Rep. Lungren to drop 1099 repeal bill

Rep. Dan Lungren (R-Calif.) is expected to re-introduce his effort to repeal the healthcare reform law's 1099 tax provision Wednesday afternoon, making his one of the first bills of the new Congress.

The provision raises $19 billion to pay for healthcare reform by requiring businesses to report all supply purchases of at least $600 or more with one vendor. A Lungren spokesman tells The Hill that the bill should be dropped around 2:30 p.m.

The reporting requirement takes effect in 2012.

Lungren first introduced his bill on April 26, just a month after healthcare reform was signed into law. In September, he introduced a discharge petition to try to force a vote on the issue, but it never reached the 218 signatures needed.

"I feel it is important to keep fighting to repeal this portion of the healthcare bill because it will affect so many local businesses and constituents in my region," Lungren said at the time. "I just completed a busy August work period and as I listened to people all across my district, it became abundantly clear that we must do all we can to help small business entrepreneurs succeed, not hinder them with new tax provisions that smother job growth."

Repealing the provision has the support of the White House, the business community and Democrats and Republicans in both chambers of Congress. But efforts to repeal stalled repeatedly last year because lawmakers couldn't agree on how to pay for it.

Democrats rejected Republican proposals to repeal the provision by cutting funding for prevention efforts or using unobligated federal dollars. And Republicans opposed a Democratic plan to offset the cost with a change to a tax policy that Democrats say encourages multinational companies to ship jobs overseas.

The Lungren bill is not offset with equivalent increased taxes or spending cuts, and the Senate rejected a similar unpaid-for proposal by Finance Committee Chair Max Baucus (D-Mont.) last year. On the flip side, the Lungren bill already has 180 co-sponsors, more than last year, including seven Democrats. 

House Republican leaders have so far not publicly committed to taking up the Lungren bill quickly. Repealing the 1099 provision, however, was a plank in their Pledge to America.

"This 1099 reporting mandate is so overbearing that the IRS ombudsman has determined that the agency is ill-equipped to handle all the resulting paperwork," the pledge states. "We will repeal this job-killing small business mandate."