5th August, 2022
U.S. Senate Democrats have agreed to eleventh-hour changes to their marquee economic legislation, they announced late Thursday, clearing the major impediment to pushing one of President Joe Biden’s paramount election-year priorities through the chamber in coming days.
Sen. Kyrsten Sinema a centrist from Arizona, seen as the pivotal vote in the 50-50 chamber, said in a statement that she had agreed to revamping some of the measure’s tax and energy provisions and was ready to “move forward” on the bill.
Senate Majority Leader Chuck Schumer, said he believed his party’s energy, environment, health and tax compromise “will receive the support of the entire” Democratic membership of the chamber.
His party needs unanimity and Vice President Kamala Harris’ tie-breaking vote to move the measure through the Senate over certain solid opposition from Republicans, who say the plan’s tax boosts and spending would worsen inflation and damage the economy.
The announcement came as a surprise, with some expecting talks between Schumer and the mercurial Sinema to drag on for days longer without guarantee of success.
Schumer has said he wants the Senate to begin voting on the legislation Saturday, after which it would begin its summer recess.
Passage by the House, which Democrats control narrowly, could come when that chamber returns briefly to Washington next week.
Democrats revealed few details of their compromise, and other hurdles remained.
Still, final congressional approval would complete an astounding resurrection of Biden’s wide-ranging domestic goals, though in more modest form.
Democratic infighting had embarrassed Biden and forced him to pare down a far larger and more ambitious $3.5 trillion, 10-year version, and then a $2 trillion alternative, leaving the effort all but dead.
Instead, Schumer and Sen. Joe Manchin, the conservative maverick Democrat from West Virginia who derailed Biden’s earlier efforts, unexpectedly negotiated the slimmer package two weeks ago.
Its approval would let Democrats appeal to voters by boasting they are moving to reduce inflation — though analysts say that impact would be minor — address climate change and increase U.S. energy security.
“Tonight, we’ve taken another critical step toward reducing inflation and the cost of living for America’s families,” Biden said in a statement.
Sinema said Democrats had agreed to remove a provision raising taxes on “carried interest,” or profits that go to executives of private equity firms. That’s been a proposal she has long opposed, though it is a favourite of Manchin and many progressives.
The carried interest provision was estimated to produce $13 billion for the government over the coming decade, a small portion of the measure’s $739 billion in total revenue.
It will be replaced by a new excise tax on stock buybacks which will bring in more revenue than that, said one Democrat familiar with the agreement.
The official, who was not authorised to discuss the deal publicly and spoke on condition of anonymity, provided no other detail.