Kyrsten Sinema Agrees to Manchin Deal After Cutting Taxes on Hedge Funds, Corporations

Arizona Sen. Kyrsten Sinema said Thursday that she is ready to “move forward” with Sen. Joe Manchin’s climate deal if the Senate parliamentarian signs off, CNN reports.

"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 in a statement. "Subject to the Parliamentarian's review, I'll move forward."

Sinema had been the lone Democratic holdout on the deal Manchin struck with Senate Majority Leader Chuck Schumer to provide over $360 billion in climate funding, allow Medicare to negotiate drug prices, extend Obamacare subsidies and crack down on tax avoidance while reducing the deficit by about $300 billion.

Tax measures cut:

Sinema was able to convince Democrats to cut a measure limiting the carried interest loophole, which allows hedge funds and private equity managers to pay a 21% capital gains tax on income instead of the typical 37% top marginal tax rate.

Sinema also secured about a $40 billion cut from the proposed 15% corporate minimum tax by exempting certain manufacturers.

Sinema said in a statement that she would work with Virginia Sen. Mark Warner to "enact carried interest tax reforms, protecting investments in America's economy and encouraging growth while closing the most egregious loopholes that some abuse to avoid paying taxes."

The deal will instead include a 1% excise tax on corporate buybacks.

What now?

Schumer said Thursday that he wants to hold an initial vote on Saturday on the reconciliation bill, which allows Democrats to avoid the specter of a filibuster and pass legislation with a simple majority.

The Senate parliamentarian still has to rule on whether certain measures can be included in the budget process.

If all 50 Democrats vote for the bill, it will trigger 20 hours of debate followed by a lengthy marathon session of proposed amendments.

It could take several days to pass the bill in the Senate, which would then have to send it to the House.


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