Sen. Kyrsten Sinema (D-Ariz.) has reached a deal with Democrats over a multi-pronged spending package that lawmakers say would reform the tax code, lower the federal deficit, lower health care costs, and invest in energy and climate change programs.
The spending package appeared to be a revised, alternate version to the Build Back Better (BBB) bill, which would fulfill a major agenda of President Joe Biden.
Sen. Joe Manchin (D-W.Va.) previously announced on July 27 that he had reached a deal with Senate Majority Leader Chuck Schumer (D-N.Y.) on energy, taxes, and health care to advance the bill, which is dubbed the “Inflation Reduction Act of 2022.”
Sinema, who previously held out on the deal, said in an announcement on Thursday she would support moving forward with the measure and begin debate on the bill.
“We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said. “Subject to the Parliamentarian’s review, I’ll move forward.”
Sinema was referring to a provision that would have closed the so-called carried interest loophole and generate an estimated $14 billion in new revenue over the next 10 years. The loophole is said to help wealthy private equity and hedge fund managers pay less taxes.
She was also separately referring to an agreement to protect manufacturing from the impact of a proposed 15 percent corporate minimum tax, which opponents say would jeopardize economic growth.
“Following this effort, I look forward to working with [Sen. Mark Warner (D-Va.)] to enact carried interest tax reforms, protecting investments in America’s economy and encouraging continued growth while closing the most egregious loopholes that some abuse to avoid paying taxes,” the Arizona senator said, referring to tax concerns that affect hedge funds.
Schumer said in a statement on Thursday that the agreement “preserves the major components” of the original bill, which includes “reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit by $300 billion.”
“I am pleased to report that we have reached an agreement on the Inflation Reduction Act that I believe will receive the support of the entire Senate Democratic conference,” he also said. “I have had many productive discussions with members of our conference over the past three days and we have addressed a number of important issues they have raised.”
Schumer said the final version of the bill will be introduced on Saturday.
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