WASHINGTON — Rep. William L. Owens, D-Plattsburgh, voted Thursday to repeal a tax-reporting requirement tied to the health care reform law but said he did not like the way Republicans chose to pay for getting rid of the requirement.
At issue is a directive that businesses file a tax form called a 1099 for purchases in excess of $600, a mandate both parties agree places an undue burden on small businesses. Lawmakers have been calling for its repeal virtually since the health care bill was signed into law last year.
Republicans covered the cost of repealing the measure — $29 billion from 2011 to 2021 — by eliminating a tax credit that applies to taxpayers moving from one tax bracket to another. The requirement was expected to boost tax compliance and thus revenues.
"The purpose of our bill is to help employers do what they do best," said the sponsor, Rep. Dan Lungren, R-Calif. "Plain and simple, they create jobs."
While relatively modest, Mr. Lungren's bill could become the first successful effort to scale back any part of the 384,000-word health care legislation that was approved over Republican opposition last year.
Mr. Owens said in an interview after the vote that he would rather pay for repeal by cutting other programs or by raising taxes for the wealthy, an idea he had pitched in his own repeal legislation.
Ultimately, he said, he is confident the Democratic-led Senate will reach a solution he finds more agreeable.
"The Senate is very creative in that area," Mr. Owens said.
No House Republicans voted against the repeal, which passed. Seventy-six Democrats voted for repeal, and 112 voted against it.
"There is widespread agreement that the 1099 reporting requirement needs revision. So what's the hang-up?" said Rep. Henry Waxman, D-Calif. "The hang-up is the Republicans want to pay for this tax cut on the backs of lower-income families."
The Obama administration, in its formal statement of position, declared this week that it "strongly supports" repealing the tax-reporting provision but it also raised "serious concerns" about how the cost is offset.
Mr. Lungren first introduced his bill last April. At the time, he faced resistance from both sides of the aisle.
Some Republican leaders feared the measure would distract from the higher-profile but long-shot proposal to repeal the entire health care law, Mr. Lungren noted Thursday. Democratic leaders, too, were trying to steer their rank-and-file members away from the GOP-authored measure; a review of House records shows that Democrats began signing on as co-sponsors only this year.
"It was slow going in the early days, I will say that," Mr. Lungren said. "This has been somewhat of a long journey."
McClatchy Newspapers contributed to this report.