1099 Repeal Passes House

A White House statement, issued Tuesday night, stopped short of saying the president would veto the measure if the House method for paying for it wins Senate approval.

The Senate version calls for paying for the $21.9 billion increase in the deficit through repeal of the provision by giving the Office of Management and Budget the ability to take away nearly $44 billion of discretionary budget authority—except from the Departments of Defense, Veterans Affairs and Social Security.

The House version, by contrast, would pay for the repeal by making consumers repay all of their insurance subsidies under the health care law once their income rises beyond 400 percent of the federal poverty line.

House Democrats called that a tax increase on the middle class, and the administration agreed in a policy statement.

The White House statement said the House pay-for "would undo an improvement enacted with nearly unanimous support in the Medicare and Medicaid Extenders Act that eliminated an egregious 'cliff' in the tax system affecting middle income taxpayers."

The revised House legislation also repeals an additional Form 1099 information reporting requirement imposed on owners of rental real estate.

In a statement, House Republicans called Democrats hypocritical because they supported the same pay-for during the December debate on how to stop a 21 percent cut in payments to doctors under Medicare.

In comments during the floor debate today, Rep. David Camp, R-Mich., chairman of the House Ways and Means Committee, said that, according to the non-partisan Joint Committee on Taxation, "under the better enforcement rules of H.R. 4, there will be some people who decide not to buy coverage through the health insurance Exchange because it's no longer as attractive to accept a taxpayer-funded subsidy that they are not eligible for now that they would be required to pay a larger share, or in some cases all, of it back under H.R. 4."

A Democratic statement from Rep. Sander Levin, D-Mich., ranking minority member of the House Ways and Means Committee, said the health care reform bill implemented a graduated income approach that protects those with lower incomes, and eliminated the cliff that caused people to face massive tax increases if their income rose to more than 400% of poverty.

On the House floor, he said, "If this bill would become law, it would mean a tax increase for hundreds of thousands of middle-income taxpayers. …What this bill would do would be to saddle middle-income taxpayers in future years, pure and simple."