1099 Repeal Amendments Proposed for Aviation Legislation

Sen. Mike Johanns, R-Neb., and Debbie Stabenow, D-Mich., have introduced similar but competing amendments to repeal the expanded 1099 information reporting requirements in the health care reform bill, intending to attach the amendments to a re-authorization bill for the Federal Aviation Administration.

The expanded 1099 reporting provision requires businesses to report to the IRS any purchases of $600 or more in goods and services from another business or individual during the calendar year. It has been criticized by both Republican and Democratic lawmakers, as well as small business advocacy groups and the American Institute of CPAs. Even President Obama lent his support to fixing the onerous requirements during his State of the Union address last week.

This will be the third time Johanns has attempted to get the 1099 provision repealed. In previous efforts, his repeal amendment has needed to compete against alternatives from Democrats (see Senate Again Fails to Repeal 1099 Requirements). There are currently two other versions circulating from Democrats, one introduced last month by Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., and another one introduced by Stabenow (see Baucus and Reid Pledge to Repeal 1099 Requirements). Stabenow introduced a new 1099 repeal amendment for the FAA legislation on Tuesday.

However, the Johanns amendment may well be the one that passes. So far, he has attracted 61 co-sponsors, including 16 Democrats (one of whom is Stabenow), according to Johanns spokesman Paul Donahue. He believes the larger FAA reauthorization bill enjoys broad bipartisan support.

The $34.5 billion bill includes $8 billion for airport construction and infrastructure improvement, as well as establishing a whistleblower office at the FAA, upgrading air traffic control technologies, and creating a national review board that would travel to FAA offices to perform safety audits. It is estimated to save or create 280,000 jobs.

Sen. Stabenow’s amendment to the FAA bill differs from Johanns' amendment in several respects, according to Stabenow spokesman Cullen Schwartz. To avoid adding to the budget deficit, Stabenow’s amendment authorizes the director of the Office of Management and Budget to cut unnecessary unobligated spending, but exempts the Department of Defense, Veterans Affairs and the Social Security Administration's administrative expenses from being cut.

“Hers exempts more areas than Sen. Johanns' amendment would,” he said. “Sen. Johanns does not exempt the Social Security Administration. This is an issue that Senator Stabenow has been working on since last year, something she believes needs to happen very soon to help remove very onerous paperwork requirements on small businesses so they can focus on creating jobs instead of sending out paperwork to the IRS.”

Johanns spokesman Paul Donahue emphasized that the Johanns amendment would not "touch" the Social Security program. He contended that the two amendments were virtually identical, but the Stabenow amendment contained a few extra words that would specifically exempt the administrative costs of the Social Security Administration from being cut.

Schwartz believes the Stabenow amendment will come up for a vote on Wednesday afternoon, but Donahue was uncertain if the Johanns amendment would be voted on that same day. Baucus is not expected to introduce his repeal bill as an amendment to the FAA bill as he worked with Stabenow on her bill.

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