The Senate voted against moving forward Tuesday on Democratic and Republican amendments that would make changes to a requirement in the healthcare reform law for businesses to issue 1099 forms to all vendors from whom they buy more than $600 of goods or services in any year.

The Senate first voted, 46-52, on a Sen. Mike Johanns (R-Neb.) amendment that would repeal the provision and would have paid for it by lowering the affordability exemption for the new individual mandate from 8 percent to 5 percent, making fewer people subject to the individual health insurance mandate. The amendment also proposed a $15 billion fund for wellness programs not be funded until 2018. 

The second vote, on a similar amendment by Sen. Bill Nelson (D-Fla.), also failed to gain the 60 votes needed to move forward, failing 56-42. Nelson's provision would have changed the threshold from $600 to $5,000. 

Lawmakers will most likely look separately at the 1099 issue and possibly repeal it or change its scope. The debate on the 1099 has been less about whether to repeal or change the requirement, which opponents say could place a heavy paperwork burden on upwards of 30 million small businesses, and more about how to cover the loss of about $17 billion in revenue to pay for the healthcare law. 

House and Senate Democrats have expressed and even voted in support of the repeal but lawmakers can't agree on how to pay for it. 

The Business Roundtable on Tuesday unveiled a report showing the interdependency between large and small businesses as trade advocates seek to increase trade, which they say will help get the U.S. economy moving again. 

The report shows that large U.S. corporations purchase an average of more than $3 billion of goods and services from small businesses. Collectively, these firms generate an estimated $1.5 trillion in sales for smaller companies annually.  

As Congress looks to tackle a small-business bill and extend at least part of the George W. Bush-era tax cuts, a new Gallup poll shows that consumer confidence is weaker than it was a year ago — when the economy was struggling to emerge from the Great Recession.

"Although economic confidence in the U.S. appeared to be improving at this time last year, just the opposite is the case in 2010," Gallup states. "Consumer perceptions of the U.S. economy are now substantially below the depressed levels a year ago."

TAX CUTS TUESDAY

Despite much chatter about what House GOP Leader John Boehner said Sunday, any deal on the Bush-era tax cuts is going to be shaped by the Senate. Senate Republicans are showing a united front for extending all of the cuts, while Senate Democrats are trying to figure out where the 60 members of their conference are.

Sen. Jim Webb (D-Va.) added his voice Monday to those of Democratic centrists wary of letting tax rates for wealthy rise next year.

“I don’t think we ought to be drawing a distinction at $250K,” Webb told Fox News.

Four other Dems -- Kent Conrad, Ben Nelson, Evan Bayh and Joe Lieberman -- have called for temporary extensions of all the cuts.

Democratic leadership still plans to roll out their tax cut legislation this week, but it’s not clear what they plan to do with the upper-income cuts. The Hill: http://bit.ly/cKPzVm

Expect more news around 2 p.m. Tuesday, when Democratic and GOP senators emerge from the first conference policy lunches since recess.

On the GOP side, Mitch McConnell has already unveiled his plan: make all of them permanent.

Reuters hed: “Senate Republicans Firm on Tax Cuts for the Rich": “Prospects faded for breaking the deadlock when Republicans gave a cool reception to a signal on Sunday by John Boehner, their party's leader in the House of Representatives, that he might be willing to bend.” http://bit.ly/cSx3sP

With Senate GOP centrists largely behind McConnell’s approach, President Obama and Democrats are trying to seize on differences between House and Senate Republicans. Obama on Monday in Virginia urged Congress to act on his plan to extend only the middle-class cuts: “We could get that done this week... But we’re still in this wrestling match with John Boehner and Mitch McConnell.” NYT: http://bit.ly/cSx3sP

Once you get past the partisan wrangling, one thing's clear: the deficit will grow. Ezra Klein: http://bit.ly/bBzWvw

Bush administration economist Alan D. Viard argued that the upper-income cuts weren’t sold the right way. Supporters should have touted their investment effects and not just pushed them as stimulus. http://bit.ly/aEw5RI

But TNR’s Jonathan Cohn says that the Bush administration lied to get the tax cuts for the rich passed, attaching them to middle-class cuts. http://bit.ly/dh3QX6

ZANDI, BUFFETT, BERNANKE ON THE ECONOMY

Mark Zandi, the economic guru that frequently consults with Dems on the Hill, is pushing a new jobs plan: $50 billion for an expanded hiring tax credit and federal insurance for businesses that invest in infrastructure projects. http://bit.ly/aFAiQS

But... President Obama already signed a hiring tax credit this year and he has his own infrastructure bank plan.

