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Senate uses Form 1099 as political bludgeon, fails to fix reporting problem

September 14, 2010

Judging from what happened today in the U.S. Senate, I guess my bold prediction about the future of the expiring 2001/2003 Bush tax cuts is going to miss the mark.

Both Democratic and Republican lawmakers, as well as the White House, agree that changes need to be made to the impending requirement that businesses file more Form 1099s.

But Senators on both sides of the aisle are acting like spoiled schoolchildren instead of working together on a realistic way to fix the problem. Didn't we just see this act back in July?

Plus, Senate Republican Leader Mitch McConnell of Kentucky apparently just can't find it in his GOP soul to replicate House Minority Leader John Boehner's (Ohio) quasi-conciliatory stance about possibly voting for a bill that raises taxes on wealthier individuals.

Close-up of school report and pencil

If we were handing out a report card for the Senate, in addition to a big fat F, it would have to include the notation, "members don't play well together."

Listen up Senators. It's time to grow up. You were sent to Washington to work for us, not to find ways to win elections that keep you in Washington, D.C., in perpetuity!

Form 1099 tit-for-tat: Today's votes on the Form 1099 requirement, which is slated to take effect in 2012 and require business to report financial transactions of more than $600 with every client or other business, is a prime example of the immature political attitude that's infected Capitol Hill.

When it came time today to consider proposals by both parties, each failed to garner the necessary procedural votes to move forward. The Los Angeles Times reports:

Republicans blocked a Democratic proposal backed by the White House that would have scaled back the mandate by exempting businesses with 25 employees or fewer and by exempting transactions worth less than $5,000. The cost of altering the proposal was offset by eliminating a tax break for oil and gas companies.

Democrats in turn blocked a GOP proposal that would have eliminated the mandate
entirely and also have cut funding for public health programs and exempted more
people from having to buy health insurance starting in 2014, a key provision
designed to control premiums for everyone.

Now all y'all can go home and tell the voters what you didn't do for them.

One area of agreement: The one thing they did agree to today was the Small Business Jobs Act, passing a key test vote by a 61-to-37.

Today's vote allows the measure, which the Joint Tax Committee estimates would provide $12 billion worth of tax relief for small businesses between 2010 and 2020, to go to a final vote, probably later this week.

If the bill does ultimately pass the Senate, it must go back to the House for approval before it can be sent to the prez to be signed into law.

We shall see.

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