Senator Kyrsten Sinema of Arizona and Senator Joe Manchin of West Virginia have been two of the main thorns in the side of Joe Biden’s domestic agenda.
Luckily for Biden and the Democrats, Manchin folded last week into supporting a large reconciliation bill. Sinema has now agreed to key portions of the Build Back Better (BBB) bill in return for corporate tax cuts and tax cuts for the wealthy.
At this point, Sinema’s support is crucial. Democrats are now likely to have enough votes to get this bill through caucus as soon as possible and clear the House for final authorization next week.
What’s in the Monster Bill?
This new bill that was partly contributed to by Sinema and Manchin relates a lot to climate change, healthcare, and taxation.
It’s not as big as the original BBB, having been pared back through negotiations; it’s ironically officially called the Inflation Reduction Act.
It’s the biggest spending package in American history. The bill gives a huge boost to people to pay for Medicare and subsidize drug prices, as well as spending on environmental and other projects pushing green energy.
It includes various tax cuts that have been negotiated by Sinema and Manchin as well.
Find someone who loves you the way kyrsten sinema loves her private equity donors
— Molly Jong-Fast (@MollyJongFast) August 5, 2022
The basic leeway Sinema has gotten for her doors is to loosen the carried tax loophole to go easy on hedge fund traders and private equity professionals.
This would have brought a lot of money into government coffers, but Sinema managed to scale it back on behalf of her wealthy friends, in return for saying she’ll now support the big spending bill.
Sinema is hailing this as a big step forward, especially for “clean energy.” In terms of the money Democrats won’t be getting from taxing hedge funders, they’re going to be slapping a 1% excise tax on stock buybacks.
This provision is expected to lead to about $73 billion in raised revenue that should help offset some of the cost of the new bill.
Senator Kristen Sinema is blatantly pandering to her lobbyists. Shame on her – protecting the rich hedge fund managers and their income while voting against minimum wage increase for the hourly workers. Shame, Shame. I will not vote for her in 2024.
— PK (@PKnjaz) August 5, 2022
Reducing the Deficit
The Inflation Reduction Act is projected to reduce the deficit by $300 billion by saving money over the coming decade.
This includes major investments of $369 billion in clean energy and trying to cut carbon output by 40% by 2030.
The total price tag of the Inflation Reduction Act is $1.5 trillion. Meanwhile, it remains to be seen how throwing more money at the problem will be effective in moving the United States forward or improving our situation.
The latest jobs report is fairly good, but the current state of our economy and inflation is not going to be easily offset.
Many of the measures in this new bill appear to be more ideologically oriented than based on hard science or realistic, prescient financial forecasting.