The provision, which was included in the health care reform bill, would require companies to report on any purchases of goods or services of over $600 from a single vendor during the calendar year to the Internal Revenue Service on a Form 1099-MISC. The dueling amendments, from Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Mike Johanns, R-Neb., mainly differed in how they would be paid. They were attached to a larger food safety bill, which overcame a procedural hurdle to move forward by a vote of 69-26, shortly before the vote on the amendments.
“There are two big differences between our two amendments,” said Baucus. “First, my alternative is especially friendly to small businesses. It takes extra measures to permit the IRS to waive certain duplicative reporting requirements for small businesses that use credit cards to pay their bills. Second, our two versions differ about paying for the change. The alternative offered by my colleague from Nebraska would give the unelected director of OMB [the Office of Management and Budget] unprecedented authority to slash spending, all on his own. The Johanns alternative would thus abdicate Congress’s responsibility over the budget. For these reasons, I urge my colleagues to oppose the Johanns amendment and support my alternative.”
Johanns contended that the Baucus amendment would add $19 billion to the federal deficit and drive up the overall cost of the health care bill.
He noted that his own amendment would direct the Office of Management and Budget to identify $39 billion in unspent and unobligated accounts to replace the revenue that might have been generated by the 1099 paperwork mandate, representing only about 5 percent of the total funds in unspent and unobligated accounts and giving the administration discretion to ensure the funds do not affect ongoing and necessary programs.
“Every small business out there is asking the question, ‘Why is the cost of this health care bill falling on my back?’” said Johanns. “You can’t go anyplace in this country without people asking, ‘What is this about the 1099 requirement?’ They are concerned they are going to spend on accountants for compliance with this requirement. They are asking, ‘Why are you picking on us?’ Why would you add $19 billion to the federal deficit, and that’s what the Baucus amendment does. You simply won’t find better offsets than the ones mine has. My phone is ringing off the hook, and we can’t go along with these offsets. The Baucus amendment simply does not pay for these offsets. In the end, it hampers the next generation. It adds to the national debt.”
Read more: Accounting Today