Senate Dems announce they have the votes to pass Inflation Reduction Act

Senate Democrats Agree on Changes to Their major economic legislationthey announced late Thursday, removing the major hurdle from pushing one of the key priorities for President Joe Biden’s election year across the room in the coming days.

sen. Kyrsten Sinema, D-Ariz., a centrist seen as the main voice, said in a statement she had agreed to changes to the tax and energy provisions of the measure and was ready to “move forward” on the Inflation Reduction Act.

Majority leader Chuck Schumer, DN.Y., said lawmakers had reached a compromise “that I think will get the support” of all Democrats in the chamber. His party will need unanimity to get the measure through the 50-50 Senate, along with Vice President Kamala Harris’ casting vote.

Schumer has said he hopes the Senate can begin voting on the energy, environment, health and tax measure on Saturday. Passage through the House, which Democrats closely monitor, could come next week.

Final congressional approval of the measure before the election year would be an astonishing 11th-hour rescue of Biden’s broad domestic goals, albeit in more modest form. Democratic infighting had embarrassed Biden and forced him to take down a much larger and more ambitious 10-year version of $3.5 trillion, then a $2 trillion alternative, nearly killing the effort.

This bill, negotiated by Schumer and Senator Joe Manchin, the conservative maverick Democrat from West Virginia, would bring in $739 billion in revenue. That would come from tax hikes for high earners and some large corporations, ramping up IRS tax collections, and cutting drug prices, which would save money for the government and patients.

It would spend much of that amount on energy, climate and healthcare initiatives, leaving more than $300 billion left for deficit reduction.

Sinema said Democrats had agreed to scrap a provision that raises taxes on “carried interest,” or profits that go to executives of private equity firms. That’s a proposal she’s long opposed, though it’s a favorite of Manchin and many progressives.

The carry-interest provision is expected to bring in an estimated $13 billion for the government over the next decade, a small fraction of the measure’s total $739 billion revenue.

It will be replaced by a new share buyback tax that will bring in more revenue than that, said a Democrat familiar with the agreement, speaking on condition of anonymity as they were not authorized to discuss the deal publicly. The official gave no other details.

While not providing details, Sinema said she had also agreed to provisions to “protect advanced manufacturing and boost our clean energy economy.”

She noted that Senate MP Elizabeth MacDonough is still reviewing the measure to ensure no provisions have to be dropped for violating the chamber’s procedures. “Depending on the parliamentarian’s assessment, I will proceed,” Sinema said.

“Tonight we took another critical step toward reducing inflation and the cost of living for American families,” said a statement from Mr. Biden. “The Inflation Reduction Act will help Americans save money on prescription drugs, health premiums and more. It will make our tax system fairer by making companies pay a minimum tax. It will not increase taxes on those who earn less than $400,000 , and it will reduce the deficit. It is also making the largest investment in history in fighting climate change and increasing energy security, creating jobs here in the US and saving people on their energy costs. I look forward to it that the Senate adopt this legislation and pass it as soon as possible.”

Schumer said the measure kept the language of the bill on prescription drug pricing, climate change, “closing tax loopholes exploited by big business and the wealthy” and reducing federal deficits.

He said that in talks with fellow Democrats, the party “has addressed a number of key issues that they have raised”. He added that the final measure “will reflect this work and bring us one step closer to transposing this landmark legislation into law.”

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