To exempt certain amounts subject to other information reporting from the information reporting provisions of the Patient Protection and Affordable Care Act, and for other purposes.

SMALL BUSINESS LENDING FUND ACT OF 2010

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of H.R. 5297, which the clerk will
report.
The legislative clerk read as follows:

A bill (H.R. 5297) to create the Small Business Lending
Fund Program to direct the Secretary of the Treasury to make
capital investments in eligible institutions in order to
increase the availability of credit for small businesses, to
amend the Internal Revenue Code of 1986 to provide tax
incentives for small business job creation, and for other
purposes.

Pending:

Reid (for Baucus-Landrieu) amendment No. 4594, in the
nature of a substitute.
Reid (for Nelson (FL)) amendment No. 4595 (to amendment No.
4594), to exempt certain amounts subject to other information
reporting from the information reporting provisions of the
Patient Protection and Affordable Care Act.
Reid (for Johanns) amendment No. 4596 (to amendment No.
4595), to repeal the expansion of information reporting
requirements for payments of $600 or more to corporations.
Reid amendment No. 4597 (to the language proposed to be
stricken by amendment No. 4594), to change the enactment
date.
Reid amendment No. 4598 (to amendment No. 4597), of a
perfecting nature.
Reid motion to commit the bill to the Committee on Finance
with instructions, Reid amendment No. 4599 (the instructions
on the motion to commit), to provide for a study.
Reid amendment No. 4600 (to the instructions (amendment No.
4599) of the motion to commit), of a perfecting nature.
Reid amendment No. 4601 (to amendment No. 4600), of a
perfecting nature.

The ACTING PRESIDENT pro tempore. Under the previous order, the time
until 11 a.m. will be equally divided and controlled between the two
leaders or their designees.
Mr. BAUCUS. Mr. President, what is the pending business?
The ACTING PRESIDENT pro tempore. The pending business is H.R. 5297.
Mr. BAUCUS. That is the Small Business Act.
The ACTING PRESIDENT pro tempore. The Senator is correct.
Mr. BAUCUS. Am I correct in saying the time is equally divided before
the votes?
The PRESIDING OFFICER. The Senator is correct.
Mr. BAUCUS. Mr. President, I see my colleague. I have a statement to
make on the bill.
Mr. JOHANNS. Mr. President, I defer to the Senator from Montana.

[[Page S7053]]

Mr. BAUCUS. Mr. President, the Book of Ecclesiastes teaches: ``The
end of a matter is better than its beginning.''
In other words, getting something done is better than starting
something new. That is what a lot of folks are telling us these days.
They are telling us to get some things done. They are telling us to do
something to create jobs. They are telling us to enact legislation such
as the small business jobs bill before us today.

In America, the private sector creates the vast majority of jobs, and
in the private sector, small businesses are the principal engine of job
creation. Over the past 15 years, small businesses generated two-thirds
of new jobs. That is about 12 million new jobs. That is even more true
in my home State of Montana. In Montana, we have the largest share of
workers employed by small businesses of any State in the Nation. Nearly
4 out of 5 employees in Montana work in businesses with fewer than 10
workers, and 3 out of 5 employees in Montana work in businesses with
fewer than 5 workers.
The great recession has hit small businesses hard. Over the course of
the recession, small firms have incurred two-thirds of the net job
losses. We need to focus on small businesses as we seek to create jobs.
When we help small businesses, we help get Americans back to work, and
that is exactly what this small business jobs bill would do. This bill
would help small businesses get capital. This bill would make it easier
for small businesses to invest. This bill would promote
entrepreneurship. This bill would improve equity in the law. This is
exactly the kind of targeted job-creating legislation folks are telling
us to enact, and we ought to get it done. But before we can pass this
bill, we have to address the pending Johanns and Nelson amendments on
information reporting.
I urge my colleagues to oppose the Johanns amendment and support the
Nelson amendment, and let me explain why. The Johanns amendment would
repeal a tax-reporting provision enacted in the new health care law. No
matter what you think of the reporting requirement in the new health
care law, the offset in the Johanns amendment is a killer.
The Johanns amendment would go in the wrong direction. It would
expand the exemption from the responsibility to buy health insurance.
Fewer people would be responsible to buy health insurance. The
amendment would raise revenue because it would thus decrease the number
of people who receive Federal tax credits. Fewer Americans would get
insurance and fewer people would get tax credits to buy the insurance.
According to the nonpartisan Congressional Budget Office, the Johanns
amendment would increase premiums by up to 4 percent in the individual
market; that is, in the market for those who individually buy health
insurance. Their premiums would go up 4 percent, according to the
Congressional Budget Office, under the Johanns amendment.
The Johanns amendment would increase the number of uninsured by 2
million people--increase by 2 million the number of people who are
uninsured. Under the Johanns amendment, much of the cost of caring for
the uninsured would therefore continue to be shifted to people with
insurance, as it is today, and the premiums would continue to go up for
all the rest of us to pay for that.
By reducing the requirement for folks to buy insurance, the Johanns
amendment would make it so that the share of folks who buy insurance
who are sick would also increase, and that would make insurance
premiums go up as well.
We need to resist misguided efforts such as these to weaken the new
health care law. What is more, the amendment would also cut money set
aside for prevention in the new health care law, and that is a bad
idea. The Johanns amendment is a wolf in sheep's clothing. It is
dressed up as an attempt to help small businesses, but in reality it is
just another partisan effort to undermine the new health care law.
Let me take a few moments to address the information reporting
requirement which the Johanns amendment purports to address. Current
law, even before health care reform, requires all businesses to send a
form 1099 information return to all unincorporated service providers to
whom businesses pay $600 or more during the year. This information also
goes to the IRS. That is current law. That is before the health care
reform law. The new health care law expands this requirement to include
payments to corporations--not just service providers but to
unincorporated companies--as well as payments for goods and property
beginning in 2012. So this goes into effect, the provision in the
health care law, in 2012--not this year, not next year, but 2012. I
know it takes time and money for small businesses to comply with
information reporting requirements. I am very sympathetic to the
record-keeping burdens of small businesses. But the research
demonstrates that voluntary compliance doubles when information
reporting is in place. The rate rises from 46 percent compliance to 98
percent compliance. Information reporting does not increase taxes. Let
me say that again. It does not increase taxes. Rather, it keeps tax
rates lower. Why? Because more people pay the taxes they already owe.
Both the Bush administration and the Obama administration included
corporate information reporting among their tax compliance proposals.
But we do need to address this requirement, and the Nelson amendment is
an excellent start. The Nelson amendment directly addresses the
concerns small businesses are raising. First, the Nelson amendment
would completely exempt businesses with 25 or fewer employees from the
new reporting requirements for goods and property--a complete exemption
for a small business that has 25 or fewer employees. For businesses
with more than 25 employees, the Nelson amendment would raise the
threshold to report purchases of goods and property from $600 to
$5,000. The Nelson amendment would also take other steps to reduce the
burdens on small businesses.
The bottom line is this: We have heard the concerns of small
businesses. We hear it. I hear it. During the last month, I heard it
two or three times, and on this particular provision. But when I asked
about the Nelson solution, the people I talked to, the small
businessmen I talked to, and the accountants I talked to at home said:
Well, gee, maybe that might be OK.
We intend to work diligently to address and mitigate the concerns of
small businesses, and we are doing so with the Nelson amendment. The
Nelson amendment is the first step in that process. So I urge my
colleagues to support the Nelson amendment in response to the concerns
of small businesses. Those concerns are real, and the Nelson amendment
addresses them. But the offset in the Johanns amendment is a killer.
The Johanns amendment would raise health insurance premiums--raise
them. The Johanns amendment would result in fewer people having health
insurance--fewer. And the Johanns amendment would cut funding for
prevention--cut it. Those are results no one should want. I therefore
urge that the Johanns amendment be opposed, and I urge my colleagues to
vote against it.
Let's address these amendments and get something done, as
Ecclesiastes, in the Scriptures, suggests to us, let's do something to
create jobs, and let's enact this small business jobs bill today.
The ACTING PRESIDENT pro tempore. The Senator from Nebraska.
Mr. JOHANNS. Mr. President, I rise today to speak on behalf of the
amendment I offer, which is called the Johanns amendment. I think and
very respectfully I say that the Senator from Montana has really joined
the issues here. On one hand, we have this 1099 requirement, which no
business in America supports--none. We have this 1099 requirement that
every business association in America opposes. On the other hand, we
have a health care bill--passed on Christmas Eve, put together with no
bipartisan support--for which the President is demanding absolute
loyalty of his Members. He doesn't want anything changed. And that is
how the issue is joined today.
But I believe today that we in the Senate have an opportunity to take
a very clear and very decisive action that shows we mean what we say. A
vote to repeal the 1099 paperwork mandate fulfills the promise to clear
Federal roadblocks that are stopping small

[[Page S7054]]

businesses from expanding and putting Americans to work.
There have been a lot of promises from this administration and even
from this Congress to support small businesses, but America is coming
to the conclusion that the promises are empty. And this 1099 mandate in
the health care bill is a perfect example of why they are giving up
hope. You see, our small business owners, our medium-sized business
owners, and our large business owners are frustrated with nice speeches
that are followed by strangling regulation, new taxes, and really
absurd paperwork mandates. Small businesses want to expand, they want
to hire workers, and they want more customers. They do not like going
to a long-term employee and saying: I have to lay you off. I have had
employers talk to me about that literally with tears in their eyes. Yet
this tax paperwork mandate--hidden in the health care law, of all
things, in section 9006, page 700-something--requires businesses to
file a mountain of additional 1099 tax forms. It will consume resources
that could otherwise be spent on wages for new employees. It is an
undeniable example of the relentless hostility this administration has
toward the business community.
The Washington Post accurately summarized it this way:

As small businesses try to plot their recovery, attention
is turning to what many owners consider burdensome policies--
higher taxes, new accounting procedures and health-care
mandates.

That quote goes on to say:

Even as the government tries to help with an array of small
business initiatives, many owners say the intervention is as
much a hindrance to hiring as is the faltering economy.

You see, this type of uncertainty and fear only leads to a paralyzed
job market and, of course, anemic growth. Just look at what we have
piled on the backs of businesses in the last 18 months. Is it any
wonder they are sitting on capital? A so-called economic stimulus that
cost taxpayers $862 billion but failed to deliver on the promise of
keeping unemployment below 8 percent. Passage of a $2.6 trillion health
care bill that, when honestly scored, imposes an employer mandate--an
employer mandate--during one of the toughest economic times since the
Great Depression. It increases taxes in areas completely unrelated to
health care. A financial overhaul that increases small business burdens
and cost of compliance. Threats of card check, which the Chamber of
Commerce recently estimated will result in 600,000 lost jobs. And, of
course, the endless threat of an energy tax. A cap-and-trade proposal
that would result in increased production costs, harming America's
competitiveness in a global marketplace--shipping jobs to India and
China. To make matters worse, the uncertainty about the looming tax
increases--the largest in history--only compounds the worries
businesses are facing.
All of us traveled during the August break. I traveled across my home
State of Nebraska in August, and I heard from hundreds, thousands of
constituents. The message was plain and simple. In 14 townhalls across
the State, people said over and over again: Mike, go back there and
fight for us. And do you know what they were asking me to do? Protect
their businesses from Washington. Protect their businesses from
Washington.

