Late on Thursday, Senate Democrats announced that they had achieved an agreement on modifications to their important economic legislation. This removed a significant barrier to the passage of one of President Joe Biden’s top priorities for the election year in the Senate.
Sen. Kyrsten Sinema, D-Ariz., a centrist who was viewed as the deciding vote, stated in a statement that she was prepared to “move forward” on the Inflation Reduction Act after accepting adjustments to the measure’s tax and energy measures.
Senators reached a solution, according to Senate Majority Leader Chuck Schumer of New York, “that I believe will win the approval” of all Democrats present in the chamber. Along with Vice President Kamala Harris’ tie-breaking vote, his party needs unanimous support to pass the resolution through the 50-50 Senate.
According to Schumer, he thinks the Senate may start voting on the bill addressing energy, the environment, health care, and taxes on Saturday. The House, which the Democrats narrowly control, might pass the bill next week.
Although in a more constrained shape, the election-year measure’s final legislative ratification would represent an amazing, last-minute salvation of Mr. Biden’s expansive domestic aspirations. Democratic infighting embarrassed Vice President Biden and led him to scale back a far larger and more ambitious $3.5 trillion, 10-year version, and then a $2 trillion alternative, thereby killing the plan.
Sen. Joe Manchin, a conservative maverick Democrat from West Virginia, and Schumer reached an agreement on this package that would generate $739 billion in tax revenue. The government and patients would benefit from lower medicine prices as well as tax increases on high earners and some large firms. The IRS would also increase tax collections.
Over $300 billion of it would still be available for deficit reduction after spending a large portion on energy, environmental, and healthcare projects.
Sinema claimed that Democrats had agreed to take out a clause that would have increased taxes on “carried interest,” or profits given to private equity firm executives.
She has long resisted that idea, despite it being a favorite of Manchin and many lefties.
A modest part of the $739 billion in overall revenue from the proposal, about $13 billion, was projected to come from the carried interest provision.
On condition of anonymity because they were not permitted to discuss the accord publicly, a Democrat familiar with the agreement said that it will be replaced by a new excise tax on stock buybacks that will generate more income than that. The representative gave no further information.
Sinema stated that she had also agreed to provisions to “guard sophisticated industries and strengthen our clean energy economy,” but she did not go into further detail.
She mentioned that Senate parliamentarian Elizabeth MacDonough is still examining the bill to make sure that no provisions need to be eliminated since they are in contravention of the rules of the chamber. Sinema remarked, “Subject to the parliamentarian’s review, I’ll move forward.”
“Tonight, we’ve taken another critical step toward reducing inflation and the cost of living for America’s families,” a statement from Mr. Biden read. “The Inflation Reduction Act will help Americans save money on prescription drugs, health premiums, and much more. It will make our tax system more fair by making corporations pay a minimum tax. It will not raise taxes on those making less than $400,000, and it will reduce the deficit. It also makes the largest investment in history in combatting climate change and increasing energy security, creating jobs here in the US and saving people money on their energy costs. I look forward to the Senate taking up this legislation and passing it as soon as possible.”
According to Schumer, the legislation maintained the bill’s wording on government budget reduction, climate change, “closing tax loopholes exploited by big businesses and the rich,” and prescription drug prices.
He claimed that the Democratic Party “addressed a number of critical problems they have highlighted” in discussions with other Democrats. The final measure “will reflect this work and bring us closer to adopting this historic legislation into law,” he continued.