Senate rejects amendment to strip out IRS reporting requirement in new health care law

Partisanship is already dominating the final work week in the Senate. While both Republicans and Democrats agree that a new tax reporting requirement in the health care law should be scaled back, each party defeated the other side’s proposal to accomplish that goal.

Senators just voted 46-52 against an amendment by Sen. Mike Johanns, R-Neb. that would have stripped out the provision, which requires businesses to report to the IRS transactions to anyone or any company that cost more than $600.

The Senate then defeated a similar amendment by Sen. Bill Nelson, D-Fla. Nelson’s measure, which went down in a 61-37 vote, would have raised the reporting requirement to $5,000 and excluded businesses with fewer than 25 employees.

Seven Democrats voted for the Johanns proposal, which most Democrats and the Obama administration said went too far in rolling back a health care provision that was expected to raise about $17 billion to help pay for an expansion in health care coverage. Republicans for the most part refused to back the Democratic bill because they didn’t think it went far enough and did not like that it would be paid for with a $15 billion tax on oil companies.

The amendments were part of a small business tax bill the Senate is expected to vote on in the coming days. Unless the two parties can agree on a compromise, the tax reporting requirement that nobody seems to like is going to remain in the bill. The reporting requirements are set to begin in 2012

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