Senate Maj. Leader Chuck Schumer and Sen. Joe Manchin, D-W.Va., threw a legitimate curveball at their Senate colleagues Wednesday when they abruptly announced a reconciliation deal much broader than almost anyone thought possible just days ago.
But Manchin hasn’t been the only Democratic stumbling block to passage of any deal and now the spotlight shifts to Sen. Kyrsten Sinema, D-Ariz., who has yet to comment on the new agreement.
The provisions that mirror the White House framework for the Build Back Better Act are likely to be fine with her — that includes a 15% corporate minimum tax, prescription drug savings, Affordable Care Act funding and more. A few weeks ago, her office pointed NBC News to a supportive statement she issued on that October 2021 framework.
It’s the carried interest tax provision that could be a problem for Sinema.
Last year, she conveyed to Democratic leaders that she opposed closing the carried interest tax break, which affects investment managers. That provision was dropped from the House bill as a result. Her office declined to comment to NBC News on Wednesday when asked about that provision being added back in the Schumer-Manchin deal.
That said, carried interest is a small piece of this new agreement, estimated at $14 billion in revenues out of an estimated $739 billion. It’s not necessary to making the math work and wouldn’t necessarily torpedo the bill if it had to be removed. But Sen. Joe Manchin, D-W.Va., supports addressing carried interest, and Sinema has been the only one of the 50 Senate Democrat to register opposition, according to multiple sources.
If Sinema remains opposed to touching that tax break, there has been some desire among Democrats to put it on the floor and dare her to vote no — she’s up for re-election in 2024, and protecting a tax break for upper earners isn’t a popular position in Democratic primaries. Or Democrats could strip it and leave the rest of the bill intact.
Sen. Debbie Stabenow, D-Mich., said regarding Sinema: “She will have to make a decision but I know that her concerns were kept in mind when putting this together.”