The Senate appears poised to support H.R. 4, the House version of legislation repealing the much-criticized 1099 reporting provision through a vote likely to occur this week.
This development comes shortly after Senate Majority Leader Harry Reid, D-Nev., indicated he would support the House version of the legislation even though a number of House Democrats and consumer groups call the pay-for provision a major tax increase on the middle class.
The White House also voiced opposition to the House pay-for provision, although it did not threaten a veto.
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–to offset the loss from the 1099 repeal.
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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% of the federal poverty line. House Democrats call that a tax increase on the middle class, and the administration agreed in a policy statement disclosed before the House vote.
The House pay-for is aimed at eliminating a $21.9 billion deficit over 10 years, projected to occur because of the end of the proposed reporting requirements.
The revised legislation also repeals an additional Form 1099 information reporting requirement, imposed on owners of rental real estate.
Health Care for America Now said in a letter to Senate Democrats that the House bill will create “unintended consequences” for the middle class.
It would do so, HCAN said, by changing the premium credit repayment schedule.
Under current law, families are already required to repay premium credit overpayments up to a reasonable cap at the end of the year.