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April 5, 2011

TRANSCRIPT: Johanns Applauds 1099 Repeal as Victory for Millions of Small Businesses

JOHANNS: I wish to start today by thanking the distinguished Senator from Utah for this courtesy. I appreciate it immensely.

It's been a bit of a long and tortured process to get here today, and so I really appreciate the opportunity to speak first. All of us, Madam President, work across our states. I think of communities like Kearney, Nebraska, Scottsbluff, Nebraska. I walk those streets often, whether it's a parade or just calling on people, and I'm struck by the number of small businesses that fill the storefronts and communities all across Nebraska. These businesses are the heart and soul of the community. They contribute to the little league. They give high school students their first jobs. They ask how are the kids doing when you stop in to see them. They symbolize what it truly means to be a community.

They also symbolize the single most powerful job-creating force in our world. 64% of the new jobs in our nation are created by small businesses as they expand and they grow. So when their livelihood is threatened by ill-advised policy, well, we all in the Senate agree that something must be done.

Shortly after the health care bill was passed, I, like my colleagues, began hearing from small business owners who were very concerned about a provision that was put into the health care bill at page 737. As the number of concerned job creators continued to mount, I knew and others in the Senate knew that we had to do something about it. Passing 1099 repeal exemplifies why I came to the United States Senate. Taking an issue that is important to our state and to our country and literally building support here in this body to do the right thing.

I won't deny that there have been some frustrations along the way. I certainly didn't expect to have to present the legislation seven times to get to the finish line, but I will also say it's been well worth the effort, and I could not be more pleased by the bipartisan support that is in this effort.

Today presents an opportunity for members of both parties to unite behind doing the right thing for our job creators, and send it on to the President's desk today. It won't be a victory for Republicans or Democrats. I certainly won't report it that way.

It's not going to be a victory for a single Senator, but it will be a victory for millions of small business owners who have been begging us to do something about this provision for a long time now, and it will be a victory for common sense. That is why today is such an important day here in the Senate.

In a few short minutes, we will have an opportunity to put to an end the looming 1099 paperwork mandate once and for all. Small businesses in my state and all across the country are depending upon us today to act.

One real-life example came from a Nebraska company. It's called Hayneedle. It's an online retailer of home furnishings and other home products. With the new 1099 requirement, Hayneedle estimates that the annual cost of compliance is literally going to exceed $100,000 for them. $100,000. Madam President ,that would go a long way to hiring more people.

Adding insult to injury, the 1099 reporting requirement creates a perverse incentive to consolidate suppliers. Few suppliers means less 1099 paperwork. This leaves main street's small suppliers, those businesses I was talking about, well, they're just out in the cold as big suppliers win more and more business.

Dale Black, a Kentucky Fried Chicken franchise owner from Grand Island, Nebraska, told me, and I'm quoting here, "I want to be a good corporate citizen in the communities I have restaurants, but the 1099 forces me not to hire local vendors and tradesmen in my community " unquote.

And with 40 million businesses, nonprofits, churches, and local governments bracing for the 1099 after latch of -- avalanche of paperwork, well, every senator could come to the floor today and tell similar stories.

With all these main street businesses and their workers hanging in the balance, there really is just one clear choice today. We must advance the house-passed version, and in all due respect to my colleague from New Jersey, reject the Menendez alternative, the Menendez Amendment.

You see, only the house-passed version will quickly reach the President's desk and provide immediate relief to our job creators. You see, adding anything on, passing anything else, will cause our job creators to wait on the sidelines yet again, because then, of course, we will have different versions, a house version and a senate version, and I fear we go off into never-neverland.

But, you see, time has run out on our job creators. When this debate began, the mandate seemed a long way away. It was out there on the horizon. We had a long time to work through these issues, but now eight months have passed, we voted over and over again, and we never quite could get to the finish line, but it's decision time for businesses.

They're feeling the pressure to set up the accounting systems they'll need to comply with this tangled mess of tax forms that even the IRS doesn't support. This mandate forces many to set aside money for software that could instead be spent on those new workers, and that why it is so important that the Senate passes the house bill today.

Put simply, a vote for the house bill is a vote to actually solve the problem, but again, in all due respect to my colleague from New Jersey, the amendment tells our small businesses that they will have to wait longer.

Our path actually gives our job creators some certainty they need to grow their businesses, but the other path, as I said, is a guaranteed sidetrack back into never-neverland.

While one approach tells small businesses we're with you, the other says we're going to continue to work through this and wrangle back and forth instead of enacting a bipartisan solution today. Now, the House of Representatives has already led by example, and it's important to recognize that they passed their 1099 repeal on March 3, more than a month ago, and it got great bipartisan support. 314-112. 76 Democrats voted for that repeal.

Not only does this legislation pay for the repeal of the 1099 mandate, it actually reduces the deficit by $166 million over the next ten years. It requires repayment of improper health exchange subsidies, a concept the senate passed unanimously in December to pay for the doc fix.

If we fail to pass the house version today, well, job creators are being told that they have to divert more of their resources to managing unnecessary paperwork. So let's not vote for another alternative that's just going to stall this out again. Let's cast a vote today that sends a clear message. Let's defeat the pending Menendez amendment, and then let's pass the bill so we can get it to the president and get it signed.

I'm hoping that this will be a strong bipartisan support, and I just want to say again that the victory today is not for either party, it is not for a single Senator.

It is for the job creators who are depending on our action today.

President, I yield the floor.

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