1099 repeal gets trickier with House bill

“This is essentially the same provision Democrats used to pay for [the doc fix],” committee Chairman Dave Camp (R-Mich.) said.

When health insurance exchanges open in 2014, the federal government will provide subsidies to families making under a certain threshold amount. The Ways and Means bill, which passed the committee by party-line vote Thursday, would require consumers earning more than 400 percent of the poverty line to pay back the subsidy.

Republicans said their bill returns the recapture penalties closer to the healthcare reform law’s original language, but Democrats said it would remove a provision that protects people from having to pay the IRS the entire tax credit.

“It’s absolutely the wrong way to pay for legislation,” said Rep. Shelley Berkley (D-Nev.). “The people most affected by this are poor and middle-class families already struggling to make ends meet.”

It’s unsure when the bill will be sent to the House floor, but it’s bound to set up a new fight in the Senate, which earlier this month approved a 1099 repeal with 81 votes. The Senate version, included as an amendment to an aviation bill, paid for the 1099 repeal by authorizing the Office of Management and Budget to identify unobligated funds for elimination.

Rep. Ron Kind (D-Wis.) said that the House should take up the Senate-approved version.

“When you get 81 votes on anything in the Senate these days, it’s tough to move them off that position,” Kind said.

However, Budget Committee Chairman Paul Ryan (R-Wis.) ripped the Senate pay-for as a “gimmick.”

“The pay-for itself violates the pay-go system, it doesn’t work and it’s a fraudulent pay-for, because one-time discretionary cuts for long-term revenue changes does not add up,” Ryan said.

Sen. Mike Johanns (R-Neb.), who has been leading the 1099 repeal effort in the upper chamber, on Wednesday night filed a bill mirroring the Ways and Means language.

“If advancing the House bill means this looming mandate is repealed sooner rather than later, then let’s get it done,” Johanns said in a statement.

The Obama administration has repeatedly backed 1099 repeal in recent months, but it’s avoided endorsing an offset. The Ways and Means Committee on Thursday also approved a bill that would repeal the 1099 requirement without paying for it.