We have an opportunity to do just that today by fully repealing the
1099 filing requirements. Our job creators will be able to focus their
time and energy on hiring and expanding, not dealing with mounds of
paperwork.
As the president of the Nebraska Federation of Independent Business
put it, and I am quoting from the chart:

You can't operate and grow your business if you are
spending all your time filling out IRS forms and haggling
with auditors.

In fact, there has been an outpouring of support from business owners
who are hoping that common sense will rule the day. The steady stream
of support letters and key vote letters Senate offices have received is
absolutely compelling evidence that our job creators feel very strongly
about repealing this nonsensical mandate. The U.S. Chamber of Commerce,
National Federation of Independent Business, and the National
Association of Manufacturers all support full repeal, to name a few.
But I could go on and on--the Farm Bureau, the National Restaurant
Association, the Public Accountants Association, veterinarians,
florists. There is no stopping here.
I think it is time Washington listen to the concerns of constituents
and businesses. They sure did not do that with the health care bill.
Here is a sampling of what businesses are saying. From the American
Rental Association:

The reporting requirement substantially and
disproportionately increases compliance burdens on all types
of small businesses.

Citizens Against Government Waste says:

With a ballooning $13.4 trillion federal debt and a
national unemployment rate that is around 10 percent,
lawmakers should be focused on providing relief to America's
businesses, encouraging job creation, and spurring economic
growth. The 1099 mandate is a major roadblock, discouraging
them from expanding and hiring.

The National Restaurant Association says this:

This new requirement will impose a significant burden on
restaurants across the country.

The International Franchise Association says:

The paperwork filing burden associated with this provision
will be too great for many small businesses to comply and
could lead to inaccurate filings that may trigger audits and
penalties.

Finally, the Coalition for Fairness in Tax Compliance says:

The Johanns amendment is the only solution that fully
protects small businesses.

They go on to speak to the Nelson amendment, and I am quoting again:

The Nelson amendment does not remove the paperwork and
administrative burden that is created by this new law.
Instead, the Nelson alternative further complicates
compliance responsibilities . . . rather than clarify. The
Nelson amendment actually creates even greater complexity for
those who comply with the law.

Businesses could not be more clear. Today are we going to turn our
deaf ear to the job creators in America? Are we going to stand with the
President, who does not want anybody fiddling with his health care
reform, or are we going to stand with small businesses?
This is a vote to put Americans back to work by freeing up our small
businesses to expand and hire. It is as simple as that. Let's not force
our job creators to fight the greatest battle they are fighting, which
is the battle against Washington and its endless appetite for
regulation and spending.
We have talked about support for our small businesses. Let's stand
behind them. I want to remind my colleagues that, according to analysis
by one business group, this mandate is likely to increase the 1099s
that businesses file by a whopping 2000 percent. Let's listen to the
loud voices of an endless line of businesses pleading with us to repeal
this job-killing mandate.
I hope my colleagues across the aisle will reject the arm twisting
that is going on by the White House to preserve at all costs the health
care law and every word of it, every dotted i and every crossed t, even
at the expense of American jobs. I ask you to vote in favor of the only
bipartisan amendment you will vote on today, the Johanns-Lincoln
amendment, a bipartisan approach, the only real fix to a 1099 nightmare
created by the health care law.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Montana.
Mr. BAUCUS. Mr. President, I will yield 8 minutes to my good friend
from Florida, who has come up with a very good idea to resolve this
question.

Amendment No. 4595, As Modified, and Amendment No. 4596, As Modified

Mr. NELSON of Florida. If it is OK with the chairman of the
committee, we have a unanimous consent that has been agreed to on both
sides.
Mr. President, I ask unanimous consent that the pending amendments,
No. 4595 and No. 4596, be modified with the changes at the desk.
The ACTING PRESIDENT pro tempore. Is there objection?
The Senator from Nebraska.
Mr. JOHANNS. Mr. President, reserving the right to object, let me
take a moment to analyze what the Senator has proposed.
We have no objection.
The ACTING PRESIDENT pro tempore. Hearing no objection, it is so
ordered.
The amendments, as modified, are as follows:

[[Page S7055]]

amendment no. 4595, as modified

At the end of subtitle B of title II, add the following:

PART V--ADDITIONAL PROVISIONS

SEC. ___. CERTAIN EXCEPTIONS TO INFORMATION REPORTING
PROVISIONS.

(a) In General.--Section 6041 of the Internal Revenue Code
of 1986, as amended by section 9006 of the Patient Protection
and Affordable Care Act and section 2101 of this Act, is
amended by redesignating subsection (j) as subsection (k) and
inserting after subsection (i) the following new subsection:
``(j) Coordination With Returns Relating to Payment Card
and Third Party Network Transactions.--This section shall not
apply to any amount with respect to which a return is
required to be made under section 6050W.''.
(b) Increase in Threshold Amount and Exemption for Small
Employers for Reporting of Certain Payments.--Subsection (a)
of section 6041 of the Internal Revenue Code of 1986, as
amended by the Patient Protection and Affordable Care Act, is
amended by adding at the end the following new sentences:
``In the case of payments in consideration of property, this
subsection shall be applied by substituting `$5,000' for
`$600' and this subsection shall not apply in the case of any
person employing not more than 25 employees at any time
during the taxable year. In the case of any payment to a
corporation which is not an organization exempt from tax
under section 501(a), this subsection shall not apply in the
case of any person employing not more than 25 employees at
any time during the taxable year. For purposes of the two
immediately preceding sentences, all persons treated as a
single employer under subsection (b), (c), (m), or (o) of
section 414 shall be treated as one employer.''.
(c) Regulatory Authority.--Subsection (k) of section 6041
of the Internal Revenue Code of 1986, as redesignated by
subsection (a), is amended by striking ``including'' and all
that follows and inserting ``including--
``(1) rules to prevent duplicative reporting of
transactions, and
``(2) rules which identify, and provide exceptions for,
payments which bear minimal risk of noncompliance.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to amounts with
respect to which a return is required to be made in calendar
years beginning after December 31, 2010.
(2) Property threshold.--The amendment made by subsection
(b) shall apply as if included in the amendments made by
section 9006 of the Patient Protection and Affordable Care
Act.
(e) Public Comments and Suggestions.--In order to minimize
the burden on small businesses and to avoid duplicative
information reporting by small businesses, the Secretary of
the Treasury or the Secretary's designee is directed to
request and consider comments and suggestions from the public
concerning implementation and administration of the
amendments made by section 9006 of the Patient Protection and
Affordable Care Act, including--
(1) the appropriate scope of the terms ``gross proceeds''
and ``amounts in consideration for property'' in section
6041(a) of the Internal Revenue Code of 1986, as amended by
such section 9006,
(2) whether or how the reporting requirements should apply
to payments between affiliated corporations, including
payments related to intercompany transactions within the same
consolidated group,
(3) the appropriate time and manner of reporting to the
Internal Revenue Service, and whether, and what, changes to
existing procedures, forms, and software for filing
information returns are needed, including electronic filing
of information returns to the Internal Revenue Service,
(4) whether, and what, changes to existing procedures and
forms to acquire taxpayer identification numbers are needed,
and
(5) how back-up withholding requirements should apply.
(f) Timely Guidance.--The Secretary of the Treasury is
directed to issue timely guidance that will implement and
administer the amendments made by section 9006 of the Patient
Protection and Affordable Care Act in a manner that minimizes
the burden on small businesses and avoids duplicative
reporting by small businesses.
(g) Reports to Congress.--
(1) In general.--Prior to the effective date of the
amendments made by section 9006 of the Patient Protection and
Affordable Care Act, the Secretary of the Treasury shall
report quarterly to Congress concerning the steps taken to
implement such amendments, including ways to limit compliance
burdens and to avoid duplicative reporting. Such reports
shall include--
(A) a description of actions taken to minimize, reduce or
eliminate burdens associated with information reporting by
small businesses, and
(B) a description of business transactions exempted from
reporting requirements to avoid duplicative reporting or
because such transactions represent minimal compliance risk.
(2) Comparison.--Not later than 6 months prior to the
effective date of the amendments made by section 9006 of the
Patient Protection and Affordable Care Act, the Secretary of
the Treasury shall report to Congress a comparison of the
expected compliance requirements after the implementation of
such amendments to the compliance requirements under section
6041 of the Internal Revenue Code of 1986 prior to the
effective date of such amendments.

SEC. ___. DENIAL OF DEDUCTION FOR MAJOR INTEGRATED OIL
COMPANIES FOR INCOME ATTRIBUTABLE TO DOMESTIC
PRODUCTION OF OIL, GAS, OR PRIMARY PRODUCTS
THEREOF.

(a) In General.--Subparagraph (B) of section 199(c)(4) of
the Internal Revenue Code of 1986 is amended by striking
``or'' at the end of clause (ii), by striking the period at
the end of clause (iii) and inserting ``, or'', and by
inserting after clause (iii) the following new clause:
``(iv) in the case of a taxpayer which is a major
integrated oil company (as defined in section 167(h)(5)(B)),
oil related qualified production activities (within the
meaning of subsection (d)(9)(B)).''.
(b) Conforming Amendment.--Section 199(d)(9)(A) of the
Internal Revenue Code of 1986 is amended by inserting
``(other than a major integrated oil company (as defined in
section 167(h)(5)(B))'' after ``taxpayer''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

amendment no. 4596, as modified

In lieu of the matter proposed to be inserted, insert the
following at the appropriate place insert the following:

PART IV--ADDITIONAL PROVISIONS

SEC. 4271. REPEAL OF EXPANSION OF INFORMATION REPORTING
REQUIREMENTS.

Section 9006 of the Patient Protection and Affordable Care
Act, and the amendments made thereby, are hereby repealed;
and the Internal Revenue Code of 1986 shall be applied as if
such section, and amendments, had never been enacted.

SEC. 4272. EXPANSION OF AFFORDABILITY EXCEPTION TO INDIVIDUAL
MANDATE.

Section 5000A(e)(1)(A) of the Internal Revenue Code of 1986
is amended by striking ``8 percent'' and inserting ``5
percent''.

SEC. 4273. USE OF PREVENTION AND PUBLIC HEALTH FUND.

(a) Use of Funds as Offset Through Fiscal Year 2017.--
Section 4002(b) of the Patient Protection and Affordable Care
Act is amended by striking ``appropriated--'' and all that
follows and inserting ``appropriated, for fiscal year 2018,
and each fiscal year thereafter, $2,000,000,000''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the enactment of section
4002 of the Patient Protection and Affordable Care Act.

