We’re going to be seeing much more of this as the new health care law gets implemented. An easily fixable problem identified in the law that requires legislative action gets jumped on by opponents as an opportunity to dismantle major parts of the legislation itself. When the US Senate comes back from summer recess September 14th, they will be voting on just such an amendment. The challenge for those who want the health care law to work will be to clearly make the case for fixing problems without gutting the law itself.
Here the issue is fairly simple. (The Center on Budget and Policy Priorities has an excellent summary.) Businesses currently have to report payments over $600 to vendors providing services to their business. For example, a business who hires an independent web designer would have to report any payment over $600 to the IRS. This allows the IRS to accurately estimate taxes owed by vendors. However, the current law exempts any payments for goods, services, and to corporations, resulting in substantial under-reporting and avoidance of taxes by some vendors. Both the Bush and Obama administrations recommended elimination of these exemptions to reduce tax avoidance and the health care law did that, generating more revenue in the process since avoidance of taxes by some vendors would be reduced.
However, for some businesses, the paperwork requirements with this change could be onerous, so this is what is proposed to be fixed by the Senate. Enter the dismantlers of the new health law. Instead of just fixing the reporting requirements, they want to take $11 billion away from preventive health services allocated by the health law and, if this wasn’t enough, weaken the health law’s mandate that people purchase insurance before they get sick, a change that would drive up health premiums for everyone.
The vote in the Senate will be an early test of the ability of Congress to resist dismantling the law even as implementation takes place. Changes to the law will continue to be necessary as implementation moves forward. However, opponents will look at every change as an opportunity to dismantle what they hate – the promise of affordable coverage and lower health costs for millions of Americans.