The US Senate prepares a major bill on taxes, climate and health after the deal with Sinema

US Senate Democrats’ sweeping tax, climate and health care bill looks set to pass after Majority Leader Chuck Schumer and Sen. Kyrsten Sinema of Arizona reached a deal to soften the blow of a corporate tax hike and a second hike of taxes aimed at the wealthy financial sector. workers, Schumer told reporters Friday.

The lost revenue to get Sinema’s support would be more than offset by a new provision aimed at buying back shares, Schumer said.

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

Schumer’s deal with Sinema, an influential moderate seen as the last hurdle in the bill, is likely to put the legislation on a path to unanimity among the Senate’s 50 Democrats. That’s a requirement that the bill pass under a legislative process known as reconciliation that allows Democrats to bypass the chamber’s normal 60-vote threshold.

Vice President Kamala Harris is expected to break a party tie in a vote on final passage of the bill.

The concessions to Sinema included removing a provision that changes how certain compensation paid to hedge fund managers and private equity executives, known as carried interest, is taxed, Schumer said.

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

“I’ve been asking for it to be in this bill,” Schumer said. “Sen. Sinema said she would not vote on the bill — or even move to continue — unless we brought it up. So we had no choice.”

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

The Schumer-Sinema deal would also change a separate provision that sets a new minimum tax rate of 15% for corporations with $1 billion or more in revenue.

Schumer did not provide details of the change, saying only “a portion was removed,” but he said it would lower the expected revenue the provision would produce from $313 billion to $258 billion.

The tax revenue lost in removing these two provisions would be made up with a new excise tax on stock buybacks, where public companies buy their stock on the open market to reduce the amount publicly available and raise the price.

Schumer said he “hate(s)” the buyback procedure because the money companies spend on it could otherwise be spent on job creation or research and development.

The excise tax will bring in $74 billion, he said, and should be encouraging to the progressive wing of the caucus.

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

The exact figure for drought-resilience spending was still the subject of debate among Senate Democrats Friday afternoon, but was expected to run into the billions of dollars, sources said.

‘It’s gonna be hell’

A handful of Senate Republicans slammed the bill from all angles during a Friday morning media availability and indicated they would make the amendment process as painful as possible for Democrats.

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

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

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

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

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

“If their recipe for high fuel prices is someone driving an electric vehicle, they don’t understand the lives of those people I represent,” he said. “People don’t drive 15-year-old pickup trucks 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 even worse.”

Sen. John Barrasso of Wyoming, the ranking Republican on the Senate Energy and Natural Resources Committee, said the measure would raise energy costs that are fueling inflation.

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

Republicans will propose changes to the “energy, inflation, border and crime” bill to force Democrats into tough votes, said Barrasso, the No. 3 member of the House Republican leadership.

Sen. Lindsey Graham of South Carolina said Democrats “deserve” a tough run of votes because they outlasted Republicans to win GOP support for a bill to boost semiconductor manufacturing while keeping the Democrats-only spending bill alive.

Minority Leader Mitch McConnell had indicated he would not support the semiconductor bill if Democrats still plan to pursue a reconciliation bill. But some Republicans voted in favor of the measure last week, only to see a 725-page Schumer-Manchin bill released hours later.

“So how’s the vote-a-rama going to be?” Graham said. “It’s going to be hell.”

Weekend session

Schumer said the Senate will convene on Saturday to begin consideration of the bill.

The Senate lawmaker, an official tasked with determining whether each section of the bill can be considered under the reconciliation process reserved for legislation with a major effect on the federal budget, was still reviewing the measure Friday.

After the Senate votes to proceed with debate on the bill, expected Saturday afternoon, the chamber will have 20 hours to debate it, then unlimited time to consider amendments at a rapid pace in what is called a “vote-a -rama”.

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


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