On Tuesday Senate Democrats conceded defeat in the battle of how to pay for repealing the expanded 1099 reporting provision that passed last year as part of the Affordable Care Act but which many small-business owners consider burdensome. In voting to approve the bill, the Senate agreed to adopt a House Republican measure that Democrats viewed as an effort to undermine their health care law. Nonetheless, the bill passed the Senate by a lopsided 87 to 12 — with most Democrats voting in favor. Shortly after the vote, the White House signaled that President Obama would sign the repeal.

The bill also repeals a second new 1099 requirement directed at landlords that helped pay for the small-business jobs act. To pay for these repeals, the House measure takes aim at subsidies that low- and middle-income people will receive to purchase health insurance under the new law. Those subsidies are tax credits paid in advance and based on income reported in prior years. Taxpayers who earn more than anticipated — and so receive a bigger subsidy than they’re entitled to — must return at least some of that overpayment to the government. The bill increases the amount of excess subsidy that many taxpayers who earn more than twice the federal poverty level would have to pay back — and those earning between four and five times the federal poverty level would have to pay all of it back, reported The New York Times.

Democrats called this a tax increase on the middle class, and Senator Robert Menendez of New Jersey offered an amendment to delay the repeal until the effects of the offsetting measure could be studied. But that amendment received only 41 votes, all from Democrats, far short of the 60 needed to pass.

Initially, the White House declared its opposition to the House offset. But it stopped short of threatening a veto, and today the White House said in a statement it was “pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses.”