The US Senate is preparing a major tax, climate and health bill after the Sinema deal

The US Senate is preparing a major tax, climate and health bill after the Sinema deal

Senate Democrats’ sweeping tax, climate and health bill looks set to pass after Majority Leader Chuck Schumer and Arizona Sen. Kyrsten Sinema reached an agreement to soften the measure’s corporate tax hike and a second tax hike for wealthy financial workers, said Schumer told reporters on Friday.

The lost revenue to maintain Sinema’s support would be more than offset by a new provision targeting share buybacks, Schumer said.

Democrats are also likely to raise up to $5 billion for the Bureau of Reclamation to address drought resilience in the Colorado River Basin, people familiar with those negotiations said. The basin includes all of Arizona and parts of Colorado, New Mexico, Nevada, California, Utah and Wyoming.

Schumer’s settlement with Sinema, an influential moderate believed to be the last standout of the bill, likely put the legislation on the path to unanimity among the 50 Senate Democrats. That’s a requirement for the bill to pass through a legislative process known as reconciliation, which allows Democrats to bypass the chamber’s normal 60-vote threshold.

Vice President Kamala Harris is expected to break a party-line tie in a vote to finally pass the bill.

Among the concessions to Sinema was the removal of a provision to change the way certain compensation received by hedge fund managers and private equity executives is taxed, Schumer said.

The New York Democrat said he strongly supports the tax change, but it’s a red line for Sinema.

“I’ve pushed for it to be included in this bill,” Schumer said. “Sen. Sinema said she would not vote for the bill — not even take a step — unless we take it out. So we had no choice.”

The bipartisan Congressional Budget Office estimated the measure would have increased revenue by $14 billion over 10 years.

The Schumer-Sinema accord would also amend a separate provision that sets a new minimum tax rate of 15% for companies with incomes of $1 billion or more.

Schumer didn’t provide details about the change, saying only “a slice was taken out,” but he said the expected revenue the provision would generate would drop to $258 billion from $313 billion.

The tax revenue lost from removing those two provisions would be offset by a new excise tax on share buybacks, where public companies buy their own shares on the open market to reduce the publicly available amount and drive up the price .

Schumer said he “hates” the buyback process because the money companies spend on it could otherwise be spent on job creation or research and development.

The excise tax would raise $74 billion, he said, and should embolden the progressive wing of the group.

Those changes would add up to $5 billion in additional revenue — reportedly exactly the amount Sinema is targeting for additional drought resilience funding.

The exact number of drought resilience spending was still under debate among Senate Democrats as of Friday afternoon, but was expected to land in the billions, sources said.

“It’s gonna be like hell”

A handful of Senate Republicans slammed the bill from all angles during a media presence Friday morning, indicating they would make the change process as painful as possible for Democrats.

All GOP senators are expected to oppose the bill on the floor.

Senator Roger Marshall, a Kansas gynecologist before joining the Senate, said the bill’s amendments, which would allow Medicare to negotiate the prices of certain prescription drugs, would hurt drug development in the pharmaceutical industry.

“Why do they want to destroy the innovations that the pharmaceutical industry has given us that have saved millions of lives?” Marshal said.

Sen. Bill Cassidy of Louisiana said the bill would do little to fight inflation, despite the Democrats’ title for the bill – the Inflation Reduction Act.

Tax breaks for electric vehicles, for example, would have little impact on Louisiana residents who are struggling to fill their gas tanks, he said.

“If their recipe for high fuel prices is for someone to drive an electric vehicle, they have no understanding of the lives of the people I represent,” he said. “People don’t drive 15-year-old pickups because they don’t want a new car. They don’t drive new cars because they can’t afford a new car. And high gas prices have made it worse.”

Wyoming Sen. John Barrasso, the senior Republican on the Senate Committee on Energy and Natural Resources, said the measure would increase energy costs, which are driving inflation.

Democrats have said the clean energy bill’s spending would reduce energy costs. The measure also includes provisions to encourage fossil fuel development negotiated with Schumer by moderate Democratic West Virginia Senator Joe Manchin III.

Republicans will propose changes to the Energy, Inflation, Border and Crime bill to force Democrats to vote hard, said Barrasso, the No. 3 member of the Republican leadership in the chamber.

Sen. Lindsey Graham of South Carolina said Democrats “deserve” a tough voting streak for outmaneuvering Republicans to win GOP support for a bill to boost semiconductor manufacturing while keeping the Democrat-only spending bill alive.

Minority leader Mitch McConnell had indicated that he would not support the semiconductor bill if Democrats still planned to pursue a reconciliation bill. But several Republicans voted on the measure last week, only to watch hours later as a 725-page Schumer-Manchin bill was released.

“So what will Vote-a-rama look like?” said Graham. “It’s going to be like hell.”

weekend session

Schumer said the Senate will meet Saturday to begin considering the bill.

The Senate Houseman, an official tasked with determining whether each section of the bill can be considered under the voting process reserved for legislation with significant federal budget implications, was still reviewing the measure Friday.

Once the Senate votes to proceed with debating the bill, which is expected to be Saturday afternoon, the chamber would have 20 hours to debate it and then unlimited time to consider amendments in a so-called “vote-a-rama” in fast-paced to check speed.

A final vote is expected on Sunday or Monday. House Majority Leader Steny Hoyer of Maryland said the House will return from its recess on Aug. 12 to take up the bill.

GET THE TOMORROW HEADLINES IN YOUR INBOX

Leave a Comment

Your email address will not be published.