SEC. 4274. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

The percentage under paragraph (2) of section 561 of the
Hiring Incentives to Restore Employment Act in effect on the
date of the enactment of this Act is increased by 4.25
percentage points.

Mr. NELSON of Florida. Mr. President, we are down now to passing what
we have tried to pass so many times, this small business assistance
bill, which is going to create a $30 billion lending facility that will
work through community banks. The small business lending fund will
generate $300 billion of loans that will specifically be targeted to
small businesses to help get our country moving again economically.
This is huge. But right now we are stuck on this issue of whether
businesses are going to have to file these 1099 forms anytime they make
purchases of goods.
The Senator from Nebraska wants to eliminate all of the new
information reporting rules. That is a salutary result. But how does he
propose to do it? He has to come up with a way to pay for it. The
underling law raises about $17 billion, so he has to come up with a
pay-for if he is going to repeal it. Where does he get it? He basically
goes directly at the health care bill, the reform bill, and he starts
to gut the health care reform bill.
This Senator does not think that is a very good idea, particularly
since what the Senator from Nebraska is gutting is the subsidies that
allow people to purchase health insurance who presently are uninsured.
The amendment of the Senator would reduce the number of people that
purchase coverage through the health insurance exchange. These are
uninsured people whom we want to have private health insurance, 2
million of them in this country who otherwise would go into their State
health insurance exchange and be able to purchase health insurance with
some assistance because of their income level.
The amendment of the Senator involves a complicated formula. It
actually gets at a provision in the current health reform law that says
if your health premiums are going to be above 8 percent of your annual
income, you do not have a responsibility to purchase health insurance.
The Senator from Nebraska drops that to 5 percent, which means that 2
million people in

[[Page S7056]]

this country are not going to go into these health insurance exchanges
and purchase health insurance.
By the way, what is going to happen? They are still going to get
health care if they do not have health insurance. Where are they going
to get it? They are going to get it at the most expensive place at the
most expensive time; that is, when they get sick they are going to go
to the emergency room. If they do not have health insurance, guess who
is going to pay. All the rest of us are going to pay, which was part of
the reason for the health reform bill in the first place. It was to get
32 million people in this country who are not insured into the health
insurance system so that you spread that health risk over more people.
That is 32 million people who are going to come into the health
insurance system and pay for their care, instead of just those who
currently have health insurance.
The whole idea was to get more people into the system--more people
paying insurance, more people with health insurance so they receive
preventive care and so they do not wait around until the sniffles have
turned into pneumonia and they have to go to the emergency room. If
they don't have health insurance, everybody else pays for them.
What the Senator from Nebraska is doing is he is driving a stake into
the heart of the health insurance reform bill by taking 2 million
people out of that pool, people who are uninsured, who otherwise would
be getting health insurance. That is the essence of this; otherwise,
the Senator from Nebraska and I agree. We want to stop this nonsense of
the harassment of every time you make a purchase of a good, some
equipment, et cetera, that you have to file a 1099 because the other
guy on the other end who is selling you that good is not going to
report the income. We would both prefer to eliminate all of that.
The amendment of this Senator says, first of all, if you are a small
business, if you are 25 employees or less, you are not going to have to
worry about that requirement at all. Second, this Senator says that if
you have 26 or more employees, you are not going to have to file that
1099 form when you purchase equipment unless it is over $5,000 of
value. Third, if it is a credit or debit card transaction, no
information reporting by the business would be required, period.
Is that too much to ask in order to help get people to pay the income
tax that they owe, people who are now getting out of it to the tune of
$17 billion? If somebody is not paying their income tax, is that fair?
No, it is not. So in tightening up the law we are going to get people
to pay their income tax, but we are going to do it in a way that is not
harassing any business, and particularly small businesses, because we
are going to exempt them if there are 25 employees or less.
The long and short of it is if the amendment of the Senator from
Nebraska, which is going to be voted on first, is not agreed to, then
we come to the amendment of this Senator. You may want to eliminate
everything. But if his amendment----
The ACTING PRESIDENT pro tempore. The time of the Senator has
expired.
Mr. NELSON of Florida. Oh, goodness. I will conclude by saying if his
amendment does not pass, then you have a viable alternative with the
Nelson amendment.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Nebraska.
Mr. JOHANNS. May I inquire how much time on this side is left?
The ACTING PRESIDENT pro tempore. The Senator from Nebraska has 11
minutes 14 seconds.
Mr. JOHANNS. I will defer to the Senator from Wyoming for 3 minutes,
and yield 3 minutes of my time.
The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
Mr. ENZI. Mr. President, I just heard the discussion about this bill.
I know in the health care bill we hired 16,000 more IRS agents. If we
hired 16,000 more IRS agents, we should not need a whole bunch more
paperwork for small businesses to do, to see if they are being honest.
This is going to cost a fortune for small business, even if you go to
the $5,000 level, because you have to keep track of how much you buy
from every supplier. You have to see if you hit the $600 or $5,000
mark. That is a cost to business with no benefit. I do not think it is
going to wind up with the kind of benefit they are talking about in
raising revenue to finance health care.
As far as the mandate to buy insurance, I am not in favor of the
mandate to begin with. But it mandates that they spend 8 percent of
their income on health insurance. This reduces it to 5 percent of their
health care. I think that is a pretty big mandate all in itself.
But during the last month, my wife and I traveled around Wyoming. We
visited small businesses. We looked to see what their problems were. I
do that to get a sense of what Federal legislation is going to do to
help or hinder them. I want to see firsthand the struggles they deal
with. Every business looks simple until you have to make the decisions
that deal with that business.
The last thing we want to do in Washington is hurt those businesses
by passing legislation that takes resources away from growing
businesses and puts it into more paperwork. We also should not be
passing legislation using regulation that stymies new jobs and causes
uncertainty about what will come out in the near future.
Unfortunately, I think that is exactly what happened in the health
care reform law that was enacted earlier this year. Today, we have a
chance to fix it. Although the health care reform battle may be in the
rearview mirror for some of you, it is the small businesspeople in our
hometowns who continue to bleed from it.
The provision I am referring to will require business owners to
submit onerous and duplicative 1099 forms for every single business-to-
business transaction over $600. Even $5,000 does not solve the problem.
This includes anything from utilities, office supplies, construction
materials. There are ways to audit that anyway. This is just trying to
do an easy thing and putting a whole burden on businesses. So everybody
on Main Street will have to do 200 to 2,000 of these 1099s depending on
which one of these forms you go with. Repealing it is the best way to
do it.
Something else that is not mentioned is they have to get the
taxpayer's ID number. If you are a small businessman, a really small
businessman, your taxpayer ID is your Social Security number. How
willing are you going to be to give your Social Security number to some
kid that bought $600 worth of gas so he could mow lawns over the
summer? If he does not get the taxpayer number, he is supposed to
withhold 28 percent of the payment.
Most businesses don't have personal accountants on hand to file these
forms so they will need to hire someone just to file paperwork. This is
the kind of onerous paperwork burden that will distract small
businesses from doing day-to-day business, providing much-needed jobs
and stimulating the economy.
Many of my colleagues have joined me in co-sponsoring the Small
Business Paperwork Mandate Eliminate Act to fix this problem, and today
I urge them to join me in supporting Senator Johanns' amendment. The
Johanns amendment eliminates the onerous section of the law and pays
for it in a responsible way. While I appreciate the Senator from
Florida would like to exempt businesses with under 25 employees, this
exemption actually encourages businesses to stop growing so they aren't
burdened with onerous bureaucratic regulations, and the method he uses
to offset his amendment will lead to increased energy prices and fewer
American energy jobs. My biggest surprise over the August recess was
the number of businesses that have heard of this requirement. They know
and they are mad. One more requirement that doesn't bring in a single
dollar and has a huge cost!
I urge all Senators to help the businesses in their State and make
sure this section is repealed by supporting the Johanns amendment. You
don't have to be a Republican and you don't have to be a Democrat to
know that this is something we need to do. To know that, you just have
to ask the business people you represent in your home State.
Let's take a sandbag off the backs of the small business people. We
know repeal will be better for them, our States and our country. Surely
we can find a way together to do this one small thing

[[Page S7057]]

that will make such a huge positive impact on those we serve.
The ACTING PRESIDENT pro tempore. The time of the Senator from
Wyoming has expired.
Mr. ENZI. I think we can see what a terrible error it is to have this
in the bill at all. I hope we will repeal it.
I yield the floor.
Ms. SNOWE. Mr. President, I rise today in support of the Johanns
amendment to repeal an onerous mandate included in the health reform
bill that would require millions of businesses to send billions of new
information reporting forms to the IRS and other businesses. If Senator
Johanns' amendment is not adopted here in the Senate, every business in
America, starting in 2012, must report to the IRS on business purchases
that exceed a threshold of only $600 per vendor or supplier--for
purchases of supplies and equipment, and also services ranging from
cell phone coverage to window washing to utilities.
This new mandate was imposed in the health reform law, yet it has
absolutely nothing to do with health insurance reform. What it does is
make the Federal Government a more intrusive and burdensome presence in
every aspect of American business--which is the very last thing
American business needs during these tumultuous economic times. What
small firms are clamoring for is certainty. They need the Federal
Government to help foster an entrepreneurial environment under which
they can do what they do best--create new jobs--and not saddle them
with an incessant and unnecessary paperwork burden like this new 1099
filing requirement.
Most Americans recognize forms 1099 as the statements they get from a
financial institution when they earn interest on savings or from their
mortgage lender for the deductible interest the borrower pays to a bank
or credit union for their home mortgage. The purpose of these 1099s is
to accurately report income or deductions for a particular tax year so
that income is appropriately taxed that year.
However this new system of 1099s does not have anything to do with a
direct tax liability in a given year--instead, this reporting regime
will allow the IRS to track business purchases that exceed $600.
Businesses typically have an intense focus on carefully tracking their
sales to customers with marketing professionals. Rather than tracking
sales to customers, this new government mandate will force a change in
business focus to a detailed accounting of purchases from suppliers.
While controlling costs is clearly a vital component of business
profitability, this new government mandate on cost accounting and
reporting to the IRS is an inordinate shift of priorities that will
harm competitiveness and profitability because it will shift focus and
resources away from customers.
A separate dimension of this new cost accounting mandate is that
purchases will also have to be separately tracked by type of payment
because only payments made by check and cash would be reported on a
1099 but payments by credit card would be excluded from this mandate
and misreporting transactions by including credit card purchases might
be subject to penalties. So for each supplier from which aggregate
purchase might exceed $600 per year, purchases would have to be tracked
by payment method. For instance, a construction contractor would have
to make sure that employees know to use only a credit card at Home
Depot but at the local lumber yard to only pay by check or invoice.
The intent of this 1099 provision may have been to track the cash
flow of businesses that operate in a cash economy in order to root out
those that do not pay taxes. Ensuring that tax cheats pay their taxes
is an admirable and necessary function of government. However, instead
it has become clear that this provision could simply further expand the
cash economy. The very businesses that currently evade taxation are not
likely to become compliant with this new burdensome reporting regime.
In fact, a predominantly cash-based business will likely further
retrench and thrive absent both tax liability and the new reporting
regime while tax compliant businesses either muddle through or fail
under this new burden. For instance, a small plumbing business or a
roofing business would likely thrive by simply working in an all-cash
system for residential customers and evading both income taxes and
information reporting while a similar business attempting to comply
with tax liability and compliance would struggle.
For the small businesses that attempt to comply with this tax
reporting mandate, this paperwork burden will be imposed with a
crushing effect. New tracking systems will have to be implemented for
purchases in order to ensure that aggregated purchases exceeding $600
are reported to the IRS. In fact, according to an NFIB Small Business
Survey, at $74 an hour, tax paperwork is the most expensive paperwork
burden placed on small businesses by the Federal Government. The Small
Business Administration has found that the cost of tax compliance is
already 67 percent higher in small firms than in large firms. Because
this new 1099 reporting burden would be so ubiquitous for firms
attempting to be compliant--by requiring new processes of making
business purchases and tracking of business purchases--this compliance
cost statistic is likely to be woefully outdated and more onerous.
I fully expect the new Chief Counsel for Advocacy at the Small
Business Administration, Winslow Sargeant, who President Obama recently
recess appointed, to assess this new paperwork mandate and have his
office recalibrate that statistic on cost of tax compliance which was
last updated in 2005. Dr. Sargeant will also have the opportunity to
fully use his office--the independent, ``regulatory watchdog'' for
small business--to comment, by September 29, to a Treasury Department
and IRS request for information on these expanded 1099 filing
requirements. I want to quote from the SBA web site about the mission
of the Office of Advocacy:

