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Senate Dems Join Call to Repeal Tax Requirement from Health Care Reforms

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Republicans in the Senate want to repeal a part of President Obama's health care reforms they say place undue burden on businesses -- and so do, apparently, Democrats.

Senate Democrats, led by Florida Sen. Bill Nelson, introduced on Thursday a measure to roll back a provision of the health care reforms that requires businesses to fill out more tax forms, the Hill reports.

Republicans had already introduced a plan to repeal the provision, and the measure was gaining support -- including the support of one Democrat, moderate Sen. Blanche Lincoln of Arkansas.

The provision in question requires businesses to fill out a 1099 form with the IRS once the goods it purchases from another business in the span of a year exceed $600. It does not create a new tax, but simply requiring businesses to fill out the paperwork would generate approximately $17 billion over 10 years, the nonpartisan Congressional Budge Office estimates.

Senate Minority Leader Mitch McConnell said this week the provision would create "an enormous amount of paperwork and complexity" for businesses, the Hill reports. Republicans are pointing to the new requirement as an example of how the president's policies hurt business.

Given that repealing the provision would leave the government $17 billion short, the Republican proposal would cut billions of dollars in preventive health care services, according to the Hill.

By contrast, the Democratic proposal would scale back the filing requirement -- only requiring businesses with more than 25 employees to fill out a 1099 after purchasing $5,000 worth of goods. To make up for the lost revenue, the Democratic measure would reportedly eliminate a tax break for large oil companies.

The Senate is slated to take a procedural vote on the Republican bill on Sept. 14, according to the Hill, and subsequently take up the Democratic alternative as an amendment.

Both Democrats and Republicans in the House also want to repeal the provision, but they failed to pass a bill to do so last week, because of differences of opinion over how to make up for the $17 billion lost.

Meanwhile, some states continue to challenge more significant portions of the health care reforms, such as the individual mandate -- the requirement that all Americans acquire health care. A district judge this week denied the White House's request to dismiss a lawsuit against the requirement. The Virginia General Assembly passed legislation this year exempting state residents from the federal coverage mandate, and the Virginia Attorney General filed suit against the federal law. Several other state attorneys general have filed a separate lawsuit challenging the federal law.

Former Vermont Gov. Howard Dean, a longtime liberal advocate for health care reform, predicted on MSNBC today that the individual mandate would be taken off the law books by 2014, when most of the reforms will be in place.

"Academically you want a mandate. The American people aren't going to put up with a mandate," Dean said. "I made this prediction before and I'm going to make it again: by the time this thing goes into effect in 2014, I think the mandate will be gone either through the courts or because it's unpopular. You don't need it."

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