What You Need to Know
- Sen. Kyrsten Sinema, D-Ariz., says she won't vote for the bill if it eliminates the carried interest tax break.
- Schumer said Thursday the Senate will vote soon on the bill.
- The CBO says the bill would cut deficits and net taxes once it is phased in.
The Inflation Reduction Act of 2022 is “in trouble,” according to Greg Valliere, chief U.S. policy strategist for AGF Investments.
Why? Senate Democratic leaders are now “scrambling to appease” Sen. Kyrsten Sinema, D-Ariz., who has made demands this week to colleagues in private negotiations that she “wants no carried interest provision or big corporate tax hikes — or she will walk, leaving Democrats one vote short of victory,” Valliere said Thursday morning in his Capitol Notes email briefing.
Senate Majority Leader Chuck Schumer, D-N.Y., said Thursday afternoon on the Senate floor, however, that the Senate will vote “soon” on the Inflation Reduction Act.
“I expect we will have some late nights and extended debates here on the floor,” Schumer said. “But in the end Democrats are going to make good on our word to pass the Inflation Reduction Act.”
Schumer said that the Senate expects to vote on the motion to proceed to the reconciliation legislation, or Inflation Reduction Act, on Saturday afternoon.
The carried interest provision, “like Rasputin, seemingly cannot be killed,” Valliere said. “Sinema wants it out of the final bill, and she probably will succeed.”
Also, the proposed 15% minimum corporate tax “may have to be scaled back to appease her,” Valliere said. Bloomberg reported that changing the tax provisions “risks irking” West Virginia Senator Joe Manchin, who negotiated the package with Schumer.
“Manchin has said he is ‘adamant’ that the carried interest change remain in the bill,” Bloomberg reported.
The outlet reported Wednesday that Manchin told reporters he has not heard of Sinema trying to remove the carried interest provision. Hannah Hurley, a spokesperson for Sinema, declined to comment about any requests to change the bill, Bloomberg said.