“We agreed to remove the carried interest tax provision, protect advanced manufacturing and strengthen the clean energy economy in the Senate budget agreement legislation,” Sinema said. “Subject to the MP’s criticism, I will proceed.” Cinema’s support is critical since all 50 Republicans will oppose a plan they say would hurt the economy and cost far more than Democrats support — so any Democratic defection could sink it. As CNN earlier reported, Democrats agreed to add an excise tax on the companies’ stock purchases as part of the deal. “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 will remain at $300 billion,” a Democrat familiar with the deal told CNN. The $300 billion deficit-reduction goal was a top priority of Sen. Joe Manchin, whose deal last week revived the legislation. “The deal preserves key elements of the Inflation Reduction Act, including reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit by $300 billion dollars,” said Senate Majority Leader Chuck Schumer. a statement. “The final version of the Reconciliation Bill, to be introduced on Saturday, will reflect this work and bring us one step closer to passing this historic legislation into law.”

High risk negotiations

Earlier Thursday, top Senate Democrats engaged in high-stakes negotiations with Sinema, actively discussing possible changes to key tax items in order to secure the Arizona moderate’s support. In private discussions, Sinema had expressed concern about key parts of the Democrats’ plan to pay for their climate and health care package — imposing a 15 percent minimum tax on big corporations and taxing so-called carried interest, which would mean the imposing a new levy on hedge fund and private equity managers; As a result, Democrats have been scrambling to find new sources of revenue to meet their goal of $300 billion in savings over a decade. “Failure is not an option,” Sen. Richard Blumenthal, D-Connecticut, said, echoing the view of much of his caucus earlier Thursday that Cinema would eventually join. Schumer announced earlier Thursday that the Senate will reconvene on Saturday and plans to hold the first procedural vote to move the bill forward. If the vote receives the support of all 50 members of the Democratic caucus, then there will be up to 20 hours of debate. After debate time, there will be a process referred to colloquially on Capitol Hill as “vote-a-rama,” which is the marathon series of amendment votes without a time limit before the final vote. If the bill is finally approved, the House will have to act. Democrats are trying to wrap up negotiations and pass their budget vote before leaving town for a month-long August recess. The bill still needs to be approved by the Senate in order to proceed under reconciliation rules, which would allow the legislation to be passed by a simple majority. It’s unclear when Congresswoman Elizabeth MacDonough will announce her decision on the package. A Democratic aide told CNN that the Senate Finance Committee’s energy provisions — mainly the clean energy appropriations — are set to go before the Senate on Friday.
Schumer announced a deal with Manchin last week 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 percent by 2030. For the first time, Medicare would be authorized to negotiate the prices of certain drugs and would limit the cap it costs $2,000 for those enrolled in Medicare drug plans. It would also extend expiring enhanced subsidies for Affordable Care Act coverage for three years. It is unclear whether all of these provisions will survive the MP’s review.

Great pressure on Cinema

Sinema was not part of the deal, as he found out when the news broke last week. She had declined to comment publicly on the deal, with aides saying only that she would wait until the Senate’s congressional review was done before taking a position. But she had cleared her demands with Democratic leaders, including seeking to add $5 billion to help the Southwest deal with its years-long drought, according to multiple sources. As Democrats courted her, Republicans and business groups made their concerns known. In a private call this week, the Arizona Chamber of Commerce and the National Association of Manufacturers urged Sinema to push for a change in the minimum corporate 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 hit manufacturers who benefit from an accelerated depreciation tax credit that lowers their tax burden. “Is this spelled badly?” Cinema asked, according to Seiden, the president of the Arizona Chamber of Commerce, who relayed the call to CNN. “It gave me hope that she’s willing to open it up and maybe improve it,” Seiden said. Two sources told CNN that Sinema had privately aired those concerns to top Democrats, arguing it would hurt manufacturers, including in her state. At issue are changes proposed by Democrats to the GOP’s bonus depreciation in the 2017 tax law, which allows companies to deduct 100 percent of the cost of an asset in the year it is put into service. The new legislation proposes a phase-out from next year. Defending the new tax, the Democratic-led Senate Finance Committee released data Thursday from the nonpartisan Joint Committee on Taxation showing that up to $125 billion in companies had an average effective tax rate of just 1.1 percent in 2019 .The commission argues in the publication that this shows the “floor tax rates” that some companies are able to pay. “While we know that billion-dollar corporations avoid paying their fair share, these tax rates are lower than we might imagine,” 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 have been updated with additional developments on Thursday. CNN’s Jessica Dean, Ella Nilsen, Clare Foran and Alex Rogers contributed to this report.