Upon returning from recess, the Senate was captivated by two amendments to the small business lending bill. Passions flared not only because of the punitive impact each amendment would have, but because the legislation each side advocated for exemplified the ideological differences between Republicans and Democrats.

This proxy war was fought over the 1099 reporting requirements for small businesses that the Patient Protection and Affordability Care Act radically increases. While both Democrats and Republicans agree that 1099 reporting for all small businesses are unnecessary and burdensome, they have offered different remedies.

Representing the Democratic camp, Sen. Bill Nelson (D-Fla.) proposed a tax hike on America’s five largest oil and natural gas producers. Sen. Nelson would use the newly garnered revenue to exempt some small businesses from 1099 reporting.

In the GOP corner, Sen. Mike Johanns (R-Neb.) offered an amendment that eliminates the reporting requirements for all small businesses. To plug the fiscal hole created by exempting small businesses from onerous 1099 reporting, Sen. Johanns wants to cut $15 billion in government spending.

While neither amendment received enough support to pass, they are indicative of the ongoing debate between Republicans and Democrats. A rejuvenated Republican Party has pledged to cut spending and reduce the size and scope of government. The Democratic Party, seemingly incapable of trimming America’s $3.7 trillion annual budget, looks to tax America’s most productive businesses to pay for its policies.

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Posted by Chris Prandoni on Friday, September 17, 2010 4:30 PM EDT

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