The Washington Weekly Update
The Good and the Bad from the Senate’s 1099 Vote
After nearly six weeks away from Capitol Hill, Senators returned to work last Tuesday for what will likely be a short legislative session before they break again to campaign for re-election. The first order of business upon their return was to vote on Sen. Mike Johanns’ (R-Neb.) repeal of the health care reform law’s new 1099 filing mandate.
As you know, this new mandate requires clubs to file a 1099 for each vendor they spend $600 or more with throughout the year. The requirement begins in 2012 and it will add considerable time and cost to the administrative side of running a private club. The purpose of the new requirement is to help ensure that companies receiving the money actually disclose it on their taxes. (Shouldn’t that be the IRS’ job rather than the job of private clubs??)
NCA and its small business allies worked with Sen. Johanns to see that his repeal measure was brought forward for a vote. Last Tuesday, that vote was held. Unfortunately, his measure was filibustered by Senate Democrats. To stop the filibuster and bring the legislation forward for a final vote, Sen. Johanns needed to secure 60 “yes” votes. While the measure did attract five Democrats and all Republican Senators, the final tally was 46-52. As such, the filibuster against it was not broken and the measure was pulled from further consideration.
To say the least, this result was not what we had hoped for and I want to thank all of our members who used NCA’s sample letter and communicated their support for the Johanns bill prior to the vote. Thousands of individual small businesses and trade associations made their opposition to this onerous new mandate known, but a majority in the Senate felt it best to leave the health care reform bill unaltered. Therefore, the 1099 provision will still go into effect beginning January 1, 2012.
This was the bad news coming from the Senate last week, but there was some good news – potentially.
After the vote on Sen. Johanns’ bill, Sen. Mary Landrieu (D-La.) came to the Senate floor and pointedly acknowledged that the 1099 provision should not have been included in the health care law and she said that she will work with Republicans to resolve this issue before the measure takes full effect in 2012.
NCA appreciates Sen. Landrieu’s perspective on this unfortunate employer mandate and we are pleased that another Democrat has come forward to acknowledge that this burdensome paperwork requirement thrust on America’s small businesses should not go into effect. We will look forward to working with her as we try to convince other Senators that this provision should be fully repealed. Let’s hope they listen…..
Extension of the Bush Tax Cuts Sets Off Major Debate among Senate Democrats
During a recent Democratic policy lunch, the debate over how to extend the Bush tax cuts hit a fevered pitch with various options being presented to Senate Majority Leader Harry Reid (D-Nev.).
One option was an extension of the tax cuts only for those individuals making less than $200,000 and families making less than $250,000 – this is the President’s plan. Another option was to permanently extend the tax cuts for those wage earners but to also extend the tax cuts for those making above that for an additional two years. Another option, which has the support of all Republicans and at least five Democrats, was to permanently extend all of the tax cuts for all income earners.
Naturally, NCA has supported the latter option. There is no reason to remove those who own and invest in small businesses, create jobs and, most importantly, who traditionally join private clubs from receiving an extension of the tax cuts – especially in an economy that is slowly emerging from this recession.
With Senate Democrats unsure how they should address the issue, NCA and our allies on the Tax Relief Coalition have formulated a strategy to pursue those Senators who could join the five other Democrats and bring tax relief to all Americans before these tax cuts expire at the end of the year.
Should the tax cuts for high wage earning individuals expire on December 31, clubs with just 20 families making $500,000 could lose over $200,000 in club revenue. Indeed, if those club members pay the new, higher tax with money they would have spent at their clubs, the entire club industry could be significantly impacted right at the time we can least afford it.
While we are pleased that there is bipartisan support in the Senate for an extension of all of the Bush tax cuts, 41 Republican Senators and five Democratic Senators do not add up to a majority. So, there is much more to do before any vote and Majority Leader Reid has indicated that he wants a vote on this matter prior to their adjournment for the November elections, so stay tuned.
Naturally, this is the number one agenda item for me between now and the end of this legislative session. I’ll keep you posted….
The House is Back in Session – Sort of….
On September 13, the House of Representatives returned from the August recess. However, for the last week that chamber has done little. The biggest thing the Members accomplished was passing a resolution expressing the House’s condolence to the flood victims of Pakistan. And, yes, there was some opposition to the resolution….
At this point, the House leadership seems content to allow the Senate to act first on legislation like the extension of the Bush tax cuts. Having been the first to act on many other tough legislative initiatives, there seems to be a strong sentiment that the House has done enough heavy lifting for the 111th Congress. Instead, the House will let the Senate take the political heat for voting on tough bills and, if those bills actually make it through, then House Members will take a look at them.
Clearly, this decision to wait on the sidelines for the Senate to act means the election year jitters have hit home for the House. With only 44 days left until the election, House Members do not want to put any more fuel on the fire of voter discontent unless they have to. With this legislative session only lasting until October 8, they may be able to keep their heads down until they leave…..
The President and Private Clubs
During the August Congressional recess, President Obama and his family took a much needed vacation to Martha’s Vineyard. While there, the President spent more than a few days pursuing one of his favorite recreational activities: golf. What was nice to see – especially with the tax cut debate coming – is that the President enjoyed a few rounds on a private course.
It was great to see him enjoying our industry’s finer courses and we look forward to him supporting us in the months and years ahead…..
Brad D. Steele
VP of Government Relations & General Counsel