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  • Health Care Repeal Fails But Key Tax Issue Sails Through

Health Care Repeal Fails But Key Tax Issue Sails Through

Kelly Phillips ErbFebruary 3, 2011

You know how when you go to the gym at the beginning of the year, you can’t get a spot on treadmill because all of the new folks determined to make a change? All filled with vim and vigor and the best of intentions? (They’re also the ones wearing Uggs on the treadmill and talking on their cell phones but that’s another issue altogether.) The new Congress is a lot like those folks at the gym (hopefully minus the Uggs), ready to tackle anything and everything – at least at the first of the year.

It was no surprise, then, that Wednesday was a busy day on the Hill. First up, the Senate voted down an effort to repeal the health care law. The vote was, of course, strictly partisan. All of the Democrats who were in attendance voted against the repeal (Mark Warner, D-VA was not present for the vote) and all of the Republicans in attendance voted in favor of the repeal. Of the two Independents, Sen. Bernie Sanders (I-VT) voted against the repeal and Sen. Joe Lieberman (I-CT) did not show up for the vote (insert random snarky comment here). The effort to lead the health care repeal had been introduced by Sen. Mitch McConnell (R-KY).

So, no movement on the health care bill, right?

Or not so fast.

In a maneuver that took many by surprise, a separate amendment to the bill, S.Amend.9, sponsored by Sen. Debbie Stabenow (D-MI) to repeal the expanded 1099 reporting requirements, sailed through on an 81-to-17 vote just after 5:00 p.m. All 17 of the “no” votes came from her fellow Democrats.

The amendment doesn’t revoke all 1099 reporting requirements, it merely restores the rules as though the health care bill had never changed the requirements. The amendment said, in part:

Section 9006 of the Patient Protection and Affordable Care Act, and the amendments made thereby, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such section, and amendments, had never been enacted.

A similar amendment offered by Stabenow’s colleague, Sen. Carl Levin (D-MI) didn’t make it through: that amendment would have squashed the reporting requirement and ended tax breaks for oil companies. Both of those themes were touched upon by President Obama in his State of the Union speech.

The effort to repeal the health care law had already passed in the House, so expect another stab at it in the Senate. Sen. Lindsey Graham (R-SC) has already indicated that he’ll try again.

Previous efforts to separately repeal the expanded 1099 reporting requirements failed last year.

Earlier this year, the House considered, but did not pass, a separate amendment to eliminate the 1099 provisions. In order to actually repeal the reporting requirement, the House will have to approve a version of the bill similar to the one that passed in the Senate on yesterday. There’s a lot more jockeying for position in the House so expect it to take a bit longer. To me, the House tends to be kind of like the folks at the gyum who run to their favorite elliptical machine; if they don’t get exactly the machine they want, they pout and make noise about it instead of trying the one next to it. Psst: they both work. Just saying.

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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Congress, health care bill, health care law, health care reform, Patient Protection and Affordable Care Act, Sen. Debbie Stabenow

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2 thoughts on “Health Care Repeal Fails But Key Tax Issue Sails Through”

  1. bondwooley says:
    February 3, 2011 at 10:37 am

    While the spokes of government decide whether or not Americans should be entitled to health care, we’re going to have to look for ways to stretch our health care dollars. Hopefully, it doesn’t come down to this:

    http://www.youtube.com/watch?v=4qDCFzCgvhw

    Reply
  2. Julie Kinnear says:
    February 5, 2011 at 7:29 am

    I am very glad the repeal has not passed in the Senate. Why do they want to repeal the bill as a whole? There clearly are some very good provisions already in effect such as the one saying that nobody can be denied health insurance based on a pre-existing condition. If they repeal this particular provision they will do a lot of harm to people diagnosed with cancer or other serious medical conditions.

    Reply

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