Repeal of 1099 mandate draws ire from House Republicans

By Vicki Needham - 07/30/10 03:23 PM ET

House Republicans voiced dismay Friday over a measure that addresses a GOP-backed issue but uses a controversial offset to pay for the bill.

House Ways and Means Chairman Sandy Levin (D-Mich.) offered a bill Friday on the floor that would repeal the mandate included in the healthcare law requiring small businesses to file 1099 forms to the IRS for purchases to suppliers above $600. The mandate is set to take effect in 2012.

The measure is expected to get a vote later today before the House recesses until mid-September. Democrats put the bill on the suspension calendar today, requiring a two-thirds vote to pass.

Levin argued that bill would be good for small business and would reduce tax incentives that encourage multinational companies to ship jobs overseas. He said it also closes an "egregious loophole in the gift tax, the grantor retained annuity trust, that is only available for extremely wealthy individuals."

The bill provides an opportunity to "stand up for millions of Americans and small business or keep a tax loophole and side with companies that ship jobs overseas."

Republicans questioned the offset for the bill that would raise about $19 billion by closing those tax loopholes and said they were disappointed in the process on how the bill was brought to the floor.

Ways and Means ranking member Dave Camp (R-Mich.) said in his 20 years in office, he hadn't "seen a more disappointing time for this House" in regards to the process.

Camp said he'd only heard about the bill 10 minutes prior to its introduction by New York Democratic Reps. Scott Murphy and Bill Owens, and he was disappointed that Democrats failed to consult or discuss the bill before today.

"I think that's regrettable, I think it's unfortunate, I don't think it had to be that way," Camp said. "We've always had a great working relationship."

Camp tried to offer a motion to recommit on Thursday that would've repealed the 1099 requirement provision, and is paid for by reining in subsidy overpayments related to the new healthcare law.

He urged Democrats to vote on a repeal that doesn't include "a massive job killing tax increase," calling the Democrats' bill "a missed opportunity to fix a fundamental flaw in the healthcare law" and help American employers provide jobs.