WASHINGTON (AP) — Senate Democrats have reached an agreement on changes to their main economic legislation, they announced Thursday afternoon, removing the main obstacle to advancing one of President Joe Biden’s top election-year priorities. Biden in the chamber in the coming days.
Sen. Kyrsten Sinema, D-Ariz., a centrist who was seen as the key vote, said in a statement that she had accepted changes to the measure’s tax and energy provisions and was ready to “move forward” on the bill law
Senate Majority Leader Chuck Schumer, D-N.Y., said lawmakers had reached a compromise “that I think will be supported” by all Democrats in the chamber. His party needs unanimity to move the measure to the Senate 50-50, along with Vice President Kamala Harris’ tie-breaking vote.
Schumer has said he hopes the Senate can begin voting on the energy, environment, health and tax measure on Saturday. Approval by the House, which Democrats tightly control, could come next week.
Final congressional approval of the election-year measure would complete a surprising eleventh-hour rescue of Biden’s broad national goals, albeit in a more modest form. Democratic infighting had embarrassed Biden and forced him to scale back a much larger and more ambitious $3.5 trillion, 10-year version, and then a $2 trillion alternative, leaving the effort all but dead .
That bill, brokered by Schumer and Sen. Joe Manchin, the conservative maverick Democrat from West Virginia, would raise $739 billion in revenue. This would come from raising taxes on high incomes and some large corporations, increasing IRS tax collections, and lowering drug prices, which would save money for the government and patients.
Much of that would be spent on energy, climate and health care initiatives, leaving still more than $300 billion for deficit reduction.
Sinema said Democrats had agreed to eliminate a provision that raised taxes on “accumulated interest,” or profits that go to executives at private equity firms. This has been a proposal he has long opposed, even though it is a favorite of Manchin and many progressives.
The reported interest provision was estimated to generate $13 billion for the government over the next decade, a small portion of the measure’s $739 billion in total revenue.
It will be replaced by a new excise tax on stock buybacks that will generate more revenue than that, said a Democrat familiar with the deal who spoke on condition of anonymity because they were not authorized to discuss the deal publicly. The official did not provide any other details.
While not providing details, Sinema said it had also agreed to provisions to “protect advanced manufacturing and drive our clean energy economy.”
He noted that Senate Rep. Elizabeth MacDonough is still reviewing the measure to ensure that no provision should be removed to violate the chamber’s procedures. “Subject to the parliamentarian’s review, I will move forward,” Sinema said.
Schumer said the measure kept the bill’s language on prescription drug pricing, climate change, “closing tax loopholes exploited by big corporations and the wealthy” and reducing federal deficits.
He said that in discussions with his fellow Democrats, the party “addressed a number of important issues that they have raised.” He added that the final measure “will reflect that work and move us one step closer to enacting this landmark legislation.”
THIS IS A BREAKING NEWS UPDATE. Previous AP story follows below.
WASHINGTON (AP) – Democrats considered reshaping proposed taxes on big, wealthy corporations, possibly adding billions for the West’s historic drought, as lawmakers aimed for initial votes Saturday on economic legislation of the party
Senate Majority Leader Chuck Schumer, D-N.Y., announced his schedule Thursday as party leaders worked behind the scenes in hopes of winning the unanimity they’ll need to succeed.
The election-year bill, which includes the top priorities of President Joe Biden and congressional Democrats, would provide hundreds of billions in spending and tax credits to spur clean energy, bolster fossil fuels and renew the government support for people who buy private health insurance. It would raise revenue with tax increases, increase IRS tax collections, and lower drug prices, which would save money for the government and patients.
“We prefer the middle class and working families, instead of the highest. God bless them, they’re doing well,” Schumer said.
Democrats must get the support of all their lawmakers to prevail in the Senate 50-50 and avoid a self-inflicted glaring defeat similar to the one they suffered last November on a much larger version of the package. Republicans are on track to oppose the legislation as a single, saying its tax and spending increases would worsen inflation and damage the economy.
“What do the Democrats want to do with all the money they want to take out of Americans’ pockets in the middle of a recession?” said Senate Minority Leader Mitch McConnell, R-Ky. “They want to lavish hundreds of billions of dollars on an issue that exactly 3% of the country says is our biggest problem: far-left environmental and climate spending.”
Sen. Kyrsten Sinema, D-Arizona, a mercurial centrist, has not made her position clear and is seen as her party’s only potential resistance.
He is part of a group of Western senators seeking to add about $5 billion to the legislation, billed as Congress’ largest climate change measure, to help their states deal with epic drought and wildfires forestry The effort was described by a Democrat with knowledge of the talks who would only speak on condition of anonymity.
Sinema has also expressed interest in reshaping the measure’s 15 percent minimum tax on some companies with more than $1 billion in revenue, said another Democrat who was not authorized to publicly describe the senator’s views. They did not give any details. The proposed tax would raise about $313 billion over a decade, the largest revenue raiser in the legislation.
In defense of that proposal, Senate Finance Committee Chairman Ron Wyden, D-Ore., released figures showing that 100 to 125 corporations reporting an average of $8.9 billion in revenue paid taxes effective taxes of 1.1%. The figures were compiled by the nonpartisan Joint Committee on Taxation in Congress.
Sinema has been critical of another proposal to raise taxes on hedge fund executives and other private equity firms. It would raise $13 billion, a tiny fraction of the bill, and is a favorite of progressives and Sen. Joe Manchin, DW.Va., a conservative Democrat who helped write the overall legislation with Schumer.
The Senate will not be in session on Friday as Democrats continue their talks. This break will also give Senate Rep. Elizabeth MacDonough time to decide whether any of the bill’s provisions violate the chamber’s rules and should be withdrawn.
Republicans want to kill as much of the bill as possible, either with MacDonough’s rulings or with nonstop votes expected to last into Sunday or beyond.
Even if the GOP amendments are defeated, they will consider mission accomplished if they force Democrats to take risky, campaign votes on sensitive issues like taxes, inflation and immigration.
Vice President Kamala Harris may vote to break the 50-50 tie and pass the bill.
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