In 1976, the U.S. Congress created the Office of Advocacy
within the U.S Small Business Administration to protect,
strengthen and effectively represent the nation's small
businesses within the federal government's legislative and
rule-making processes. The Office of Advocacy works to reduce
the burdens that federal policies impose on small firms and
maximize the benefits small businesses receive from the
government. Advocacy's mission, simply stated, is to
encourage policies that support the development and growth of
American small business.

I expect Dr. Sargeant to fulfill his duties as the Chief Counsel for
Advocacy by serving as a strong voice in this IRS rulemaking. In
voicing the concerns of small businesses, Dr. Sargeant would be
standing shoulder to shoulder with the IRS National Taxpayer Advocate,
Nina Olson, who has stated that the administrative costs to small
businesses of this provision are so high that it ``may turn out to be
disproportionate as compared with any resulting improvement in tax
compliance.''
Separate from the burden of compliance, I fear the onerous and
pervasive nature of this mandate, for it will surely change business
purchasing decisions and disadvantage small businesses. Should the
Johanns amendment to repeal this provision not be adopted, it would
incentivize centralized purchasing from large integrated companies and
away from smaller specialized ones. Rather than a roofing company
putting out a bid to different suppliers for materials, this new
government mandate would be another reason to consolidate purchasing in
order to ease paperwork burdens of the 1099 process. With fewer
businesses willing to put out bids to a wide variety of suppliers, a
constricting spiral will take effect resulting in fewer and fewer
specialty suppliers. While large big-box retailers serve a critical
role, they don't need to have the heavy hand of government pushing
customers through their doors instead of through the local building
supply business or local office supply businesses. This further
consolidation of suppliers is bad for innovation, bad for price
competition, and bad for small business.
No wonder a broad coalition of businesses has come together to form
the Coalition for Fairness in Tax Compliance. This group includes
dozens and dozens of business organizations including Washington
mainstays such as the National Federation of Independent Business, the
National Association of Manufacturers, the Associated Builders and
Contractors, the National Restaurant Association, and the US Chamber of
Commerce, to groups as varied

[[Page S7058]]

as the Electronic Security Association, the Independent Community
Bankers of America and the American Road & Transportation Builders
Association.
Finally, I want to turn to an aspect of this issue that has not been
discussed widely. The process of tracking business-to-business
purchases, aggregating information on purchase prices and then
reporting this information to the IRS on those purchases would largely
put in place the infrastructure for a value added tax--or VAT--tax
system. A typical value added tax is a credit-invoice method system
where one business tracks the purchases it makes from others and then
when it sells goods, it remits a tax for the increase in value of those
goods. The increase in value is through either a manufacturing process
or by adding value through a retail sale of goods.
A VAT depends upon reporting the price of goods purchased and sold.
Imposing a system whereby virtually every business-to-business sale of
goods or services is aggregated and reported to the IRS certainly puts
in place all of the infrastructure of a VAT. This provision would be
implemented and become effective in 2012. It would certainly take a
year to two for taxpayers and the IRS to work through all of the
administrative hassles associated with its implementation. By 2014,
when the health benefit subsidies become effective, all of the
machinery necessary for a VAT would be functioning and the machine
would simply have to be turned on to start generating the money
necessary to pay for these benefits at a time when our national
deficits are likely to continue at atrocious levels.
Early in the debate for health reform, Obama advisers were proponents
of a VAT to fund health reform, but were quickly publicly disavowed.
Even in the Senate, last April, I joined 84 colleagues on the floor in
April to repudiate the concept of a VAT. Putting in place the machinery
of a VAT to not expect that machinery to be switched on is a test of
faith that millions of small businesses across America are not willing
to take.
We cannot tinker with this 1099 provision. We cannot amend this
provision. We cannot leave a vestige of it to sprout in the future. We
must repeal it. Now. I urge my colleagues to support the Johanns
amendment and oppose the Nelson amendment.
Ms. MIKULSKI. Mr. President, I rise today to express my strong
support for repealing the 1099 tax form requirement enacted in the
Affordable Care Act. This requirement is burdensome for businesses in
Maryland, especially small businesses. The 1099 tax provision requires
businesses to report information on anyone they pay $600 or more to for
goods in a year. Businesses will also have to send copies of the form
to their vendors, suppliers and contractors. This requirement is costly
and burdensome to businesses.
Although I agree that we must ease the hassle faced by businesses, we
must be careful about how we pay for this. The Johanns amendment to the
Small Business Jobs and Credit Act repeals the new 1099 tax reporting
requirement, yet could end up increasing health care costs and cost
small businesses even more as a result of higher health expenditures.
The Johanns amendment eliminates funding for prevention programs such
as providing immunizations and screenings for diseases like cancer,
heart disease, and diabetes. By catching diseases earlier and reducing
the incidence of chronic disease, prevention programs lead to cost
savings which lower the cost of health insurance for small businesses.
That is why I support the Nelson amendment which provides a more
affordable alternative. The Nelson amendment reduces the burden faced
by businesses by eliminating the 1099 reporting requirement all
together for businesses with 25 employees or less. It also raises the
reporting threshold to anyone paid $5,000 or more for purchased goods
in a year in a way that is affordable. This will help over 85 percent
of businesses in Maryland.
I am also a cosponsor of Senator Landrieu's Information Reporting
Modernization Act. Senator Landrieu chairs the Small Business Committee
and her bill would simplify and modernize 1099 reporting requirements
so that nothing paid for with credit or debit cards would need to be
reported and the $5,000 threshold amount for reporting established in
the bill could be adjusted and increased every year for inflation. I
will continue to support lessening the burdens faced by small
businesses and help lower their costs.
Mr. FEINGOLD. Mr. President, I am pleased to vote for the motion to
invoke cloture on Senator Bill Nelson's amendment to ease reporting
requirements on small businesses, which are the engine of our economy.
Unlike Senator Nelson's commonsense amendment, which was paid for by
taking away a tax break from big oil, Senator Johanns's alternative
proposal would deny health insurance for roughly 2 million Americans
and raise insurance premiums for many more. We can and should help
small businesses without making health insurance more expensive and
less accessible.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. BAUCUS. Mr. President, how much time do I have remaining?
The ACTING PRESIDENT pro tempore. The Senator has 5 minutes 45
seconds remaining.
Mr. BAUCUS. I yield 5 minutes 45 seconds to the Senator from Iowa.
Mr. HARKIN. I thank my friend from Montana for yielding me this time.
Mr. President, the Johanns amendment would kill--would kill--the
Prevention and Public Health Fund that we have established for our
American citizens. Chronic diseases are one of the main reasons health
care costs have increased so dramatically over the past several
decades.
This chart shows it. In 2005 we spent $2 trillion on health care. For
every dollar spent, we spent 75 cents treating people who had a chronic
disease. But we spent four pennies on prevention--four pennies on
prevention--and 75 cents out of the dollar treating them.
This second chart shows what has happened from 1987 to now: a $314
billion increase in spending on all health care. Two-thirds of the
increase went to take care of people who had chronic illnesses.
Most of this is preventable. That is why we know, and we have good
data to show, that for every dollar we spend on prevention and wellness
we get a great return. For every dollar spent on childhood
immunization, we get a $16.50 return. For every smoking cessation
program for pregnant women, $6; chronic disease prevention overall,
$5.60. Even tuberculosis screening, for every dollar we spend we get
more money back in savings because we are not treating people with
chronic illnesses.
So, again, why would we want to gut this program? But that is what
the Johanns amendment does. It says the Prevention and Public Health
Fund that we established in health care, which had support from both
sides of the aisle--I think regardless of how anyone felt about the
final version of the health care reform bill, I found no one who wanted
to go after the Prevention and Public Health Fund because we all
recognized this is the path to our future: keeping people healthy in
the first place.
So we have this established. We have the fund established. The
Johanns amendment guts it. It says no money; no money for prevention,
no money for wellness until 2018. Well, we will just let people
continue to get chronic illnesses, chronic diseases, and we will take
care of them later.
Remember what Benjamin Franklin said: An ounce of prevention is worth
a pound of cure. Our mothers were right when they told us that. We
finally have realized that in our society. Ask the medical community.
Ask the nurses. Ask anyone. They will tell you we need to put more
money into prevention and wellness programs across the board.
That is what we designed. That is what we put in the health care
bill. It was broadly supported on both sides of the aisle. Yet
regardless of whatever benefits the Johanns amendment may have--and,
quite frankly, I tend to sympathize with the problems that were raised
about paperwork on small businesses--this is not the place to rob the
money. This is the worst place from which to take the money. I do not
know why my friend from Nebraska saw fit to take money out of something
that is going to save us money, save lives, and cut down on needless
human suffering in the future. Think of all of the people who will be
cut off of smoking, people who will have wellness programs, screening
programs for the elderly that will start now. Every senior

