Why it matters: Sinema is the only senator potentially standing in the way of Democrats pushing for President Biden’s long-term goal of passing an ambitious package to tackle climate change, health care and taxes — renamed the reducing inflation in 2022″.

That position gives her enormous power as Democrats await a verdict from the Senate House on whether the bill complies with the “Byrd Rule,” which controls what provisions can be included in the budget reconciliation process. The fact that the negotiations were conducted in complete secrecy between Senate Majority Leader Chuck Schumer (DN.Y.) and Sen. Joe Manchin (DW.V.) — taking Sinema by surprise — left room for an 11th-hour intervention. Cinema has so far refused to consider whether or not to support the bill until the lawmaker issues her ruling on the measure.

What we’re hearing: Sinema is considering significantly boosting funding in the Southwest drought and water security reconciliation bill, sources familiar with its thought process tell Axios.

He sees the current $369 billion climate and energy portion of the bill as insufficient to address resilience funding.

On taxes, Sinema has concerns with the structure of the minimum corporate “book tax” of 15 percent and whether the burden could be passed on to employees, the sources said.

Sinema supports cracking down on tax avoidance but has long voiced its opposition to closing the carried interest loophole. He is concerned that the provision, which would contribute $14 billion to repay the $740 billion total, could undermine economic competitiveness, the sources said.

Behind the Scenes: Sinema is meeting privately, both virtually and in person, with key stakeholders in Arizona as it continues to work on its assessment of the bill.

Sinema last week visited Flagstaff, Arizona, where he met with local officials still reeling from recent flooding and a wildfire that ravaged the state. Arizona is one of the hottest states in the US, and the state’s largest county, Maricopa County, has already seen a record number of heat-related deaths this year. “There are some people who were surprised to learn that Kyrsten was excited about climate measures last year, because they rightly think of her as a centrist. But she’s a senator from Arizona, first and foremost,” John LaBombard, former director of communications for Sinema and SVP at ROKK. Solutions tells Axios.

In a Tuesday phone call with the Arizona Chamber of Commerce, local businessmen and manufacturers discussed with Sinema what the proposed 15 percent minimum corporate tax and closing the carried interest loophole would mean for Arizona.

The private equity industry, which has contributed heavily to Sinema, has been pushing hard to drop the portion of the carried interest. “I remember last year, hearing comments from small business owners, concerned about the potential impact of any changes in tax policy and how it might affect their capital investment flows,” LaBombard said. “He’s someone who errs on the side of caution when it comes to changing tax policies … obviously, I think [their input] is formed where it is in the financial parts of this bill”.

What they say: “What’s clear from our discussion is that she’s taking a careful and diligent approach as she considers her position on this legislation,” Danny Seiden, CEO of the Arizona Chamber, told Axios’ Hans Nichols.

“He was very interested in learning what specific impact the tax provisions will have on Arizona manufacturers – and we believe he will seriously consider those impacts as negotiations continue in the coming days.”