Senate OKs small-business aid

Democrats get 2 votes from GOP

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The Democrat-led Senate on Tuesday overcame months of Republican resistance to push President Obama’s small-business assistance bill toward passage, but it failed in a bid to reduce a costly tax-reporting provision on businesses in the new health care law.

Speaking on the floor of the Senate, Majority Leader Harry Reid said the bill could create as many as 700,000 jobs and was “the most significant thing we have done since the stimulus bill was passed to create jobs.”

“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,” the Nevada Democrat said. “This is going to help small businesses, which has always been the driver of jobs in our country.”

Two Republicans - Sens. George V. Voinovich of Ohio and George S. LeMieux of Florida - broke with their party to help Democrats propel Mr. Obama’s plan forward. A final Senate vote on the bill is expected later this week, a move that will send the bill back to the House for final approval.

Before Tuesday, Republicans filibustered the small-business bill, arguing that Democrats kept rewriting the measure but weren’t allowing Republicans to offer enough amendments.

Mr. Voinovich and Mr. LeMieux jumped on board after Democrats agreed to consider a plan by Sen. Mike Johanns, Nebraska Republican, to repeal a tax-reporting provision that was tucked into the health care legislation. The provision requires businesses to file a tax form known as a 1099 to the Internal Revenue Service for every purchase of $600 or more for goods and property each year.

The expanded reporting requirement was designed to raise more than $17 billion in revenue, but has drawn the ire of business groups, including the U.S. Chamber of Commerce.

The Senate also considered an alternative proposal from Sen. Bill Nelson, Florida Democrat, which was supported by the White House and would have scaled back the same tax compliance requirement to purchases of more than $5,000 per year and excluded companies with fewer than 25 employees.

Both proposals failed and Democrats approved their plan, paving the way for an approval of a $30 billion small-business-lending fund run by the Treasury Department and $12 billion in small-business tax breaks.

Although the two amendments died, the debate over the 1099 mandates suggests that lawmakers generally agree that the new health care law would impose a huge paperwork burden on small businesses and that they should revisit the issue before the requirement goes into effect in 2013.

The debate also provided Republicans with another opportunity to publicly decry Mr. Obama’s health care changes, perhaps providing a glimpse of what’s to come during the final weeks of the campaign season and after the midterm elections if Republicans seize control of Congress, as some predict.

“This is simply a choice between standing with our small business or standing up with the president on the health care bill against small businesses,” Mr. Johanns told his colleagues in the Senate.

Sen. John Thune, South Dakota Republican, called the reporting requirement “absolutely disastrous for small business across this country and is essential that we get this part of the health care reform bill repealed.”

“Now there are many others that I think we are probably going to be talking about before this is all said and done, because … 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,” Mr. Thune said.

Polls show that the health care package has fallen out of favor with a majority of Americans, and a federal judge in Florida indicated that he likely would allow parts of a lawsuit against the new law to go to trial.

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