After a months-long battle, the Senate voted Tuesday, 87 to 12, to repeal the 1099 tax-reporting requirement in Democrats’ healthcare reform bill.
The measure now goes to the president, who is expected to sign it, making it the first part of his party’s signature reform bill to be scrapped.
"This is a big win for small business and, more importantly, I hope it’s the first of many successful repeal votes related to the disastrous healthcare bill passed by Democrats last year,” Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday before the vote.
The House easily passed the same repeal, 314-112, earlier this month. In that vote, every Republican and 76 Democrats supported the bill.
In a statement, the White House said it was "pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses."
"As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families," the White House said. "And the Administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans.”
Under the version passed by both chambers, repeal will be paid for by forcing families whose income unexpectedly exceeds certain levels to repay subsidies they received from the federal government.
In floor debate, Republicans said their plan would reduce the national deficit by $166 billion over 10 years. But Democrats said the Republican plan would increase the tax burden on the middle class.
Sen. Robert Menendez (D-N.J.) offered an amendment that would have instructed the secretary of Health and Human Services (HHS) to study the repeal and determine if it would cost small businesses more than it would save them. His amendment, however, was defeated 41 to 58; it needed 60 votes to pass.
Menendez defended his amendment on Tuesday, insisting the Republicans’ plan could end up dearly costing the same small-business owners and taxpayers supposedly helped by the repeal.
“While it provides relief on one hand, who is to say it might not also take away relief on the other?” Menendez asked. “I am concerned it increases the healthcare burden on the very same people for whom we are trying to provide relief.”
But Sen. Mike Johanns (R-Neb.), who shepherded the 1099 repeal though the Senate, objected to Menendez’s proposal because he said it would delay the repeal. The altered bill would have had to go back the House for deliberation and a vote.
“Adding anything on, passing anything else, will cause our job creators to wait on the sidelines once again,” said Johanns. “We will have different versions … and I am afraid it may fade into Never Never Land.”
Johanns said Menendez ought to tack his amendment on to another bill where it would not endanger the future of the repeal.
“It’s already been a long and tortured process to get here today,” added Johanns.
This post was updated at 2:07 p.m.