WASHINGTON — The Senate on Monday failed to repeal an unpopular element of the health care overhaul even though Democrats and Republicans agreed it needed to be jettisoned to prevent businesses from being saddled with undue tax paperwork.
Caught in a partisan dispute over how to proceed with eliminating new tax reporting rules, the Senate twice was unable to reach an agreed-upon threshold of 67 votes to eliminate a provision that critics have seized on to illustrate the failings of the health care legislation championed by Democrats.
A Democratic plan to overturn it attracted only 44 votes in support with 53 against; a Republican plan that would have cut other programs to make up the shortfall caused by the repeal fell short on a vote of 61 to 35.
Under the provision, which was added to the health care law to help pay for it, businesses that spend a cumulative $600 or more with a vendor, supplier or contractor would have to file a 1099 form with the Internal Revenue Service identifying the recipient of the money.
The idea is that the new reporting requirement would increase compliance with tax laws, generating added tax payments that would help pay for new health care coverage. Lawmakers in both parties now say that the provision goes too far and that it would put a burden on companies now exempt from reporting such spending while requiring an expansion of the Internal Revenue Service to keep track of the added paperwork.
http://www.nytimes.com/2010/11/30/us/politics/30cong.html?hpw=&pagewanted=print