Senate moves closer to deal repealing 1099 provision in healthcare law

The Senate this week seems closer than ever to approving a repeal of the widely opposed 1099 language in last year’s healthcare law, with Democrats and Republicans prepared to support nearly identical repeal language.

Sen. Mike Johanns (R-Neb.) re-introduced repeal language this week as an amendment to the Federal Aviation Administration (FAA) authorization bill. His amendment would repeal the 1099 requirement to file tax forms for transactions worth $600 or more each year with a company, and ask the Office of Management and Budget to rescind $39 billion in discretionary funds in order to offset the cost of repeal.

Several Democrats opposed this language in a vote last November, although it still received 61 votes and only failed because a two-thirds vote was required. It was also more popular than Democratic language that did not include any offset.

This time around, Senate Democrats are putting up a 1099 repeal amendment as an alternative to a Republican proposal to tack a healthcare repeal amendment onto the FAA bill.

Earlier on Tuesday, and at the instruction of Senate Majority Leader Harry Reid (D-Nev.), Sen. Debbie Stabenow (D-Mich.) proposed 1099 repeal language that is nearly identical to the Johanns language. The Johanns bill exempts the departments of Defense and Veterans’ Affairs from being cut in order to offset the $39 billion, and the Stabenow amendment adds just a few words to also exempt the Social Security Administration from cuts.

An aide to Johanns said today it was still unclear this evening whether the Senate will be able to vote on both proposals on the floor this week. However, he also said that Johanns never intended to expose SSA to cuts, a sign that Johanns could support the Stabenow language. He also added that if given the choice between repealing 1099 and not repealing it, Johanns would vote to repeal it.

President Obama also supports repealing the provision, something he reiterated in his State of the Union address last week.