Dems, Sinema Reach Accord on New Taxes in Reconciliation Package

Agreement reached on removing carried interest provision

• Democrats, Sinema reach deal on new taxes in Inflation Reduction Act. Sen. Kyrsten Sinema (D-Ariz.) said she would “move forward” on a revised version of Senate Democrats’ health care, climate and deficit-reduction package, after party leaders agreed to scale back some of their original tax proposals. “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. From here, Sinema said she would await a final review from the chamber’s parliamentarian — a critical step in the process that allows Democrats to move their spending bill — at which point she would “move forward.” Any major change would reduce the roughly $300 billion expected to be available for deficit reduction.

     Sinema said she would work on carried-interest provisions in the future with Sen. Mark Warner (D-Va.). “Following this effort, I look forward to working with Senator Warner to enact carried interest tax reforms, protecting investments in America’s economy and encouraging continued growth while closing the most egregious loopholes that some abuse to avoid paying taxes,” she said.

• Senate timeline: The Senate on Saturday will begin consideration of Democrats’ massive tax, health care and climate plan, teeing up a weekend of around-the-clock votes. Senate Majority Leader Charles Schumer (D-N.Y.) announced that the Senate will begin consideration of a $740 billion budget reconciliation package that would alter the tax code and tackle climate change on Saturday afternoon. If senators vote to proceed, they will then debate for up to 20 hours before holding an open-ended series of votes, known as a vote-a-rama. That process would set the stage for a final vote on Sunday or perhaps early Monday morning, senators say. 

• The Senate parliamentarian met Thursday with the Environment and Public Works Committee and Friday will discuss matters with the Senate Finance Committee.

• House timeline: House Democrats will bring their members back next week, likely Wednesday or Thursday, assuming the Senate passes the measure on the Senate timeline above. Democrats said they expect it will pass, which would send it to President Joe Biden for his signature.