Two separate attempts to repeal one terrible provision in the gargantuan ObamaCare law failed in the Senate this week, lighting up a serious issue for small business owners to consider when they vote in November. Anyone who is an independent contractor or owns a small business has likely seen a 1099 form. Pre-ObamaCare, the IRS required 1099s only for services purchased from vendors. In order to make ObamaCare "deficit-neutral," the legislation requires that small businesses report any business-to-business transaction over $600 with a 1099. The amount of paperwork and accounting needed to maintain compliance with this bureaucratic nightmare will add immensely to operating costs for small businesses. In some cases, it will bury them. Sen. Mike Johanns (R-NE) sponsored an amendment to repeal the provision, but even with the help of a handful of Democrats, the amendment failed 46-52. Sen. Bill Nelson (D-FL) crafted a weaker version that would have placed a $5,000 reporting threshold for 1099s and eliminated the requirement altogether for businesses with fewer than 25 employees. That failed to reach cloture, 56-42. This plan was little more than smoke, though, because it still would require businesses to monitor all their transactions for possible filing in case they reach the $5,000 threshold. It would also cause businesses to avoid hiring that 26th employee -- it simply wouldn't pay to grow.
The repeal of the 1099 provision failed this time, but ObamaCare is clearly under attack. The very Congress that passed it is now deliberating changes and repeals to the president's signature agenda item, just in time for the midterms. On the legal front, U.S. District Judge Roger Vinson in Florida said that on Dec. 16 he would hear arguments on a lawsuit challenging the constitutionality of ObamaCare. Twenty state attorneys general claim the health care bill violates states' rights and will force massive new spending. Unfortunately, they have to wait to state their case until Oct. 14, when Vinson will rule on the federal government's dismissal motion. Legal analysts say that it's likely the dismissal will be rejected since Vinson has already set a court date. There is little agreement among these same analysts on the outcome of the case.
With all of the consternation over something Obama lectured we "should be saying 'thank you'" for, it's no wonder Democrats "are spending three times more advertising against the health reform law than they are in support of it."2