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Obama gives in on least popular part of Obamacare

Posted By Jonathan Strong On 11:13 PM 01/25/2011 In Blog - Jonathan Strong | 6 Comments

President Obama said in the State of the Union address he is willing to ditch a burdensome tax reporting provision in Obamacare that may be the least popular part of his health care law.

The provision requires businesses to fill out an IRS 1099 form for every business-to-business expense over $600. Critics have decried the measure, saying it will result in a huge new paperwork burden.

The provision, which has nothing at all to do with health care, was originally inserted by Sen. Max Baucus, Montana Democrat, as a means of increasing revenue by $17 billion over 10 years to pay for the health care law, as the reporting requirement is expected to cut down on tax fraud.

But the provision quickly became controversial. House Administration Committee Chairman Dan Lungren first proposed to repeal the measure.

Now, Obama said in the State of the Union that he is willing to ditch the 1099 requirement.

“I am eager to work with you,” he said to critics of Obamacare. “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”

Other high-profile Democrats have expressed a desire to remove the provision as well. But Republicans are expected to use its repeal as leverage to remove other portions of the law as well.

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