[[Page S7059]]

citizen can go in and get on Medicare, get an annual free checkup, and
a personalized medical plan to keep them healthy. Free mammograms,
childhood screenings--all part of getting ahead of the curve rather
than just treating people after they get sick.
I have looked at that amendment. I have looked at the Nelson
amendment. It seems to me the Nelson amendment does basically do the
same thing in terms of helping our small businesses. So I think the
Nelson amendment is the way to go because it does eliminate any
reporting burden on the great majority of small businesses, those with
less than 25 employees at any point in the year. But, most importantly,
it does not take money out of the Prevention and Public Health Fund. It
does not gut it.
So, as I say, regardless of whatever benefits you may think the
Johanns amendment has, it is the wrong place to get the money,
absolutely the wrong place. So I ask my colleagues, if you really want
to help small businesses and not gut the one thing in health care that
is going to bend the cost curve, bend the cost curve, keep people
healthy, cut down on all of this money we are spending to take care of
people when they get sick, the best way to do that is to support the
Nelson amendment which does both: keeps the Prevention and Public
Health Fund intact, and yet helps our small businesses. To me, that is
the right process to take.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Nebraska.
Mr. JOHANNS. How much time remains?
The ACTING PRESIDENT pro tempore. There is 7 minutes 45 seconds
remaining.
Mr. JOHANNS. I yield 3 minutes to the Senator from South Dakota, Mr.
Thune.
Mr. THUNE. Mr. President, when the health care reform bill passed,
the Speaker of the House famously said: We have to pass this bill so we
can figure out what is in it.
Well, what more and more Americans are finding when they look at what
is in it are things they do not like. This is becoming increasingly
less popular over time, and one of the most egregious provisions in
this bill is this 1099 provision.
The Senator from Iowa is worried about making sure more people have
access to health care. We all are. Well, the best way for most
Americans to get access to health care, because most Americans still
get their health care coverage through their employers, the best way to
get health care coverage is to get a job. This provision kills jobs.
This is directly targeted at small businesses, the economic engine,
the job creators in America today. So what the Senator from Nebraska is
trying to do is to correct this by repealing this onerous compliance
burden that we are placing on the small businesses of this country. It
is not the tax delinquents who get hurt by this, it is the hard-working
small businesses. It is the charities. It is the government agencies
who have to deal with this burdensome paperwork.
That, I think, is why we have so many organizations. We have
agricultural organizations such as the American Farm Bureau, the Corn
Growers, the Soybean Growers, the Cattlemen, and go right down the
list. We have small business organizations such as the Chamber of
Commerce, the National Federation of Independent Business, the National
Association of Manufacturers, the National Association of Home
Builders, the International Food Service Distributors, the Restaurant
Association, and the Associated General Contractors that support repeal
because it would hurt both their employees and their bottom line.
We even have government organizations such as the National
Association of Towns and Townships, which represents local governments.
They support repeal because it would force cities and communities to
keep track of every purchase they make whether it be cement, snowplows,
or pencils. This is a ridiculous requirement that we are imposing, in
many cases, on small businesses, on small charities, on small
organizations, and local governments.
I can tell you from personal experience, in my State this is
something they cannot comply with and cannot deal with. So if we are
worried about job creation in this country, if we are worried about
economic growth, this is absolutely the wrong way to go about promoting
it.
What the Johanns amendment does is repeal this provision. It does it
in a fiscally responsible way. It is offset, it is paid for, and it
makes sense. I hope my colleagues will vote for this commonsense
amendment because whether this was an intended consequence or an
unintended consequence, this is absolutely disastrous for small
businesses across this country, and it is essential that we get this
part of the health care reform bill repealed.
There are many others I think we are probably going to be talking
about before this is all said and done because, as I said, the more
people read the fine print in this legislation, the more they come to
the realization of how bad this is for small businesses and for job
creation in this country.
So I would urge all of my colleagues to vote for the Johanns
amendment and to repeal this onerous provision.
The ACTING PRESIDENT pro tempore. The Senator from Nebraska.
Mr. JOHANNS. Mr. President, I yield 3 minutes to the Senator from
Missouri, Mr. Bond.
Mr. BOND. Mr. President, the distinguished Senator from Montana, the
chairman of the Finance Committee, earlier this morning said small
businesses are the engine that drives jobs in the economy. I agree with
him. I agree.
As the former chairman of the Small Business Committee, I know how
important small businesses are. I traveled around the State during the
past breaks to find out, meeting with small businesses, why they are
not creating jobs. We, frankly, have cut off the fuel supply, the
profits that drive these jobs.
I asked a group of small businesses: Why is it that you are not
creating jobs? Is it because of the uncertainty people are talking
about? I was immediately corrected.
They said: It is the certainty. We know what you have done in the
health care law, putting unbelievable burdens on us.
They did not even know about this 1099 requirement at the time. But
the health care costs are burdening small businesses, and it is making
it impossible and unwise for them to try to hire. I talked to a small
businessman today, and I asked him about it. I told him what the
requirements were. He said: That is nuts. What do you think they are
talking about? We are going to have to hire more bookkeepers.
Unfortunately, my colleagues on the other side of the aisle refuse to
listen to small businesses in passing this bill. They put burdens on
them that are unbelievable. The new health care bill passed and signed
into law is a boondoggle that will bury small businesses in higher
taxes, new mandates, and more paperwork.
This particular job-killing mandate of the 1099 we are debating today
will drown small businesses in paperwork by requiring a small business
owner to file two forms, one with the vendor and one with the IRS, for
every business-to-business transaction over $600.
According to the Wall Street Journal this morning, this means more
than 30 million small businesses will be hit by the new paperwork
mandate beginning in 2013. That is not the worst of it. Even the
National Taxpayer Advocate at the Treasury Department, Nina Olson, said
the cost of this measure is ``disproportionate as compared with any
resulting improvements in tax compliance.''
That is the problem. That is the problem, and the Johanns amendment
is the only solution. We have to correct this job-killing mandate as
urged by the NFIB, the Chamber of Commerce, and the National Small
Business Association. Democrats are trying to sell a pig in a poke.
The Nelson alternative would leave the same bad provision in place,
only making it more complicated for small business owners to comply. It
would only exempt small businesses with 25 employees or less. So, in
other words, we are telling small businesses not to hire the 26th
worker while we are having unemployment up around 10 percent.
If you have small businesses in your State, you better listen to
them. They are wanting a repeal, the full repeal of this burdensome
mandate.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.

[[Page S7060]]

Mr. BOND. Mr. President, I ask unanimous consent that the article
from today's Wall Street Journal editorial be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, Sept. 14, 2010]

Review & Outlook

The 1099 Insurrection

The White House fights an effort to ease a burden on small
business. You might not have seen it reported, but the Senate
will vote this morning on whether to repeal part of ObamaCare
that it passed only months ago. The White House is opposed,
but this fight is likely to be the first of many as Americans
discover--as Nancy Pelosi once famously predicted--what's in
the bill.
The Senate will vote on amendments to the White House small
business bill that would rescind an ObamaCare mandate that
companies track and submit to the IRS all business-to-
business transactions over $600 annually. Democrats tucked
the 1099 reporting footnote into the bill to raise an
estimated $17.1 billion, part of the effort to claim that
ObamaCare reduces the deficit by $100 billion or so.
But this ``tax gap'' of unreported business income is
largely a Beltway myth, and no less than the Treasury
Department's National Taxpayer Advocate Nina Olson says the
costs will be ``disproportionate as compared with any
resulting improvements in tax compliance.''
Meanwhile, small businesses are staring in horror toward
2013, when the 1099 mandate will hit more than 30 million of
them. Currently businesses only have to tell the IRS the
value of services they purchase from vendors and the like.
Under the new rules, they'll have to report the value of
goods and merchandise they purchase as well, adding vast
accounting and paperwork costs.
Think about a midsized trucking company. The back office
would have to collect hundreds of thousands of receipts from
every gas station where its drivers filled up and figure out
where it spent more than $600 that year. Then it would also
need to match those payments to the stations' corporate
parents.
Most Democrats now claim they were blindsided and didn't
understand the implications of the 1099 provision--which is
typical of the slapdash, destructive way the bill was written
and passed. As the critics claimed, most Members had no idea
what they were voting on. Some 239 House Democrats voted to
dump the 1099 provision in August, and the repeal would have
passed except Speaker Pelosi rigged the vote procedurally so
it needed a two-thirds majority. She thus gave Democrats the
cover of a repeal vote without actually repealing it.
In the Senate today, Nebraska Republican Mike Johanns will
offer his amendment to scrap the new 1099 rules altogether.
But the White House is opposing this because it fears it
would set a precedent for repealing the larger health bill.
Over the weekend the Treasury Department pronounced the
Johanns amendment ``not acceptable in its current form.''
Yesterday the White House endorsed a competing proposal
from Florida Democrat Bill Nelson that would increase the
1099 threshold to $5,000 and exempt businesses with fewer
than 25 workers. Yet this is little more than a rearguard
action in favor of the status quo; the Nelson amendment
leaves the basic architecture unchanged while making the
problem more complex.
Businesses would still have to track all purchases, not
knowing in advance which contractors will exceed $5,000 at
the end of the year. It also creates a marginal barrier to
job creation--for a smaller firm, hiring a 26th employee
would be extremely costly. The Nelson amendment also includes
new taxes on domestic oil production, as every Democratic
bill now seems to do.
As of yesterday, no one was sure if either amendment would
get 60 votes, though Democrat Blanche Lincoln of Arkansas is
cosponsoring the Johanns version. Enough Democrats may bend
to White House wishes and produce a stalemate, but this issue
won't go away. The President's opposition to a clean repeal
shows the hollowness of his alleged support for small
business, which he expresses at every campaign stop but is
less a priority than preserving his health-care legacy.
The larger political story here is that ObamaCare is
already under bipartisan siege--and in the same Congress that
passed it. The 1099 provision is only one plank, but
repealing the law plank by plank may be the right strategy.
Sooner or later the whole thing becomes unworkable. Voters
should watch this vote to see who's really on the side of
small business.