Warren Buffett says he’s a “huge bull”: “We are not going to have a double-dip recession at all.” AP: http://bit.ly/9hDH7R

Fed Chairman Bernanke’s 2011 outlook may have outsized influence on other Fed officials as they decide whether to buy up more Treasury notes to boost the economy. Bloomberg: http://bit.ly/aWK1fk

Business groups such as the Business Roundtable and NFIB are lining up against the president’s latest job-creation package, even it’s mostly tax breaks for small biz: WSJ: http://bit.ly/bxwpVI

David Brooks breaks with Rep. Paul Ryan (R-Wis.) and AEI’s Arthur Brooks on the idea that America is all about limited government. The story the GOP should be pushing is that it’s “limited-but-energetic” government, Brooks says. http://nyti.ms/ajfmbx

Krugman pushback... Stephen Williamson, economist at Washington U. in St. Louis, asks if the NYT columnist’s Nobel Prize can be revoked. Williamson takes issue with Krugman’s Monday column attacking China’s exchange rate policy. http://bit.ly/a95n6i

The Economist’s Free Exchange blog says Krugman is making straw man arguments. http://bit.ly/czcFS6

FINREG

Elizabeth Warren, the left’s candidate to head the new consumer protection bureau, may get a temporary appointment from the president. NYT: “Two people who have been briefed on the appointment process, who spoke on condition of anonymity because they feared reprisal, said the White House was exploring ways to have Ms. Warren effectively run the bureau without having to endure a confirmation battle and, potentially, the threat of a Republican filibuster.” NYT: http://nyti.ms/9tjBKX

The Basel international finreg agreement calling for more bank equity standards is a win. Felix Salmon: http://bit.ly/de0Pnn

AIG is trying to get out from under bailout requirements. http://bit.ly/ae3hJq

... while smaller banks are having trouble making their TARP repayments. http://bit.ly/dxdyTk

With the small business bill slated for action on Tuesday, two Democratic senators have proposed an alternative for repealing a 1099 requirement that taps unused economic stimulus funds. 

Sens. Ben Nelson (Neb.) and Mark Begich (Alaska) introduced the amendment Monday because of concerns over a Republican proposal that cuts billions in funding from wellness programs. 

"Sen. Begich and I are offering an alternative because of concerns that the small business amendment now before the Senate is doomed for cutting funding to successful wellness and prevention programs,” Nelson said.

Nelson is talking about the amendment offered by Sen. Mike Johanns (R-Neb.) that nixes the 1099 requirement and pays for it by lowering the affordability exemption for the new individual mandate from 8 percent to 5 percent, making fewer people subject to the individual health insurance mandate. The amendment also proposes that a $15 billion fund for wellness programs receive money until 2018 that is included in the healthcare law. 

The 1099 provision is supposed to raise about $17.1 billion to pay for the healthcare law. 

The Independent Community Bankers of America urged Senate leaders on Monday to pass a small-business bill they say will provide much-needed greater access to credit. 

The ICBA singled out the bill's proposed $30 billion lending fund that will "spur the flow of additional small business credit," said Camden Fine, the group's president and chief executive, in a letter today to Majority Leader Harry Reid (D-Nev.), Minority Leader Mitch McConnell (R-Ky.), Small Business Chairwoman Mary Landrieu (D-La.) and the panel's ranking member Olympia Snowe (R-Maine).

The Senate is scheduled to resume work on the bill on Tuesday morning with a vote to end debate on a Sen. Mike Johanns (R-Neb.) amendment. The bill could pass the Senate by the end of the week with Republican support. 

With less than fours months before the estate tax returns to levels not seen in nearly a decade, Senate Minority Whip Jon Kyl (R-Ariz.) said little progress has been made on the issue. 

The issues of taxes roiled the Democratic party on Monday, with several members staking out ground in the debate.

Four House Democrats are circulating a draft letter asking Speaker Nancy Pelosi (D-Calif.) for a vote on extending the Bush-era tax cuts for one year, a central issue in the November election. 

"We urge you to consider legislation to extend all of the income tax cuts," the letter to Pelosi reads, CBS reported Tuesday. "In recent weeks, we have heard from a diverse spectrum of economists, small business owners, and families who have voiced concerns that raising any taxes right now could negatively impact economic growth. Given the continued fragility of our economy and slow pace of recovery, we share their concerns."

Several proposals have cropped up on Capitol Hill in recent days — House Republicans are calling for a combined spending freeze at 2008 levels and extending tax cuts for two years.