Senate Democrats scored a big win on Thursday night after Sen. Kyrsten Sinema (D-AZ) announced that she will move forward with the Democrats’ economic bill, giving Democrats the 50 votes they need to pass the legislation in the coming days.
Sinema’s support is critical given that all 50 Republicans will oppose the bill and any one Democratic defection could sink it.
The Arizona Democrat had expressed concern over key parts of the Democrats’ plan to pay for their climate and health care package, imposing a 15% tax minimum tax on big corporations and taxing so-called carried interest, which would mean imposing a new levy on hedge fund managers and private equity.
But she was able to negotiate several changes to the tax provisions of the package, CNN reported. The changes include removing the tax on carried interest, which would have impacted hedge fund managers and private equity. That proposal would have raised $14 billion.
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“We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said. “Subject to the Parliamentarian’s review, I’ll move forward.”
“The agreement will include a new excise tax on stock buybacks that brings in far more revenue than the carried interest provision did, meaning the deficit reduction figure will remain at $300 billion,” a Democrat familiar with the agreement told CNN.
Shortly after Sinema’s announcement, Senate Majority Leader Chuck Schumer released a statement, saying: “The agreement preserves the major components of the Inflation Reduction Act, including reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit by $300 billion. The final version of the Reconciliation bill, to be introduced on Saturday, will reflect this work and put us one step closer to enacting this historic legislation into law.”
