House Republicans nix Democrats effort to repeal 1099 requirement

The House failed Friday to pass a bill that would have repealed the mandate included in the healthcare law requiring small businesses to file 1099 forms to the IRS for purchases to suppliers over $600. The mandate is set to take effect in 2012. 

House Republicans were angered today at the way Democrats brought up the measure for consideration and the controversial offset to pay for its cost. 

The measure failed to get the two-thirds majority needed -- on a 241-154 vote -- with 153 Republicans voting against the measure and one Democrat opposing. 

House Ways and Means Chairman Sander Levin (D-Mich) said by defeating the bill "Republicans made clear that they care more about some companies that ship jobs overseas than small businesses that face a potential burden by this reporting requirement." 

"Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most," he said. 

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."

Earlier today, 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. 

Republicans questioned the offset for the bill that would raise about $19 billion by closing those tax loopholes. 

Camp preferred a GOP bill that would've repealed the 1099 requirement provision and paid for it by reining in subsidy overpayments related to the new healthcare law. 

Camp called the Democrats' bill "a missed opportunity to fix a fundamental flaw in the healthcare law" and help American employers provide jobs."