The ACTING PRESIDENT pro tempore. The Senator from Nebraska is
recognized.
Mr. JOHANNS. Mr. President, how much time is on this side?
The ACTING PRESIDENT pro tempore. Forty-five seconds.
Mr. JOHANNS. Let me wrap up with something. If the Nelson amendment
passes, this is the effect: These are businesses, real people who are
going to be hurt because they are left out. In the State of Iowa, 3,334
businesses are left out; in the State of California, 18,960. Over
40,000 businesses, employing 93 million people, are left out.
This talk about gutting the health care reform bill; are you kidding
me? The President himself used $250 million of the $500 million this
year for purposes other than what was intended by this health care
bill.
This is simply a choice between standing with our small businesses or
standing with the President on the health care bill against small
businesses. I ask my colleagues to vote yes on the Johanns amendment
and stand with small businesses.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Iowa is
recognized.
Mr. HARKIN. Mr. President, I ask unanimous consent that a letter
signed by 228 different organizations in the United States opposing the
Johanns amendment be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

September 1, 2010.
Dear Senator: As the Senate considers the Small Business
Jobs and Credit Act (H.R. 5297), the 228 undersigned
organizations listed below strongly urge you to oppose the
use of the Prevention and Public Health Fund from the
Affordable Care Act (ACA) as an offset for an amendment
offered by Senator Johanns (No. 4596). Such an action would
virtually eliminate the Fund, and mark a severe blow to this
monumental commitment to prevention and public health under
the Act. We will also oppose any other such efforts to use
the Fund as an offset.
ACA included historic reforms that have the potential to
transform our health system. For too long, we have focused
spending on treating people once they are sick rather than
preventing illness in the first place. The Prevention and
Public Health Fund (Fund) is urgently needed to address the
many emerging health threats our country faces and the
persistent chronic disease rates that we must begin to
control. The Fund is intended to ensure a coordinated,
comprehensive, sustainable, and accountable approach to
improving our country's health outcomes through the most
effective prevention and public health programs.
ACA clearly states That the money be used ``for programs
authorized by the Public Health Service Act, for prevention,
wellness, and public health activities.'' The money would be
strategically used to support disease prevention by promoting
access to vaccines, building the public health workforce, and
investing in community-based prevention. Furthermore, the Act
specifically states that community-based prevention funding
must only support evidence-based prevention programs which
have been shown through scientific research to reduce chronic
disease, including behavioral health conditions, and address
health disparities. Research has shown that effective
community level prevention activities focusing on nutrition,
physical activity and smoking cessation can reduce chronic
disease rates and have a significant return on investment.
Already in Fiscal Year 2010, we have seen these funds
invested for programs to promote tobacco control and
implement tobacco cessation services and campaigns, as well
as obesity prevention, better nutrition and physical
activity. The fund has been invested to support state, local
and tribal public health efforts to advance health promotion
and disease prevention, and to build state and local capacity
to prevent, detect and respond to infectious disease
outbreaks. The funds are also being used to support the
training of current and next generation public health
professionals.
The Fund is a unique opportunity to truly bend the cost
curve on health care spending. Seventy-five percent of all
health care costs in our country are spent on the treatment
of chronic diseases, many of which could be prevented.
Further, in a public opinion survey conducted just prior to
the passage of the Act, Trust for America's Health and the
Robert Wood Johnson Foundation (RWJF) found that 71 percent
of Americans favored an increased investment in disease
prevention and that disease prevention was one of the most
popular components of health reform.
We must ensure that we capitalize on the unprecedented
opportunity to transform our public health system by
investing in prevention and public health. We urge you to
vote NO on the prevention fund offset within the Johanns
amendment, or on any other such legislative vehicles.
Sincerely,
AARP; ACCESS Women's Health Justice; Advocates for Better
Children's Diets; AIDS Action; AIDS Alabama; All Saints Home
Care; American Academy of Pediatrics; American Academy of
Physician Assistants; American Association for International
Aging; American Association of Colleges of Nursing; American
Association of Colleges of Osteopathic Medicine; American
Association of Colleges of Pharmacy; American Association of
People With Disabilities; American Cancer Society Cancer
Action Network; American College of Clinical Pharmacy;
American College of Gastroenterology; American Congress of
Obstetricians and

[[Page S7061]]

Gynecologists; American College of Occupational and
Environmental Medicine; American College of Preventive
Medicine; American Counseling Association; American Dental
Education Association.
American Diabetes Association; American Federation of
State, County and Municipal Employees; American Foundation
for Suicide Prevention; American Heart Association; American
Lung Association; American Medical Student Association;
American Nurses Association; American Psychological
Association; American Public Health Association; American
Social Health Association; American Society for
Gastrointestinal Endoscopy; American Thoracic Society;
Applied Research Center; Arthritis Foundation; Asian and
Pacific Islander American Health Forum; Association of
American Medical Colleges; Association of Maternal & Child
Health Programs; Association for Prevention Teaching and
Research; Association of Public Health Laboratories.
Association of Schools of Public Health; Association of
State and Territorial Dental Directors; Association of State
and Territorial Directors of Nursing; Association of State
and Territorial Health Officials; Association of Women's
Health, Obstetric and Neonatal Nurses; Atlanta Regional
Health Forum; A World Fit for Kids!; Bazelon Center for
Mental Health Law; Boston Public Health Commission; Building
Healthier America; C3: Colorectal Cancer Coalition;
California Association of Alcohol and Drug Abuse Counselors;
California Center for Public Health Advocacy; California Food
Policy Advocates; California Foundation for the Advancement
of Addiction Professionals; California Immigrant Policy
Center; California Pan-Ethnic Health Network; California
Partnership; California School Health Centers Association;
Campaign for Community Change; Campaign for Public Health.
Campaign for Tobacco-Free Kids; CASA de Maryland; C-Change;
Center for Biosecurity, University of Pittsburgh Medical
Center; Center for Health Improvement; Center for Science in
the Public Interest; Cerebral Palsy Association of Ohio;
Children and Adults with Attention-Deficit/Hyperactivity
Disorder; Children Now; Children's Dental Health Project;
City of Philadelphia Department of Public Health; Coalition
for Health Services Research; Coalition for Humane Immigrant
Rights of LA; Colon Cancer Alliance; Colorado Progressive
Coalition; Commissioned Officers Association of the U.S.
Public Health Service; CommonHealth ACTION; Community Action
Partnership; Community Catalyst; Community Health Councils.
Community Health Partnership: Oregon's Public Health
Institute; Comprehensive Health Education Foundation;
Connecticut Certification Board; Connecticut Citizen Action
Group.
Council of State and Territorial Epidemiologists; County
Health Executives Association of California; Crohn's and
Colitis Foundation of America; Defeat Diabetes Fund;
Digestive Disease National Coalition; Faith Action for
Community Equity; Family Voices; Federation of Associations
in Behavioral & Brain Sciences; First Five; Friends of AHRQ;
Friends of NCHS; Friends of SAMHSA; Georgia AIDS Coalition;
Granite State Organizing Project; Grassroots Organizing.
Harlem United Community AIDS Center, Inc.; Having Our Say
Coalition; Health Care for America Now; Health Law Advocates
of Louisiana, Inc; Health Promotion Advocates; Health Rights
Organizing Project; Hepatitis Foundation International; HIV
Medicine Association; Home Safety Council; Idaho Community
Action Network; Indian People's Action; Infectious Diseases
Society of America; Institute for Health and Productivity
Studies Rollins School of Public Health, Emory University;
Institute for Public Health Innovation; International
Certification and Reciprocity Consortium (IC&RC);
International Health, Racquet & Sportsclub Association;
Interstitial Cystitis Association; ISAIAH; Korean Resource
Center; Libreria del Pueblo Inc.
Louisiana Public Health Institute; Mahoning Valley
Organizing Collaborative; Main Street Alliance; Maine
People's Alliance; Make the Road New York; March of Dimes
Foundation; Maricopa County Dept of Public Health; Media
Policy Center; Mental Health America; Michigan Association
for Local Public Health; Montana Organizing Project; National
Alliance of State and Territorial AIDS Directors; National
Assembly on School-Based Health Care; National Association
for Public Health Statistics and Information Systems;
National Association of Chain Drug Stores; National
Association of Children's Hospitals; National Association of
Chronic Disease Directors; National Association of Community
Health Centers; National Association of Counties; National
Association of County & City Health Officials.
National Association of Local Boards of Health; National
Association of Public Hospitals and Health Systems; National
Association of School Nurses; National Association of State
Alcohol and Drug Abuse Directors; National Association of
State Mental Health Program Directors; National Business
Coalition on Health; National Coalition for LGBT Health;
National Coalition of STD Directors; National Council of
Asian Pacific Islander Physicians; National Council of Jewish
Women; National Council of La Raza; National Education
Association; National Environmental Health Association;
National Family Planning & Reproductive Health Association;
National Federation of Families for Children's Mental Health;
National Forum for Heart Disease and Stroke Prevention;
National Health Council; National Indian Project Center;
Northeast Ohio Alliance for Hope; National Korean American
Service and Education Consortium.
National Network of Public Health Institutes; National
Nursing Centers Consortium; National Recreation and Park
Association; National Rural Health Association; National WIC
Association; Nebraska Appleseed; Nebraska Urban Indian Health
Coalition; Nemours; New Hampshire Public Health Association;
NYC Department of Health and Mental Hygiene; New York
Immigration Coalition; New York Society for Gastrointestinal
Endoscopy; North Carolina Fair Share; Northern Illinois
Public Health Consortium; Northwest Federation of Community
Organizations; Novo Nordisk; NYU Langone Medical Center;
Ocean State Action; Ohio Alliance for Retired Americans;
Oregon Action; Out of Many, One.
Papa Ola Lokahi; Partners for a Healthy Nevada; Partnership
for Prevention; Physician Assistant Education Association;
Planned Parenthood Federation of America; Prevention
Institute; Progress Ohio; Progressive Leadership Association
of Nevada; Project Inform; Public Health Association of
Nebraska; Public Health Foundation; Public Health Institute;
Public Health Law and Policy; Public Health-Monroe County
(MI); Public Health--Seattle and King County; Public Health
Solutions; Pulmonary Hypertension Association; Rails-to-
Trails Conservancy; REACH U.S. SouthEastern African American
Center of Excellence for Elimination of Disparities (REACH
U.S. SEA-CEED).
RiverStone Health; Safe States Alliance; Service Employees
International Union; Sexuality Information and Education
Council of the U.S.; Society for Adolescent Health and
Medicine; Society for Healthcare Epidemiology of America;
Society for Public Health Education; South Carolina Fair
Share; Summit Health Institute for Research and Education,
Inc.; TakeAction Minnesota; Tenants and Workers United; The
AIDS Institute; The Amos Project; The Greenlining Institute;
The MetroHealth System; The National Alliance to Advance
Adolescent Health; Toledo Area Jobs with Justice; Trust for
America's Health; UHCAN Ohio; United Action Connecticut.
United Ostomy Associations of America; Urban Coalition for
HIV/AIDS Prevention Services; U.S. PIRG; Virginia Organizing
Project; Washington Health Foundation; West South Dakota
Native American Organizing Project; WomenHeart: The National
Coalition for Women with Heart Disease; YMCA of the USA.

Mr. HARKIN. Here is what it says. They found that 71 percent of
Americans favored an increased investment in disease prevention. The
letter is signed by organizations from the American Academy of
Pediatrics to--
The ACTING PRESIDENT pro tempore. All time has expired.

Cloture Motion

The ACTING PRESIDENT pro tempore. Under the previous order, pursuant
to rule XXII, the Chair lays before the Senate the pending cloture
motion, which the clerk will state.
The legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on Johanns amendment
No. 4596, as modified.
Harry Reid, Patrick J. Leahy, Dianne Feinstein, Charles
E. Schumer, Herb Kohl, Joseph I. Lieberman, Jeff
Bingaman, Barbara A. Mikulski, Richard J. Durbin, Al
Franken, Byron L. Dorgan, Mark Begich, Benjamin L.
Cardin, Amy Klobuchar, Kirsten E. Gillibrand, Jeanne
Shaheen, Kay R. Hagan.

