Habemus Deal on Inflation Reduction Act with Senator Sinema

After negotiations with Chuck Schumer and Joe Manchin, Arizona Democratic Senator Kyrsten Sinema has signaled she would vote to proceed with the Inflation Reduction Act if the Senate Parliamentarian rules the legislation, with the provisions contained in the text, can proceed through the reconciliation process.

According to numerous news reports like Politico, the Washington Post, and NBC News, the changes in the legislation, to garner Sinema’s support, are:

  • The removal of the carried interest provision which was priced at $14 billion.
  • An exemption for qualifying American Manufacturers from the new minimum Corporate Tax Rate which calculates at approximately $40 billion.
  • The inclusion of a one percent excise tax on stock buybacks that could generate $73 billion in new revenues.
  • The insertion of five billion dollars toward drought resiliency.
  • Provisions to reduce the costs of insulin would be included in the Prescription Drug component of the legislation. This was an addition championed by Georgia Senator Raphael Warnock.

In a short statement following the deal, Senator Sinema relayed:

“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. Subject to the Parliamentarian’s review, I’ll move forward.”

Senate Majority Leader Chuck Schumer, who had scheduled to start the voting procedures on the Inflation Reduction Act on Saturday, offered:

“I am pleased to report that we have reached an agreement on the Inflation Reduction Act that I believe will receive the support of the entire Senate Democratic conference. The final version of the Reconciliation bill, to be introduced on Saturday, will reflect this work and put us one step closer to enacting this historic legislation into law.”

Upon hearing the news of the deal with Senator Sinema, President Biden issued a statement through the White House Press Office which read:

“Tonight, we’ve taken another critical step toward reducing inflation and the cost of living for America’s families. The Inflation Reduction Act will help Americans save money on prescription drugs, health premiums, and much more. It will make our tax system more fair by making corporations pay a minimum tax. It will not raise taxes on those making less than $400,000, and it will reduce the deficit. It also makes the largest investment in history in combatting climate change and increasing energy security, creating jobs here in the US, and saving people money on their energy costs. I look forward to the Senate taking up this legislation and passing it as soon as possible.”




5 thoughts on “Habemus Deal on Inflation Reduction Act with Senator Sinema”

  1. “What exactly is Congress changing about drug prices?”

    “For the first time, the federal health secretary would be able to directly negotiate the prices of certain expensive drugs each year for Medicare. This starts in 2026 with 10 drugs and increases to 20 drugs by 2029. To qualify for negotiation, the drugs would have to be on the market for several years.”

    “People on Medicare won’t have to pay more than $2,000 a year in out-of-pocket costs for prescription drugs, which will make a big difference for seniors with certain conditions like cancer and multiple sclerosis. This would kick in in 2025.”

    “And, starting next year, if drug companies raise the prices of their drugs faster than inflation, they’ll have to pay a rebate to Medicare.”


    • I’m surprised that Sinema is allowing this anemic amount of prescription drug price regulation to go forward. Ten drugs starting in 2026.

      If you’re already in your 80s, you’ll probably be dead before this takes effect.

      Even so, Big Pharma hates it. So what happened? Didn’t they pay enough money to Sinema?

      • Every time the good Senator opens her mouth she should be asked “Is that what your Wall Street donors told you to say?”.

        • “As of October 2021 (the most recently available month), the average Social Security check benefit for retired workers was $1,562.66 per month.” (Google)

          All those folks living on 1.5K / mo should be greatly relieved that if they live another 3 yrs they won’t pay more than 2K / yr for their medicine.

          Thank you, Senator Sinema.

          I keep thinking about where Build Back Better got started. Way back when free community college was in the plan.

          I really hope the Democrats stop running on progressive ideas that really aren’t even progressive anymore. They are mainstream in other countries. But either way, they can’t deliver. Whatever the reason, whether it’s the traitors like Sinema or the lobbyists or the payoffs or whatever. They can’t deliver progressive policies.

          Instead they’re going to pass this beaten down, watered down skeletal remains of what started out as some pretty good ideas.

          But we gotta vote for the Dems, cause they ain’t Fascists.

  2. The excise tax on stock buybacks is a good idea, but why stop there? The United States instituted a transfer tax on all sales or transfers of stock in The Revenue Act of 1914. Instead of a fixed tax amount per transaction, the tax was in the amount of 0.2% of the transaction value (20 basis points, bips). This was doubled to 0.4% (40 bips) in 1932, in the context of the Great Depression, then eliminated entirely in 1966. Bring back the transaction tax on all stock transfers, and it will generate more than enough revenue to offset Sen. Sinema’s gift to her Private Equity campaign contributors by preserving their carried interest loophole.

    What does Sen. Manchin say about dropping the carried interest loophole, because that was his “must” demand earlier? That and the separate bill regarding coal, oil and gas producers.

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