The Inflation Reduction Act, agreed to by 49 Democrats and President Biden, is a bill that Americans need. But it will need 50 votes (plus the vote of Vice President Harris) to pass the Senate. The lone holdout among Democrats is Krysten Sinema of Arizona. She has refused, at least so far, to say whether she supports the bill or not.
Here is what the editorial board of The Washington Post has to say about this:
Senate Democrats have overcome obstacle after obstacle in their push to pass a reconciliation package, and this week they’re close to the finish. Unless a final something — or someone — stands in their way.
Sen. Kyrsten Sinema (D-Ariz.) reportedly wasn’t included in talks between Sen. Joe Manchin III (D-W.Va.) and Senate Majority Leader Charles E. Schumer (D-N.Y.) as they hammered out the details of the surprise Inflation Reduction Act announced last week. The deal, nonetheless, is largely in line with the preferences she laid out in past negotiations: from its relatively modest reforms to prescription drug pricing to action on climate to the 15 percent corporate minimum tax rate estimated to raise $313 billion. Indeed, that the legislation neglects broader hikes on the highest-income Americans is itself a form of concession. There is, however, a big exception. The closure of the carried interest loophole has been a boogeyman for Ms. Sinema from the beginning. But it is in the bill before her today — and for good reason.
The carried interest loophole is essentially a way for fund managers to make a lot of money and pay the government very little back because the share of the fund’s profits they receive for their work is taxed at a top rate of just under 24 percent — dramatically less than the 37 percent top rate for ordinary income. This giveaway is so valuable that many have it to thank for the bulk of their fortunes. The Wall Street Journal reported last week that Blackstone Inc. Chief Executive Stephen Schwarzman received somewhere around $150 million in carried interest compensation last year; two other executives at the company received close to $92 million and $77 million. There’s simply no excuse for any lawmaker who purports to care about economic justice or equality to oppose eliminating the carried interest loophole.
Yet all the same, Congress — many of whose members benefit from the donations of the deep-pocketed — could allow this scandal to persist, especially if Ms. Sinema demands it. She shouldn’t. Republicans have been making hay in recent days of an analysis by the nonpartisan Joint Committee on Taxation, claiming that the reconciliation would raise rates on those earning less than $400,000 per year, contrary to President Biden’s pledges. This is mostly meaningless. The theory that some of the new 15 percent minimum tax on corporations would be passed on to employees and to shareholders doesn’t change the reality that the bulk of the burden would fall on the richest and the bulk of the benefit would redound to those worse off: whether it comes as help affording medicine or health care or as an investment in slowing global warming.
Ms. Sinema shouldn’t sink this bill, most of whose contents she has indicated in the past that she supports. And she shouldn’t sink it because she opposes closing the carried interest loophole. That provision unambiguously aids those who need help most, at the expense only of those who need it not at all.