The ACTING PRESIDENT pro tempore. The Senator from Iowa is
recognized.
Mr. HARKIN. Mr. President, I ask unanimous consent that all votes
after the first vote this morning in this series be 10 minute votes.
The ACTING PRESIDENT pro tempore. Is there objection?
Without objection, it is so ordered.
By unanimous consent, the mandatory quorum call has been waived.
The question is, Is it the sense of the Senate that debate on
amendment No. 4596, as modified, to H.R. 5297, the Small Business
Lending Fund Act of 2010, shall be brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: The Senator
from Alaska (Ms. Murkowski) and the Senator from New Hampshire (Mr.
Gregg).
The PRESIDING OFFICER (Mr. Udall of New Mexico). Are there any other
Senators in the Chamber desiring to vote?
The result was announced--yeas 46, nays 52, as follows:

[[Page S7062]]

[Rollcall Vote No. 231 Leg.]

YEAS--46

Alexander
Barrasso
Bayh
Bennet
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Hatch
Hutchison
Inhofe
Isakson
Johanns
Kyl
LeMieux
Lincoln
Lugar
McCain
McConnell
Nelson (NE)
Pryor
Risch
Roberts
Sessions
Shelby
Snowe
Thune
Vitter
Voinovich
Warner
Webb
Wicker

NAYS--52

Akaka
Baucus
Begich
Bingaman
Boxer
Brown (OH)
Burris
Cantwell
Cardin
Carper
Casey
Conrad
Dodd
Dorgan
Durbin
Feingold
Feinstein
Franken
Gillibrand
Goodwin
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (FL)
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Specter
Stabenow
Tester
Udall (CO)
Udall (NM)
Whitehouse
Wyden

NOT VOTING--2

Gregg
Murkowski
The PRESIDING OFFICER. On this question, the yeas are 46, the nays
are 52. Three-fifths of the Senators duly chosen and sworn not having
voted in the affirmative, the motion is rejected.

Cloture Motion

Under the previous order and pursuant to rule XXII, the Chair lays
before the Senate the pending cloture motion, which the clerk will
report.
The assistant legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on amendment No. 4595,
as modified.
Harry Reid, Tim Johnson, Richard J. Durbin, Barbara
Boxer, Al Franken, Byron L. Dorgan, Patty Murray,
Robert P. Casey, Jr., Jon Tester, Jack Reed, Kay R.
Hagan, Jeanne Shaheen, Patrick J. Leahy, Christopher J.
Dodd, Bill Nelson, Tom Harkin.

The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that debate on the
amendment No. 4595, as modified, to H.R. 5297, the Small Business
Lending Fund Act of 2010, shall be brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Alaska (Ms. Murkowski) and the Senator from New Hampshire (Mr.
Gregg).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 56, nays 42, as follows:

[Rollcall Vote No. 232 Leg.]

YEAS--56

Akaka
Baucus
Bayh
Bennet
Bingaman
Boxer
Brown (OH)
Burris
Cantwell
Cardin
Carper
Casey
Conrad
Dodd
Dorgan
Durbin
Feingold
Feinstein
Franken
Gillibrand
Goodwin
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Lautenberg
Leahy
Levin
Lieberman
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Specter
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden

NAYS--42

Alexander
Barrasso
Begich
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Hatch
Hutchison
Inhofe
Isakson
Johanns
Kyl
Landrieu
LeMieux
Lincoln
Lugar
McCain
McConnell
Risch
Roberts
Sessions
Shelby
Snowe
Thune
Vitter
Voinovich
Wicker

NOT VOTING--2

Gregg
Murkowski
The PRESIDING OFFICER. On this vote, the yeas are 56, the nays are
42. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected.

Amendment No. 4594

Ms. LANDRIEU. Mr. President, parliamentary inquiry.
The PRESIDING OFFICER. The Senator from Louisiana is recognized.
Ms. LANDRIEU. Mr. President, could you acknowledge the vote we are
about ready to take?
The PRESIDING OFFICER. The vote is on invoking cloture on the
substitute amendment No. 4594 to H.R. 5297, the Small Business Lending
Fund Act of 2010.
Ms. LANDRIEU. Parliamentary inquiry: If we get 60 votes, we move
forward with the bill; is that correct?
The PRESIDING OFFICER. That is correct. Cloture is invoked on the
substitute.

Cloture Motion

By unanimous consent, pursuant to rule XXII, the Chair lays before
the Senate the pending cloture motion, which the clerk will report.
The assistant legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on the Reid substitute
amendment No. 4594.
Mary L. Landrieu, Max Baucus, Dianne Feinstein, Patty
Murray, Charles E. Schumer, Christopher J. Dodd, Al
Franken, Robert P. Casey, Jr., Maria Cantwell, Sheldon
Whitehouse, Byron L. Dorgan, Benjamin L. Cardin, Ron
Wyden, Kent Conrad, Roland W. Burris, Jeff Merkley,
Debbie Stabenow.

The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that the debate on
amendment No. 4594 to H.R. 5297, the Small Business Lending Fund Act of
2010, shall be brought to a close?
The yeas and nays are mandatory under the rule. The clerk will call
the roll.
The legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Alaska (Ms. Murkowski) and the Senator from New Hampshire (Mr.
Gregg).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
They yeas and nays resulted--yeas 61, nays 37, as follows:

[Rollcall Vote No. 233 Leg.]

YEAS--61

Akaka
Baucus
Bayh
Begich
Bennet
Bingaman
Boxer
Brown (OH)
Burris
Cantwell
Cardin
Carper
Casey
Conrad
Dodd
Dorgan
Durbin
Feingold
Feinstein
Franken
Gillibrand
Goodwin
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
LeMieux
Levin
Lieberman
Lincoln
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Specter
Stabenow
Tester
Udall (CO)
Udall (NM)
Voinovich
Warner
Webb
Whitehouse
Wyden

NAYS--37

Alexander
Barrasso
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Hatch
Hutchison
Inhofe
Isakson
Johanns
Kyl
Lugar
McCain
McConnell
Risch
Roberts
Sessions
Shelby
Snowe
Thune
Vitter
Wicker

NOT VOTING--2

Gregg
Murkowski
The PRESIDING OFFICER. On this vote, the yeas are 61, the nays are
37. Three-fifths of the Senators duly chosen and sworn having voted in
the affirmative, the motion is agreed to.
The majority leader is recognized.
Mr. REID. Mr. President, we hope we can finish this very quickly. The
votes are in. There are a number of technical things that could be done
by those who oppose this legislation, but it would just waste a lot of
the Senate's time, which we do not have a lot of, so I hope we can move
through this very expeditiously.
This is an important piece of legislation. It is the most significant
thing we have done since the stimulus bill was passed to create jobs.
It is estimated this will create from 500,000 to 700,000 jobs. It will
give community banks the ability now to compete with the big banks and
loan money to small businesses.

[[Page S7063]]

As I said this morning, big banks are doing great. The stock market
jumped up yesterday because they looked at the financials of the big
banks and they are doing terrific. Big business is doing just fine. But
in this recession we have the jobs that have been lost in the small
business sector. Eighty percent of the jobs lost are from small
businesses. This legislation will allow community banks to start
loaning money.
As you drive across the country, you see these strip malls with ``For
Lease'' signs up. That will be ending in the near future. People will
be able to borrow money to keep inventory for these little businesses
that create thousands and thousands of jobs. It will allow Karen Mills
at the SBA, who has begged us for this legislation, to have the SBA
part of stimulating our economy. There are programs there that are
under-resourced. This will allow her to have the resources to do good
things. There are tax incentives the Finance Committee has come up with
that will give tax breaks to small businesses. The chairman of the
committee will talk about that at a subsequent time.
I want to acknowledge the hard work of many people. Of course, the
person who has been out front has been the chairman of the Small
Business Committee, Senator Landrieu. She has done a remarkably good
job. She has been diligent, persistent, and she never gives up. I am
very grateful to her for what she has done for the American people with
this legislation. She has had some help. The ability to give these tax
breaks to small businesses came from the Finance Committee, which is
chaired by Senator Baucus of Montana. That is significant, for small
businesses to get billions and billions of dollars of tax cuts.
Remember, everything in this bill is paid for. There is not a penny
that is deficit spending. In fact, we have a little extra money on this
bill.
I would also say the breakthrough we had came with a seasoned
politician, someone who will go down in the history of Ohio as one of
its great statespersons, the mayor of a big city, Governor of a State,
and a Senator who has decided not to run for reelection, which is
unfortunate in the minds of many. Senator George Voinovich in effect
said: We have had enough of posturing on both sides, and I am going to
vote for this bill because it is going to help the economy of Ohio and
the people of this country.
I admire and respect George Voinovich for what he has done, not only
on this legislation but what he has done in the past. This is not the
first time he has decided that party is not as important as the
American people. I will always be an admirer of George Voinovich. There
is no one more studious in the entire Senate than George Voinovich. He
is known for studying legislation. He is someone who is very concerned
and has been from the day he came here about the deficits this country
has. So I am not going to belabor the point other than to say I am very
grateful to George Voinovich for, in fact, breaking the logjam and
saying: I am going to vote for this legislation. He didn't do it
secretly, and he came out publicly and said what he was going to do.
I also want to express my appreciation to George LeMieux, who has
been working on this legislation with Senator Landrieu for several
months now. I appreciate his willingness to work with us in this
regard.
On the Democratic side, Senator Landrieu, of course, and Senator
Baucus led the charge. But we have had Boxer, Merkley, Cantwell,
Stabenow, Warner, Lincoln--a number of Senators who have worked very
hard.
I spread across the record, this is not a victory for the Democratic
Party. This is not a loss for the Republican Party. This is a win for
the American people. This is going to help small business, which has
always been the driver of jobs in our country.
The PRESIDING OFFICER. Cloture having been invoked, the motion to
commit falls.
The Senator from Louisiana is recognized.
Ms. LANDRIEU. Mr. President, I thank the leader for his kind words,
but the fact is we would not have gotten to this point this morning
where 61 Senators raised their hands or their voices to vote yes for
this important and substantial piece of legislation had it not been for
the leadership of Harry Reid.
The majority leader knows not only what Nevada needs but what America
needs. What America and Nevada both need right now is to get back to
work. The entities that are going to put Americans back to work are not
found on Wall Street; they are found on Main Street. They are not big
businesses; they are small businesses. They are not the businesses that
have been around for 50 or 100 or 200 years; they are the businesses
that started up last year or that want to start up today.
Majority Leader Reid knows and understands that. We would not be here
this morning without his leadership. He is right to acknowledge
Chairman Baucus. I said he is a long-suffering chairman of the Finance
Committee and has also the patience of Job to put up with all he puts
up with. Trying to pay for every idea that comes from all 100 of these
desks ends up on his desk. They say: You have a great idea, Senator;
now we need to pay for it. That is what Max Baucus does every day. I
hope people appreciate it, not only in Montana but around the country.
He found a way not only to pay for this bill but for it to generate for
the taxpayer earnings of $1.1 billion. That is good work. It does not
happen here every day, and it would not have happened without Senator
Baucus and the many cosponsors Senator Reid pointed out: Senator Boxer,
Senator Merkley, Senator Cantwell, Senator Warner, Senator Levin,
Senator Lincoln--particularly helpful and supportive.
I also want to say this vote today to end debate was the vote on this
bill. Make no mistake about it, if 60 or 61 Senators had not said yes
this morning, this bill would have gone into this trash can right here
not to be seen again. The $12 billion in tax cuts would not be a
reality. The substantial improvement of the core small business
programs would not be a reality, and the $30 billion lending fund that
is going to leverage $300 billion in lending would not be a reality. It
would be in the trash can right now. But it is not. It is alive. It is
a living bill we are going to pass later today because 61 Senators in
this Chamber said yes to the country and no to party politics.
Particularly, I wish to point out Senator Voinovich. His statement
was so poignant in the paper today or yesterday when he said, or it was
reported: I have run across small businesspeople in Ohio who went to 40
banks to try to get a loan, he said, and were turned down every time.
This is happening all over America today. Senator Voinovich is a
Senator who governs with his heart as well as his head, and he is not
led around by the nose like some people here, by their party politics.
He said: No, the debate has to come to an end. If you want to debate
the George Bush tax cuts, do it on somebody else's back, not on the
backs of small businesses in Ohio or Louisiana or Virginia. They have
taken too much weight.
When Wall Street collapsed because of the their greed and their
recklessness and because of our failure to regulate them, do you know
who got hurt? Small businesses that did not have anything to do with
derivatives or international investment. All these people do every day
is wake up before the Sun comes up and they stay up when it is dark and
they work hard, sometimes by themselves once they send their workers
home, and keep that business going. They did nothing and they deserve
help and they are getting it this morning.

