Paperwork Mandate Elimination Act Amendment

Floor Speech

Mr. JOHANNS. Mr. President, I rise to talk about small businesses. I think we all know and recognize--certainly they do--that small businesses and businesses in general face a mountain of paperwork to comply with a whole host of regulations, most notably our very complex tax laws. Instead of trying to aid that, now Washington is increasing that paperwork mountain through a new 1099 mandate found in, of all places, the new health care bill. This mandate has absolutely nothing--absolutely nothing--to do with improving health care of this country, and it should not be a part of that law or any other law, for that matter. Thus, I am offering an amendment to repeal this mandate.

The amendment says no to piles of unnecessary paperwork which the IRS itself admits is going to be virtually useless. Any taxpayer with business income will be required to issue 1099 forms to all vendors from whom they buy more than $600 of goods or services in any year. So now the most routine business expenses will be subject to this new burdensome paper trail.

Let me give my colleagues some examples. A laundromat that buys soap each week would now have to issue a 1099 to their supplier and the IRS at the end of the year. A landscaper who buys lawn fertilizer a couple of times a month will now be forced to issue 1099s to the companies they do business with, and no one is excluded. The law applies equally to businesses and churches and charities and even State and local governments.

A recent cnnmoney.com article suggests that the cost of the new paper trail could literally swamp small companies. One small business organization conducted a survey and found

that their members currently average about 10 1099 filings per year. The new rules would push that average to more than 200 filings--200 filings--per year, an almost 2,000-percent increase. Of course, their costs for that would skyrocket.

According to the National Federation of Independent Business:

At $74 per hour, tax paperwork is the most expensive paperwork burden placed on small businesses by the Federal Government.

Small businesses have been hit so hard by this recession, they just simply cannot afford this new burden. We need to give them a break. They are imploring us to do something to help them.

According to the National Taxpayer Advocate, which is part of the IRS, this provision will affect--get this--40 million businesses in the United States, including 26 million of our very smallest businesses, our sole proprietorships.

Americans are desperately searching for jobs. They want to work. These businesses should be focused on growing, not be wasting their resources on unnecessary paperwork that the government won't even utilize.

The amendment I introduced is clear. It simply repeals the section of the law requiring the extra paperwork. I might add, it is paid for. It identifies two areas within the health care law to fully offset the repeal of this mandate. First, by lowering the affordability exemption from the new individual mandate from 8 percent to 5 percent, fewer individuals will be subject to the individual mandate.

The new health care individual mandate infringes on individual freedoms of Americans and, in my view, it has constitutional problems. People who did not want to buy government-approved insurance in the first place are compelled to buy it under the new law. Thus, exempting more people, especially the poorest among us, from this absolutely ill-advised mandate is a good thing. These folks may be living paycheck to paycheck and requiring one more thing to come out of that paycheck instead of making the mortgage payment or buying the groceries is not right. Thus, allowing more people to decide for themselves whether they buy health insurance when they look at all their other obligations is a positive.

Let's be clear. My amendment does not restrict these individuals from buying health insurance or signing up for government subsidies. My amendment simply says, if they don't want to, they don't have to.

Second, the new health care law establishes a $15 billion, what I would regard as a slush fund for a long list of potential uses by the Obama administration, including the Community Transformation Grants Program. I generally support wellness programs. I believe in wellness. Who doesn't believe in wellness? However, concern has been raised that this fund will be used for a number of purchases that aren't specifically related to healthy outcomes. Thus, my amendment proposes that this fund not be allocated resources until 2018 to help offset removing this 1099 provision. It decreases the amount in this $15 billion fund; it doesn't eliminate it, but it does give us time to get it right. Besides, this delay gives us more time to ensure that only worthy projects utilize taxpayer money. These outlined pay-fors will cover any government revenue that might be lost by this ill-advised 1099 provision. With record deficits, we must be accountable for tax dollars, so this amendment is fully offset.

Small businesses generate 64 percent of our job growth in this country. We need them. We need them to move us toward economic recovery. Let's send a message that we want them to focus their time and money on hiring workers, on expanding our economy, not filling out unnecessary paperwork that even the IRS acknowledges is so overwhelming it will not be utilized.

My hope is, we will get a vote on this amendment later today, and I ask my colleagues to stand for small businesses, to stand by them, and to send the message to them that we want them creating jobs. I ask my colleagues to support this very commonsense amendment.

I yield the floor and I note the absence of a quorum.

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