Senate Democrats have agreed on changes to theirthey announced late Thursday, clearing the biggest hurdle to pushing one of President Joe Biden’s top election-year priorities through the chamber in the coming days.
Late. Kyrsten Sinema, D-Ariz., a centrist seen as the deciding vote, said in a statement that she had accepted changes to the measure’s tax and energy provisions and was ready to “move forward” on.
Senate Majority Leader Chuck Schumer, D-N.Y., said lawmakers had reached a compromise “that I think will receive support” from all Democrats in the chamber. His party needs unanimity to move the measure through the 50-50 Senate, along with Vice President Kamala Harris’s tie vote.
Schumer has said he hopes the Senate can begin voting on the energy, environment, health care and tax measures on Saturday. Review of the House, which Democrats narrowly control, could come next week.
Final congressional approval of the election-year measure would complete a stunning, eleventh-hour rescue of Mr. Biden’s wide-ranging domestic goals, albeit in a more modest form. Democratic infighting had vexed Mr. Biden, forcing him to cut back on a far larger and more ambitious $3.5 trillion, 10-year version, and then a $2 trillion alternative, leaving the effort all but dead.
That bill, negotiated by Schumer and Sen. Joe Manchin, the conservative maverick Democrat from West Virginia, would raise $739 billion in revenue. That would come from tax increases on high-income earners and some large corporations, increased tax collection by the IRS, and caps on drug prices, which would save money for the government and patients.
It would spend much of it on energy, climate and health initiatives and still leave over $300 billion for deficit reduction.
Sinema said Democrats had agreed to eliminate a provision that raises taxes on “carried interest,” or profits that go to executives of private equity firms. It’s been a proposal she’s long opposed, though it’s a favorite of Manchin and many progressives.
The carried interest was estimated to produce $13 billion for the government over the next 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 that will raise more revenue than that, said a Democrat familiar with the deal, who spoke on condition of anonymity because they were not authorized to discuss the deal publicly. The official did not provide any other details.
While giving no details, Sinema said she had also agreed to provisions to “protect advanced manufacturing and boost our clean energy economy.”
She noted that Senate Rep. Elizabeth MacDonough is still reviewing the measure to ensure no provisions are removed to violate the chamber’s procedures. “Subject to the parliamentarian’s review, I will move forward,” Sinema said.
“Tonight, we have taken another critical step toward reducing inflation and the cost of living for American families,” read a statement from Mr. Biden. “The Inflation Reduction Act will help Americans save money on prescription drugs, health care premiums and more. It will make our tax system fairer by making businesses 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 to fight climate change and increase energy security, create jobs here in the United States and save people money on their energy costs. I look forward to the Senate taking up this legislation and passing it as soon as possible possible.”
Schumer said the measure retained the bill’s wording on prescription drug pricing, climate change, “closing tax loopholes exploited by big business and the wealthy” and reducing federal deficits.
He said the party, in talks with other Democrats, “addressed a number of important issues they have raised.” He added that the final measure “will reflect this work and bring us one step closer to passing this historic legislation into law.”