One more word before I turn it over to my colleague from Virginia.
This whole debate this morning was a joke on Johanns. I want to talk
about that. If the Republicans were serious about repealing something
that needs to be repealed, they would have put an offset on this floor
that we could vote for. They knew very few Democrats would vote for a
provision that would harm one of the underlying principles of health
care reform. So that was all theater--all theater. I have had about
enough of it, and I think many Americans have had enough of it as well.
Senator Johanns is right that the 1099 section needs to be repealed.
He is absolutely correct. It was the wrong thing to do. Even our side
acknowledges that.
I am going to file a bill right now to take care of it. We are going
to repeal

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1099. We are not only going to repeal the portion that was put in by
health care--which was not done intentionally, but there are sometimes
unintended consequences. Anybody around here who thinks they can write
perfect pieces of legislation--they cannot. When you do something
wrong, you should correct it. We are going to correct it.
But in addition, my bill that I am going to file right now is going
to repeal the $600 requirement that has been in the law for 62 years,
and we are going to raise that threshold to $5,000, clean up the way
small businesses have to report, and do something good for small
business in America.
It is going to be a Landrieu bill. Lots of other people have
indicated an interest in the past. It is not theater, it is real. We
are going to find a way to pay for it that both sides can agree to.
I want to tell the Chamber of Commerce that I know is listening right
now: We have heard you. I have heard the NFIB. I have heard small
businesses in my State, and I know we made a mistake on this 1099 and
we are going to fix it. But it does not have to be fixed this morning.
It doesn't even go into effect for a year and a half.
Hear me, it doesn't go into effect for a year and a half. We have
time to fix 1099. But we don't have 1 minute to wait to send money to
small businesses that are putting ``Closed'' signs on their businesses
this morning. If the Republican Party thinks they can keep saying no to
small business and keep saying no to Main Street and keep saying no to
the middle class--they cannot. I hope when we vote on final passage
there will be a few more yeses.
We have a year and a half to fix 1099. We don't have any more time to
help small businesses.
I yield the floor for the Senator from Virginia.
The PRESIDING OFFICER. The Senator from Virginia is recognized.
Mr. WARNER. Mr. President, first, I commend my friend and colleague,
the Senator from Louisiana, who I know the Senate has heard repeatedly
over the last few weeks, relentlessly over the last few weeks, come
back time and again and again on this issue around small business. I
think many Americans are getting a chance to see what those of us who
have the privilege of serving with Mary Landrieu see regularly: This is
somebody who does not take no. This is someone I know we sometimes need
to prod to come out of her shell. But this is someone who is so
passionate about the people of Louisiana and, in her role as Chair of
the Small Business Committee, has been a tireless voice for small
businesses, not just in Louisiana but in Virginia, New Mexico, all
across the country. I want to join the majority leader and others in
commending her for her ``stick-to-it-iveness'' on this critical piece
of legislation.
I want to add a couple of other comments. I concur as well with the
Senator from Louisiana on the issue of 1099s. We do need to have an
accurate way to ensure that the standing law that has been the law of
the land for 62 years is enforced. But this process of filing a 1099 at
a $600 threshold at this moment in time is way overburdensome. I, like
the Senator from Louisiana, and I think most Members, heard that loudly
and clearly, and we do need to fix that.
I look forward to working with Senator Landrieu. I know Senator
Begich and others have been involved in those efforts. I look forward
to joining them in this effort.
I want to take a moment or two--our time is about up before we break
for our caucus lunches--I think it is important that the pieces of this
bill have been emphasized time and again, the lending facility, small
businesses that can take capital in if they increase their percentage
of lending, this is particularly helpful to small banks that might be
in challenging financial times at this point.
The SBA, the replenishment of funding for the SBA, the one message I
brought out everywhere across Virginia over the last month and a half
was that the SBA today is not your grandfather's or even your daddy's
SBA. It is not even 5 years ago's SBA. The SBA, under Administrator
Karen Mills, is much less bureaucratic, much more streamlined.
With the work the Small Business Committee has done in terms of
upping the guarantees, the SBA's role and the type of businesses the
SBA has served during this crisis has expanded dramatically. Look at
the number of banks that participate now with the SBA today versus 18
months ago. That remarkably successful effort ground to an immediate
halt in June when funding ran out. Why in the heck it has taken us this
long simply to replenish that proven program that does not add to the
deficit is one of the things that gets a lot of folks in Virginia,
Louisiana, and New Mexico scratching their heads.
There is another piece of this bill, one that the chairman was kind
enough to work with me and others on, that builds upon an existing
initiative in the private sector and I believe in about 26 States, a
Capital Access Program, that helps those marginal small business loans
become more bankable. I hear the same concerns the Chair of the Small
Business Committee hears: A small business cannot get their loans,
although I have got to say it is not only the bankers' fault, because,
let's face it, a lot of small businesses today are not as financially
healthy as they were 2 years ago. If they have real estate as
collateral, it has decreased in value. If they are lending on cashflow,
that has decreased as well. So how do we take that otherwise healthy
small business, in good times and in normal recessions, and not let it
fall off the cliff in this deepest recession since the Great
Depression?
The Capital Access Program is one place where a borrower will be
charged a couple of extra points, we will go in from the government and
match those points, and we can create a first-dollar loss, a separate
loss reserve pool, for a whole series of loans; another $30- to $60
billion of capacity in that aspect. Finally, what is not to like about
the series of small business tax credits that have also been built into
this legislation? So I commend the chairperson of the Small Business
Committee. I am glad the Senate has come to its senses on this issue.
Candidly, I wish we would have passed this legislation last spring, but
better late than never.
I want to add two other points that I think are important. One other
piece of legislation, a bipartisan piece of legislation that we passed
recently--and I would be curious to hear the response of the Chair of
the Small Business Committee on this with the financial reform bill, a
very important piece of legislation. We set, appropriately, in that
financial reform bill the requirement for banks to set higher capital
standards. The challenge we have right now is starting to implement
those higher capital standards in the trough of the recession. That
sends a very mixed message to our bankers and to our regulators. I hope
the Chair of the Small Business Committee and I and others can think
about how we work with our regulators at the FDIC and the OCC and the
Fed to ensure that while we want to build up the capital reserves and
make our banks healthier, that some level of forbearance for those
small business performing loans that may not meet every covenant in
their loan document, because their real estate has depreciated in
value, somehow we have to have some flex. Because what we are doing by
having the regulators come down so hard on the banks at this point is
we are, in many ways, even with this very good program that Senator
Landrieu has put out, strangling that recovery because of this mixed
message.
The final point I want to make is, with this piece of small business
legislation, I think it may be--again, it is not going to be a single
silver bullet, but one piece of good news that I do not think we have
come back to enough in these discussions is that not only have large
banks recovered nicely since the decline, but large cap companies, the
Fortune 1,0000 companies, their balance sheets are healthier today than
they have ever been. There is north of $2 trillion in cash sitting on
Fortune 1,000 balance sheets. One of the things I am looking forward to
working with my colleagues on is how we get that cash off the sidelines
and invested back in the market. When they invest in the market, and
the large companies go to their supply chains, which is the small
businesses, those small businesses have to get the credit as well to
keep functioning. So this piece of legislation is important not only to
small businesses, but as

[[Page S7065]]

large cap companies start to spend out as well, it is important to the
overall economic recovery.
I would ask my friend and my colleague, the leader on this important
piece of legislation, if she might have some ideas as well about how we
meet that appropriate long-term financial goal of making our financial
standards appropriate, but not send this mixed message to regulators so
that those small business loans that are still performing have the
appropriate forbearance to get through this trough in the recession.
The PRESIDING OFFICER. The Senator from Louisiana is recognized.
Ms. LANDRIEU. Mr. President, the Senator from Virginia is absolutely
correct. He has put his finger on two pending and very serious
problems. One is the regulation direction being driven by some of the
new legislation we have passed. Of course, he would know this, because
as a member of the Banking Committee, he has been such a strong
advocate for commonsense regulation and supporting community banks. So
he is absolutely correct. And you do have my commitment, through the
Small Business Committee, to keep this issue alive and in view so that
we can find some appropriate solution. I think the Senator raises an
absolutely very key point.
The second point the Senator from Virginia has put his finger on is
the $2 trillion in capital sitting there. One thing that makes further
interest is the zero capital gains rate in this bill, should they take
some of that $2 trillion in capital and invest in some small businesses
that have a capitalization level below $50 million. That is one thing
that could help encourage them. They will pay no tax, none, on the
money they earn through that investment, which should be an incentive.
But there are some additional things I think we can do. I want to
work with the Senator from Virginia because his leadership is very much
needed at this time, with his particular background as a successful
business person, as a Governor. So the Senator is right, this bill is
not a silver bullet. It is a good first step. But there are some other
things we need to do as quickly as we can. I look forward to working
with the Senator on those two and others in the weeks to come.
Mr. WARNER. Mr. President, again I will close my comments and thank
the chairman of the Small Business Committee for her leadership on this
bill. We would not be here today but for her relentlessness on this
legislation.
This legislation has had more hurdles, many of them false hurdles,
put in its face, and Senator Landrieu does not know how to say no when
it affects the well-being of small businesses, which are the lifeblood
of job creation coming out of a recession.
I thank her for her leadership.
I yield the floor.
Ms. LANDRIEU. Mr. President, I ask unanimous consent that the time in
recess for the caucus luncheons count postcloture.
The PRESIDING OFFICER. Without objection, it is so ordered.

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