Democrats say they’ve reached agreement on Inflation Reduction Act, a major win for Biden’s agenda; Sinema ready to ‘move forward’

WASHINGTON– Senate Democrats approved changes to their marquee economic legislation in the eleventh hour, they announced late Thursday, removing the biggest obstacle to getting one of the top priorities of President Joe Biden’s election year through the chamber in the coming days.

Sen. Kyrsten Sinema, D-Ariz., a centrist considered a key voice in the 50-50 chamber, said in a statement that she agreed to revise some of the measure’s tax and energy provisions and is ready to “to go forward”. On the bill.

Senate Majority Leader Chuck Schumer, DN.Y., said he believes his party’s energy, environment, health and tax compromise will garner “the support of the entire” Democratic membership in the chamber. His party needs unanimity and Vice President Kamala Harris’ landmark vote to get the measure through the Senate, in the face of some solid opposition from Republicans, who say the plan’s tax hikes and spending are worsening inflation and damaging the economy would.

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The announcement came as a surprise, as some assumed talks between Schumer and the quicksilver Sinema would drag on for days, with no guarantee of success. Schumer has said he wants the Senate to begin voting on the legislation on Saturday, after which it would begin his summer recess. Passing through the House, which Democrats narrowly control, could come when that chamber briefly returns to Washington next week.

Democrats revealed few details of their compromise, and other hurdles remained. Still, final congressional approval would complete a startling revival of Biden’s broader domestic agenda, albeit in a more modest form.

Democratic infighting had embarrassed Biden, forcing him to downsize on a far larger and more ambitious $3.5 trillion 10-year version and then a $2 trillion alternative, all but quashing the effort were dead. Instead, Schumer and Sen. Joe Manchin, the conservative West Virginia Democrat maverick who derailed Biden’s earlier efforts, unexpectedly negotiated the slimmer package two weeks ago.

His approval would allow Democrats to appeal to voters by boasting about reducing inflation – although analysts say the impact would be small – to address climate change and increase US energy security.

“Tonight we took another critical step in reducing inflation and the cost of living for America’s families,” Biden said in a statement.

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Sinema said Democrats have agreed to scrap a provision to increase taxes on “carried interest,” or profits that go to executives of private equity firms. It’s a proposal she has long rejected despite being a favorite of Manchin and many progressives.

It has been estimated that the carried interest provision will raise $13 billion for the government over the next decade, a small part of the $739 billion total for the measure.

It will be replaced by a new excise tax on share buybacks that will bring in more revenue, a Democrat familiar with the arrangement said. The official, who was not authorized to discuss the deal publicly and spoke on condition of anonymity, gave no further details.

Sinema said she also agreed to unspecified provisions to “protect advanced manufacturing and promote our clean energy economy.”

She noted that Senate MP Elizabeth MacDonough is still reviewing the measure to ensure that no provisions need to be removed for violating the chamber’s procedures. “Pending verification by the parliamentarian, I will continue,” Sinema said.

The measure must conform to those rules in order for Democrats to use procedures that prevent Republicans from mounting filibusters, delays that require 60 votes to be stopped.

Schumer said the measure maintains the language of the bill about prescription drug prices, climate change, “closing tax loopholes that are being exploited by big corporations and the wealthy” and reducing government deficits.

He said the bill addresses “a number of important issues” that Democratic senators raised during the talks. He said the final measure “will reflect that work and bring us one step closer to translating this historic legislation into law.”

It was unclear whether changes were made to the bill’s minimum corporate tax rate of 15%, a provision Sinema was interested in revising. It would bring in an estimated $313 billion, making it the legislation’s largest revenue stream.

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That levy, which would apply to around 150 companies with incomes in excess of $1 billion, has met with strong opposition from business, including Sinemas Arizona groups.

The latest measure should include support that Sinema and other western senators have tried to add to help their states deal with epic droughts and wildfires that have become commonplace. Those lawmakers have been targeting around $5 billion, but it was unclear what the final language would achieve, a Democrat said after the hearing, who would only describe the effort on condition of anonymity.

The measure must also withstand a “vote-a-rama,” a barrage of nonstop changes expected to last well into the weekend, if not beyond. Republicans want to kill as much of the bill as possible, either with House decisions or with amendments.

Even if their amendments lose — which is certain for most — Republicans will consider it accomplished if they force Democrats to make risky campaign votes on hot-button issues like taxes, inflation and immigration.

Democratic changes are also expected. Progressive Sen. Bernie Sanders, I-Vt., has said he wants to strengthen his health care.

The total bill would bring in $739 billion in revenue. That would result from tax increases for high earners and some large corporations, increased IRS tax revenues, and drug price controls, all of which would save the government and patients money.

It would spend much of that on initiatives supporting clean energy, fossil fuels and healthcare, including helping some people get private health insurance. That would still leave over $300 billion in deficit-reducing measures.

Copyright © 2022 by The Associated Press. All rights reserved. Democrats say they’ve reached agreement on Inflation Reduction Act, a major win for Biden’s agenda; Sinema ready to ‘move forward’

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