Levin-Inouye proposal needed 60 votes to pass, and it went down in a 44-54 vote. After that vote, Inouye raised a point of order that the Stabenow amendment violates budget rules, but the Senate voted 81-17 to waive that point of order. Having survived that procedural vote, the Stabenow amendment was considered approved.

Stabenow's 1099 repeal language was offered by Senate Democrats yesterday as an alternative to a Republican proposal to repeal last year's healthcare law in its entirety.