Date: 2010-04-27
Speaker: DANIEL E. LUNGREN (republican)
Chamber: H
State: Cali

fornia. Mr. Speaker. I yield myself such time as I may consume. After listening to the gentleman from Texas . I am reminded of some freezes I would like to see. In addition to this freeze on our pay for a year. I would like to see us put a freeze on regulations on small business. The previous speaker just mentioned that he believes we have somewhat of an arcane procedure for providing for pay raises to Members of Congress. That may be true. But there is certainly no more arcane activity that we engaged in than when we passed the health care bill in that having a new burden on business. particularly small business. And I speak of section 9006 of the health care bill. which has nothing to do with health. but has everything to do with regulation in that now. as opposed to the law which has existed for many years in which you had to file a 1099 on someone who provided a service for you. the purpose of which was to make sure that there was some paper trail to see if you were paying payroll taxes. we now have decided under this bill. the health care bill. section 9006. to require anybody involved in a trade or a service. that is any type of business who makes a purchase from some other corporate entity of any type that amounts to more than $600 cumulatively over a single year. that requires a 1099 to be filed with the person that you purchase the product from and the Federal Government. What this means is that now if you purchase plane tickets and it amounts to more than $600 and you are engaged in a business. you will have to file a 1099 with United Airlines or American Airlines and the Federal Government. If you purchase food for your company and it amounts to more than $600. you will have to file a 1099. If you happen to be a rancher and you purchase bales of hay. you are going to have to keep a running tab all year long. and when you go over $600 you are going to have to file a 1099. If you in fact utilize FedEx or UPS. if during the course of the year it is more than $600. you will have to file a 1099 with FedEx or UPS and the Federal Government. So this is a new burden that will require accounting procedures for anybody involved in business. particularly imposed on small business. But more than that. there is a doubleedged sword to this. And that is this is a dagger at the heart of small business. Because if you have this obligation. it is easier to deal with one single big vendor than to have a number of them. Instead of going to your local hardware store if you are a small company and you need some hardware. you ought to go to one of the big guys because their universe of products is greater. And so if you have everything you purchased from them. knowing it is going to be over $600. you only have a single 1099 to file. So what we have done in one fell swoop is make it more difficult to actually operate with this new regulatory scheme. and on the other hand. create disincentives for small business. Now. when we contacted the Internal Revenue Service to see how they are going to interpret it. they said we havent interpreted it yet because we are waiting for HHS to give us guidance. So now we have tax policy going to be determined by HHS. All Im saying is. if people think that weve had arcane procedures for means of pay raises for Members of Congress. it is nothing compared to what weve done in this health care bill with regulation on small business. I actually call that provision of the health care bill the "universal snitch act" because. when you file this 1099. it has nothing to do with your obligation to pay taxes. It has got to be premised on the idea that every vendor you deal with cheats and that the only way to catch cheaters is to have this new paper trail. So I dont know. It just seems repugnant to me that we would do that. and I happen to have a bill that I introduced yesterday that would repeal that. I just bring this up because the gentleman from Texas prompted this thought in my mind about freezes that would be appropriate. Then when the previous speaker mentioned arcane procedures. there was nothing more arcane than the health care bill we passed. In fact. when we called the IRS. they werent sure that this was in the bill. When we talked to the Congressional Research Service. they said. Oh. it couldnt be. Then when we pointed out that the new language in the bill is property and not just servicesand that includes anything that you purchaseit has an unbelievable obligation on small business. Mr. Speaker. I reserve the balance of my time.