In private conversations, Sinema has expressed concern about key parts of the Democrats’ plan to pay for their climate and health care package: imposing a 15% tax floor on large corporations and taxing so-called carried interest, which would mean impose a new tax on hedge fund and private equity managers. But if Democrats bow to their demands, they could be facing a revenue shortfall of roughly $100 billion in a package that West Virginia Sen. Joe Manchin wants to ensure includes $300 billion of dollars in deficit savings.
As a result, Democrats are scrambling to find new sources of revenue to meet the goal of saving $300 billion over a decade. One idea on the table: imposing a special tax on corporate share buybacks, which Democrats believe could help them achieve their goal.
“Failure is not an option,” said Sen. Richard Blumenthal, D-Connecticut, who echoed the view of much of his caucus that Sinema will eventually join.
Sinema and his aides declined to comment.
Sinema’s support is critical since all 50 Republicans will oppose a plan they say would hurt the economy and cost far more than Democrats say, so any Democratic defections could sink it.
On Thursday, Senate Majority Leader Chuck Schumer announced that the Senate will reconvene on Saturday and plans to take the first procedural vote to proceed with the bill. If the vote is supported by all 50 members of the Democratic caucus, there would be up to 20 hours of debate. After debate time, there would be a process colloquially known on Capitol Hill as “vote-a-rama,” which is the marathon series of votes on amendments without a time limit before the final vote. If the bill ultimately passes, the House would have to act. Democrats are trying to wrap up negotiations and pass their economic bill before leaving town for a month-long break in August. The bill still needs to be approved by the Senate parliamentarian to advance the rules surrounding reconciliation, which would allow the law to be passed by a simple majority.
It is unclear when MP Elizabeth MacDonough will announce her decision on the package. A Democratic aide told CNN that the Senate Finance Committee’s energy provisions, particularly the clean energy credits, are scheduled to come before the Senate floor on Friday.
Schumer last week announced a deal with West Virginia Sen. Joe Manchin that contains a number of key goals for the party on health care costs, taxes and fighting the climate crisis. The measure would invest $369 billion in energy and climate change programs with the goal of reducing carbon emissions by 40% by 2030. For the first time, Medicare would be empowered to negotiate the prices of certain drugs and limit out out-of-pocket costs of $2,000 for enrollees in Medicare drug plans. It would also extend for three years the enhanced subsidies for Affordable Care Act coverage.
It is unclear whether all of these provisions will survive parliamentary review.
Sinema was not part of the deal, and learned of it when the news broke last week. He has declined to comment publicly on the deal, with aides saying only that he would wait until the Senate’s parliamentary review is done before taking a position. However, he has made his demands clear with Democratic leaders, including seeking to add $5 billion to help the Southwest deal with its multi-year drought, according to multiple sources.
While Democrats are courting her, Republicans and business groups are making their concerns known. In a private call this week, the Arizona Chamber of Commerce and the National Association of Manufacturers urged Sinema to push to change the minimum business tax. The president of the Arizona business group, Danny Seiden, told CNN that the business community expressed opposition to the 15 percent tax provision, noting that it would particularly affect manufacturers who take advantage of a tax credit ‘accelerated depreciation that reduces your tax burden.
“Is it written in a bad way?” Sinema asked, according to Seiden, president of the Arizona Chamber of Commerce, who relayed the call to CNN.
“It gave me hope that she’s willing to open this up and maybe make it better,” Seiden said.
Two sources told CNN that Sinema has privately aired those concerns with top Democrats, arguing it would hurt manufacturers, even in his state.
These are changes proposed by Democrats to the depreciation allowance that the GOP enacted in the 2017 tax law, which allows companies to deduct 100% of the cost of an asset in the year it is placed in service. The new law proposes to gradually reduce it from next year.
Defending the new tax, the Democratic-led Senate Finance Committee on Thursday released data from the nonpartisan Joint Committee on Taxation showing that up to 125 billion businesses on average had an effective tax rate of only 1, 1 percent in 2019. The committee argues in its statement that this shows the “lower tax rates” that some companies can pay.
“While we know that billion-dollar companies are avoiding paying their fair share, these tax rates are lower than we might have imagined,” said Senate Finance Chairman Ron Wyden, D-Oregon . “We’re going to put an end to that with our 15 percent minimum tax.”
This story and headline were updated with additional updates Thursday.
CNN’s Jessica Dean, Ella Nilsen, Clare Foran and Alex Rogers contributed to this report.
[ad_2]
Source link
