Sinema’s support tightened after a last-minute change to the bill that introduces a 1 percent excise tax on share buybacks by major companies. A measure to crack down on preferential treatment of private equity and hedge fund earnings, known as “carried interest,” was repealed. “The deal will include a new excise tax on stock buybacks that will bring in much more revenue than the carried interest provision, meaning the deficit reduction number will remain at $300 billion,” said a Democrat familiar with the talks. The deal paves the way for the first procedural vote on the bill in the upper chamber of Congress on Saturday, with a final vote in the Senate possible by the end of the weekend before it is approved by the House of Representatives. Biden said he looks forward to the Senate taking up the bill soon. If enacted, the bill would invest $369 billion in clean energy incentives designed to boost the fight against climate change, as well as measures to lower prescription drug costs by giving the government power to negotiate prices . It would also impose a 15 percent minimum tax on large corporations, helping to reduce the budget deficit by $300 billion over the next 10 years. The plan is smaller and far less ambitious than Biden’s original $3.5 trillion Build Back Better legislation, which failed to pass Congress last year amid divisions between moderate and progressive Democrats. But it would still represent a major legislative victory for the president and Democrats heading into the midterm elections in November, when they face an uphill battle to protect slim majorities in the House and Senate. “I’m pleased to report that we’ve reached an agreement on the Lower Inflation Act that I believe will have the support of the entire Senate Democratic conference,” said Senate Majority Leader Chuck Schumer. “I have had many productive discussions with members of our conference over the past three days and we have addressed a number of important issues they have raised.” In its statement, Sinema said it would “move forward” with the bill after agreeing to “remove the carried interest provision, protect advanced manufacturing and boost the clean energy economy.” The legislation is strongly opposed by corporate America and congressional Republicans, who have criticized it as an extension of Biden’s 2021 political spending, which they blame for overheating the economy.
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Sinema also secured a concession from Democrats to exempt write-offs for certain capital investments, known as accelerated depreciation, from the minimum tax, a top priority for businesses. But Jay Timmons, the president of the National Association of Manufacturers, tweeted that he remained “skeptical” about the package. The deal with Sinema followed a deal Schumer reached last month with Joe Manchin, the West Virginia senator, and another Democratic inmate. With Republicans united in opposition, passage of the law would require every Democrat in the evenly divided Senate to vote in favor, with Kamala Harris, the vice president, casting the deciding vote. It will then have to go through the House in order to be signed into law by Biden.
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