Senate Democrats have secured the last vote needed to advance their tax and climate reconciliation package.
Sen. Kyrsten Sinema (D-Ariz.) — the last Democratic holdout — announced this evening she would back the package that would provide $369 billion for climate and energy spending. Central to her support was the removal of a carried interest tax rate provision, she said.
“We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said in a statement. “Subject to the Parliamentarian’s review, I’ll move forward.”
Sinema vowed to work with Sen. Mark Warner (D-Va.) to address tax concerns affecting hedge funds.
Sinema was also said to be seeking $5 billion in drought resilience money. Her statement did not mention the provision.
The announcement locks in support from all 50 Democratic senators. Under the rules of reconciliation, a simple majority is needed to pass measures related to budget and spending. Vice President Kamala Harris would break a tie.
Majority Leader Chuck Schumer (D-N.Y.) defended the compromise, even if removing the carried interest provision takes away $14 billion in deficit reduction.
“The agreement preserves the major components 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,” Schumer said in a statement.
Schumer said the Senate would vote Saturday on a motion to proceed. The parliamentarian is still reviewing whether provisions in the package meet reconciliation rules.