Obamacare’s Paperwork Deluge

The more we delve into the details of the monstrous health-overhaul law, the more shocked and appalled we become. The latest outrage is a new requirement that would bury small business in a tsunami of paperwork that has virtually nothing to do with health care.

Here’s an example of how it works: The Galen Institute is required to file a Form 1099 for payments to independent contractors to whom we pay more than $600 in a year. Basically, this applies to the several consultants who provide valuable services to us. It’s a hassle to file these forms, but manageable.

But the law now will require us to file a 1099 with the IRS for every business transaction totaling more than $600 — everyone from Staples to United Airlines to FedEx to the catering business that brings in box lunches for our conferences.

Congressional staffers looked into every corner of the tax code to find money to pay for their $2.5 trillion expansion of government control over our health sector, and they found this change that would raise $17 billion over ten years by catching some new tax cheats. But imagine what the compliance costs will be for millions of businesses in America!

Rep. Dan Lungren (R., Calif.) has come to the rescue with a beautifully simple bill (HR 5141) that repeals this ridiculous provision. He has found at least 34 co-sponsors since he introduced the bill on Monday.

In his “Dear Colleague” letter, Representative Lungren said that, unless this is repealed, small business owners will face an onerous tax-reporting burden, and it will discourage companies from dealing with small businesses: “Businesses will think twice before purchasing goods and services from smaller companies. . . . It will be easier to rely on a single large supplier.”

“Small businesses are the economic engine of our nation, creating 65% of new job growth. Imposing yet another tax burden on them is bad medicine for Americans.” The National Federation of Independent Business has endorsed the legislation.

This 1099 rule is just one example of the avalanche of changes in the health-care law that show Washington’s complete disregard for its impact on private-sector America.

The law is so complex that even the federal government is not complying! Last week, we reported that the office that administers health benefits for federal workers is basically ignoring the law and plans to keep its program operating as is, even though the Congressional Research Service seriously questions the legality of doing so.

And now this: HHS was required to publish on its website by last Friday a list of all of the authorities provided to the secretary under the health-care law (Sec. 1552). But what Secretary Sebelius’s office did was basically cut and paste the table of contents from the act onto the HHS site.

Remember Nancy Pelosi saying they had to pass the bill to find out what was in it? Well, now it’s passed, and HHS either doesn’t know or is unwilling to write down the full list of “authorities” given its secretary, because of how long and sweeping the list will be.

If Congress and the administration aren’t going to comply with the law, how do they expect everyone else to?

The president keeps talking about the “mess” of an economy he inherited. What about the “mess” he has created with his health-care law?

Published in National Review Online: Critical Condition, May 2, 2010.

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The more we delve into the details of the monstrous health-overhaul law, the more shocked and appalled we become. The latest outrage is a new requirement that would bury small business in a tsunami of paperwork that has virtually nothing to do with health care.

Here’s an example of how it works: The Galen Institute is required to file a Form 1099 for payments to independent contractors to whom we pay more than $600 in a year. Basically, this applies to the several consultants who provide valuable services to us. It’s a hassle to file these forms, but manageable.

But the law now will require us to file a 1099 with the IRS for every business transaction totaling more than $600 — everyone from Staples to United Airlines to FedEx to the catering business that brings in box lunches for our conferences.

Congressional staffers looked into every corner of the tax code to find money to pay for their $2.5 trillion expansion of government control over our health sector, and they found this change that would raise $17 billion over ten years by catching some new tax cheats. But imagine what the compliance costs will be for millions of businesses in America!

Rep. Dan Lungren (R., Calif.) has come to the rescue with a beautifully simple bill (HR 5141) that repeals this ridiculous provision. He has found at least 34 co-sponsors since he introduced the bill on Monday.

In his “Dear Colleague” letter, Representative Lungren said that, unless this is repealed, small business owners will face an onerous tax-reporting burden, and it will discourage companies from dealing with small businesses: “Businesses will think twice before purchasing goods and services from smaller companies. . . . It will be easier to rely on a single large supplier.”

“Small businesses are the economic engine of our nation, creating 65% of new job growth. Imposing yet another tax burden on them is bad medicine for Americans.” The National Federation of Independent Business has endorsed the legislation.

This 1099 rule is just one example of the avalanche of changes in the health-care law that show Washington’s complete disregard for its impact on private-sector America.

The law is so complex that even the federal government is not complying! Last week, we reported that the office that administers health benefits for federal workers is basically ignoring the law and plans to keep its program operating as is, even though the Congressional Research Service seriously questions the legality of doing so.

And now this: HHS was required to publish on its website by last Friday a list of all of the authorities provided to the secretary under the health-care law (Sec. 1552). But what Secretary Sebelius’s office did was basically cut and paste the table of contents from the act onto the HHS site.

Remember Nancy Pelosi saying they had to pass the bill to find out what was in it? Well, now it’s passed, and HHS either doesn’t know or is unwilling to write down the full list of “authorities” given its secretary, because of how long and sweeping the list will be.

If Congress and the administration aren’t going to comply with the law, how do they expect everyone else to?

The president keeps talking about the “mess” of an economy he inherited. What about the “mess” he has created with his health-care law?

Published in National Review Online: Critical Condition, May 2, 2010.

SHARE THIS ARTICLE

About the author