White House supports effort to scale back small business provision of health law

"Facing a backlash from small businesses over a new tax-reporting requirement in the healthcare law the president signed in March, the Obama administration is embracing the first change to the landmark legislation," the Los Angeles Times reports. "In a letter to Senate leaders, Health and Human Services Secretary Kathleen Sebelius and Treasury Secretary Timothy F. Geithner urged the Senate to back a proposal to scale back the new reporting mandate. The law requires businesses to report to the Internal Revenue Service transactions worth more than $600, a provision that was added to the law to raise an estimated $17 billion over a decade and offset the cost of expanding coverage to millions of uninsured Americans." The Democratic proposal would scale back the provision to include transactions worth more than $5,000 in order to avoid administrative hassles for small businesses. "On Tuesday, the Senate is to take up two competing proposals to change the mandate as amendments to a small-business assistance bill, one by Florida Democrat Bill Nelson and one by Nebraska Republican Mike Johanns" (Levey, 9/14).

Politico: "Republicans oppose the Nelson amendment because it would be paid for by imposing a new tax on oil companies and doesn't provide enough relief from the new reporting requirements. Geithner and Sebelius said they strongly oppose the amendment from Sen. Mike Johanns (R-Neb.), which would completely repeal the 1099 provision. It would be paid for by removing money from a fund created by the health care overhaul designed to promote prevention and wellness" (Haberkorn, 9/13).

The Wall Street Journal Health Blog: "The fund was established to shore up anti-tobacco and obesity programs, fortify public health departments and offer more services to underserved communities, among other things. Under the law, $15 billion was to be appropriated to the fund between the current fiscal year and 2019, with $2 billion in each fiscal year thereafter. The amendment would divert $11 billion of that money from fiscal years 2010-17" (McKay, 9/13).

Fox News: "Two senior Senate leadership aides, one Republican, one Democrat, tell Fox that neither measure is expected to garner the 60 votes necessary for approval. … Small business support in this intense midterm election year, in which political oddsmakers predict major gains for Republicans, is considered crucial. Democrats are expected to pass the small business jobs bill later this week, which creates a $30 billion loan program, a move that many will, no doubt, hope overshadows the 1099 controversy" (Turner, 9/13).

Politico, in a separate story: "The U.S. Chamber of Commerce and National Federation of Independent Business, which traditionally support Republican policies, have come out in strong support of the Johanns amendment. The Main Street Alliance, which traditionally supports Democratic positions, opposes the Johanns bill because it doesn't want prevention money to fund the change. All three business groups oppose the Nelson amendment because they want the reporting provision completely eliminated" (Haberkorn, 9/14).

Kaiser Health News: This week's Health on the Hill includes a discussion of the proposed amendments (9/13).