US Senate prepares big tax, climate and health bill after Sinema deal

US Senate prepares big tax, climate and health bill after Sinema deal

The US Senate Democrats’ broad tax, climate and health care bill looks set to pass after Majority Leader Chuck Schumer and Sen. Kyrsten Sinema of Arizona struck a deal to soften his corporate tax hike measure and a second tax hike targeting the wealthy financial sector workers, Schumer told reporters on Friday.

The revenue lost to getting Sinema’s support would be more than a new provision targeting stock markets, Schumer said.

Democrats are also likely to add up to $5 billion for the Bureau of Reclamation to address drought resilience in the Colorado River Basin, people 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 holdout on the bill, likely put the legislation on a path toward unanimity among the Senate’s 50 Democrats. That’s the requirement to pass the bill under a legislative process known as reconciliation that allows Democrats to bypass the House’s normal 60-vote threshold.

Vice President Kamala Harris is expected to break the party tie in the final vote on 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 supported the tax change, but that it was a red line for Cinema.

“I pushed for it to be included in this bill,” Schumer said. “Japanese minute. Sinema said they wouldn’t vote for the bill – or even go ahead – unless we got it out. 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% on companies with $1 billion or more in revenue.

Schumer did not provide details on the change, saying only “one piece was removed,” but said it would reduce the expected revenue the provision would generate from $313 billion to $258 billion.

The tax revenue lost by repealing these two provisions will be covered by a new excise tax on share buybacks, where public companies buy their own shares on the open market to reduce the amount available to the public and raise the price .

Schumer said he “hated” the buyback process because the money companies spend on it could otherwise be spent on job creation or research and development.

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

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

The exact amount of the drought-resilience spending was still being debated among Senate Democrats Friday afternoon, but was expected to be in the billions of dollars, sources said.

“It’s gonna be hell”

A handful of Senate Republicans criticized the bill from all sides during a Friday morning media availability and said they would make the process of amending it as painful as possible for Democrats.

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

Sen. Roger Marshall, a Kansas OB-GYN before he joined 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 pharmaceuticals have given us and saved millions of lives?” Marshall said.

Sen. Bill Cassidy of Louisiana said the bill would do little to address inflation, despite the Democratic 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 these people I represent,” he said. “People don’t drive 15-year-old 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 increase energy costs that drive inflation.

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

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 hard-fought series of votes for outrunning Republicans to win GOP support for a bill to boost semiconductor manufacturing while keeping the spending-only bill alive. Democrats.

Minority Leader Mitch McConnell had said he would not support the semiconductor bill if Democrats still planned to pursue a reconciliation bill. However, several Republicans voted yes on the measure last week, only to see a 725-page Schumer-Manchin bill released hours later.

“So what’s vote-a-rama going to be like?” said Graham. “It will be like hell.”

Weekend session

Schumer said the Senate will convene 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 significant impact on the federal budget, was still considering the measure Friday.

Once 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 fast-paced amendments in what’s 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 pass the bill.

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