WASHINGTON — Arizona Democrat Kyrsten Sinema announced Thursday night that she would support progress on her party’s climate, tax and health care package, paving the way for a key piece of President Biden’s domestic agenda to pass through the United States. Senate to go in the next few days.
To win Ms. Sinema’s backing, Democratic leaders agreed to drop a $14 billion tax hike for some wealthy hedge fund managers and private equity managers she opposed, the structure of a 15 percent minimum tax. on farms and take up drought money to take advantage of this. Arizona.
Ms. Sinema said she was ready to move forward with the package, provided the Senate’s top official agreed.
Ms. Sinema was the last holder of the package after West Virginia Democrat Senator Joe Manchin III last week struck a deal with top Democrats that revived a plan that appeared to have failed.
It brought Democrats one step closer to enacting the package and saving key pieces of their domestic agenda, starting with a series of votes this weekend. It came just over a week after Majority Leader Mr. Manchin and Senator Chuck Schumer stunned their colleagues with an agreement to bill hundreds of billions of dollars for climate and energy programs and tax increases, in addition to a proposal to lower the price of prescription drugs and expand more comprehensive health insurance subsidies.
With Republicans united in opposition, the measure needs the unanimous support of Democrats to move forward in the 50-50 Senate, so the party can’t afford even one defector.
Mr. Schumer confirmed in a statement that he had reached an agreement “which I believe will have the support of the entire Democratic Senate conference.” He said the revised legislation would be released on Saturday.
“The agreement retains key components of the Inflation Reduction Act, including cutting the cost of prescription drugs, fighting climate change, closing tax loopholes exploited by big business and the wealthy, and reducing the deficit,” he said. The deal “puts us one step closer to turning this landmark legislation into law.”
Biden called on the Senate to quickly approve the measure, praising the deal as “another critical step toward reducing inflation and the cost of living for American families.”
Ms Sinema urged the removal of a provision that would have restricted preferential tax treatment of income for some wealthy hedge fund managers and private equity managers. Democrats instead added a new 1 percent tax that companies would have to pay on the amount of shares they buy back, said a Democratic official, who disclosed details of the plan on condition of anonymity.
That provision, the official said, would ensure that the package still cuts the federal deficit by as much as $300 billion, the same amount Democrats aimed for with the original deal and a top priority for Mr. Manchin.
Democrats also voted in favor of Ms. Sinema’s request to raise billions of dollars for drought relief, according to officials briefed on the emerging plan, something crucial for Arizona as it suffers from a devastating megadrought. They were expected to restructure the 15 percent minimum corporate tax to make it less of a burden on manufacturers. Earlier this week, Arizona business leaders immediately appealed to Ms. Sinema to simplify that proposal, which was included in part because she had opposed raising tax rates as part of the plan.
“Manufacturers remain concerned that this bill will stifle new treatments and therapies,” said Jay Timmons, the president and chief executive of the National Association of Manufacturers. on Twitter, even though she praised the abolition of certain tax provisions. He added: “We remain skeptical and will carefully review the revised legislation.”
While most Democrats had quickly rallied around Mr. Manchin’s deal with Mr. Schumer when it was announced last week, Ms. Sinema had declined to cooperate, personally stating that changes would be needed, particularly in the tax proposals, to win her vote.
Even as she argued an unusually bipartisan vote margin on Thursday for a judge she supported before the U.S. Court of Appeals for the Ninth Circuit — gaining the support of nearly 20 Republicans — Ms. Sinema was lobbied from both sides of the aisle. She and Mr. Manchin at one point huddled in the room and spoke in muffled voices.
Ms. Sinema, an enigmatic centrist, had already forced her party to abandon their plans to overhaul much of the tax code, and her trademark silence frustrated Democrats eager to take the bill. After learning that she had given her support to the bill, several Democratic senators and aides celebrated, confident that final passage was within reach.
“We are about to pass monumental necessary and popular legislation,” said Hawaii Democrat Senator Brian Schatz, adding, “It is happening.”
Mr. Schumer said he planned to hold a trial vote on the measure Saturday afternoon so that the Senate would not leave for a planned five-week recess in August to complete work on the legislation.
The package still has several hurdles to overcome before the Senate can pass it. As the Democrats use the secretive process of budget reconciliation to protect the measure from a filibuster, it must be blessed by the Senate MP to ensure his elements adhere to the strict rules governing the process. That process is expected to continue on Friday and could lead to further changes to the measure if certain parts are not in order.
Ms Sinema allowed herself room to change course if those changes were a concern, saying she would go ahead with the bill “subject to MP’s review”.
Republicans will have a chance this weekend to try to make changes before the legislation is finally passed during a marathon series of amendments known as a vote-a-rama. If all Republicans are in attendance, all 50 Senators consulting with Democrats must remain united to protect written legislation.
In her statement, Ms. Sinema said she would work with Virginia Democrat Senator Mark Warner on separate legislation to address the preferential tax treatment of hedge fund income, known as the “carry interest loophole.” She said they would focus on “protecting investment in the US economy and encouraging continued growth while closing the most egregious loopholes that some are exploiting to avoid taxes.”
But to do this outside of a reconciliation bill would take 60 votes to overcome an almost certain Republican filibuster, and it’s unlikely enough GOP senators would join the effort to make that happen.
Alan Rappeport reporting contributed.