Ending Provision in Health Care Law is Victory for Small Businesses & Jobs

Washington, DC – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, continued her push to create jobs by voting in favor of legislation today that would repeal the onerous 1099 reporting requirement for small businesses that was included in last year’s radical health care law. 

“When I talk with small business owners in Eastern Washington, their top concern is the 1099 requirement,” said Rep. McMorris Rodgers.  “The 1099 is an administrative nightmare that will increase costs for small businesses – forcing them to spend millions on paperwork that would be better used hiring more employees.  At a time when 28 million Americans want a full-time job but don’t have one, we need to end this unnecessary roadblock to job creation.  By repealing the 1099 today, we are taking another bold step in our agenda to create jobs and increase confidence in the private sector.”  

Last year’s health care law expands reporting rules by requiring businesses to issue a Form 1099 for any payment to another business that exceeds $600 per year.  The National Small Business Association estimates that the average company will have to submit at least 95 forms under the requirement – a major departure from the handful that are currently filed today.  According to the National Federation of Independent Businesses, this will have a “direct negative impact on small businesses.”  H.R. 4 repeals this massive paperwork burden.  The bill passed 314-112.

“Could you imagine picking up donuts for your Friday staff meeting and then having to send the donut shop a 1099?  Or sending the Post Office a 1099 if you go over $600 a year in postage?  We should be encouraging small businesses to create more W-4s, not more 1099s.”

Rep. McMorris Rodgers spoke on the House floor today in support of H.R. 4.  To watch her floor speech, click here.  A copy of her prepared remarks are below. 

H.R. 4

In the House of Representatives, U.S.

Mar. 3, 2011

Statement of Rep. Cathy McMorris Rodgers

Mr. Speaker, I rise in strong support for H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011.  There is not a single issue that I hear more about from Eastern Washington businesses than the “1099” requirement that made its way into last year’s health care bill.   Not only is this provision an administrative nightmare for employers, it has the potential to devastate small businesses.  In fact, the National Small Business Association estimates that the average company will have to submit at least 95 forms under the requirement – a radical departure from the handful that are currently filed today. 

Even tax consultants have said that this requirement is more onerous than any tax that the IRS could collect from businesses.  At a time that when our economy is still struggling, jobs are scarce, and unemployment is still hovering near 10 percent, the last thing we should do is slam the door on employers, particularly the small businesses that make up the backbone of our economy.

The 1099 is just one in a number of policies that have created a climate of fear and uncertainty for the private sector.  Businesses don’t know what regulatory hurdles they will have to jump through or the increased costs they will have to incur in the short or long term.  We need to give them the certainty they need to start expanding and create jobs again. A critical step in that effort is to repeal the onerous 1099 form.

I urge my colleague to support H.R. 4 and yield back the balance of my time.