WASHINGTON—Sen. Kyrsten Sinema, D-Ariz., the last Democratic holdout on the latest $739 billion budget “reconciliation” bill, signed onto it on August 4, opening the way for its passage this weekend. It will be the most significant climate measure passed in U.S. history but the agreement by Sinema did not come without a price.
News reports of Sinema’s conditions include restoring the $13 billion “carried interest” tax break for rich Wall Street hedge fund moguls, plus an unspecified “tweak” to the minimum 15% tax on billion-dollar corporations that right now pay nothing at all.
Sinema’s agreement “to move forward” with the legislation, named the Inflation Reduction Act, provides the needed 50th votes from the Senate’s 48 Democrats and two Independents for the measure, with Vice President Kamala Harris (D) breaking the tie in the evenly split chamber.
The measure, as a budget “reconciliation” bill, can’t be filibustered and needs only a simple majority, not 60 votes, to pass.
Among its provisions, the measure would benefit consumers by extending Affordable Care Act subsidies for three more years for low-and moderate-income people to buy health insurance, provide $369 billion in new tax breaks and subsidies for green jobs, factories, and vehicles to combat climate change, and impose new corporate taxes.
Together, calculations show it would also cut the deficit by a net of $300 billion over 10 years—one price the other holdout, Sen. Joe Manchin, D-W. Va., exacted.
The other reported part of her deal is a tax on stock buybacks, another method corporate chieftains use to enrich their capitalist investors. Analysts calculated last year’s stock buybacks by the Fortune 500 alone totaled $849.6 billion.
The Washington Post said that the buyback tax would be 1%, so it would bring in fewer dollars than those lost by preserving the moguls’ loophole. But other sources, while not offering a specific percentage figure, told USA Today the buyback tax would bring in more than the carried interest loophole loses.
Sinema’s conditions may also be linked to her backers. She sits on the Senate Banking Committee and banks and securities firms, and their executives, are among her biggest campaign donors.
Campaign finance reports show Sinema often caters to the corporate class. She also became infamous for skipping debates and votes on an earlier version of the reconciliation measure in favor of a big-donor fundraiser—in Paris.
OpenSecrets.org reports that from 2017-July 30, 2022, donors who listed banks, brokerages, and investment firms as their employers threw $2.216 million into Sinema’s coffers. That’s second only to giving by retirees ($2.596 million), no great surprise in Arizona.
But the banks and securities firms’ campaign finance committees (PACs) accounted for $318,000 of that sector’s total, and took first place in Sinema’s PAC standings over the years, OpenSecrets adds.
While Sinema’s statement apparently clears the way for final Senate passage of the measure—a top party priority before the midterm elections—the reconciliation bill can be subject to numerous amendments in what lawmakers and reporters term a “Vote-A-Rama.”
And in a long speech just before the Senate adjourned on August 3, Sen. Bernie Sanders, Ind-Vt., said he supports the bill, despite many flaws, and will offer at least one amendment to improve it.
As Budget Committee chair, Sanders wrote the original $2 trillion Build Back Better reconciliation bill, along with Democratic President Joe Biden. But opposition from Sinema and Manchin, plus all 50 Republicans sank it—including its social safety net expansion and its huge increase in federal fines against firms for labor law-breaking.
Now, Sanders would order Medicare to pay Big Pharma no more for prescription drugs than the Veterans Administration pays. VA has the power to bargain drug prices down and has used it.
The Inflation Reduction Act calls for Medicare to eventually bargain down the price of many, not all, drugs, yielding $100 billion more to the Treasury by saving Medicare’s money, Sanders explained.
His amendment, making the mandate immediate and applied to all prescription drugs, would save nine times as much over the next decade, Sanders calculated.
“It is a rather simple solution…By the way, that money could be used to add comprehensive dental, vision, and hearing benefits to every senior in America. It could be used to lower the Medicare eligibility age to at least 60. And it could be used to extend the solvency of Medicare…It is not a very radical idea.”
“End of discussion,” the senator said.
Sanders had other criticisms, too. But he admitted it is the proverbial last legislative train leaving the station before the midterm election, and thus Democrats’ and progressives’ last chance to show they can help the entire country, not just the rich.
“This reconciliation bill falls far short of what the American people want, what they need, and what they are begging us to do. Given this is the last reconciliation bill we will be considering this year, it is the only opportunity we have to do something significant for the American people that requires only 50 votes and that cannot be filibustered.”
One flaw, he said is deleting the original reconciliation bill’s higher fines against labor law-breakers and longer reach against corporate chieftains who do so—and of what’s labor law-breaking, such as captive audience meetings.
“Does this bill make it easier for workers who want to join a union to be able to do so or do they continue to be attacked by their employers, making it hard to form a union? No, this bill does nothing to address that reality.”
“Millions of people today are wondering how they are going to pay their rent, how they are going to buy the food to feed their kids, how they are going to pay off their debt. That is what is going on for half of the people in our country,” the veteran Socialist added.
“They have no representation here, no lobbyists, no nothing. But that is the reality. Does this reconciliation bill address their needs? Does it raise the minimum wage to a living wage or do we continue to allow so many workers to try to get by on 10, 12, 13 bucks an hour?”
Again, Sanders said, the answer is “no.”
Despite the flaws he cited, the AFL-CIO, the Teachers (AFT), and other unions backed the Inflation Reduction Act, before the Sinema-initiated “price.”
“Congress understands we urgently need economic solutions that offer real help for working families,” AFL-CIO President Liz Shuler said the week before. “Taking these steps to lower health care costs and address our broken tax code that allowed the extremely wealthy and the biggest corporations to avoid paying their fair share will deliver fundamental economic change.
“The (clean) energy provisions will leverage more than $1 trillion in private investment, create millions of jobs, and cut climate pollution by 40%. And, importantly, the tax incentives as currently written include labor standards and domestic content requirements, which would create good-paying jobs in construction and manufacturing.
“The Inflation Reduction Act provides real solutions to rising energy and health care costs…It also will improve the lives of working people, seniors trying to pay for their prescriptions, and children who will have the chance to live on a healthier planet.”
Teachers President Randi Weingarten called the Inflation Reduction Act “huge for workers, huge for seniors, and huge for our country, particularly our kids.
“It drives down costs for American families and is paid for by big corporations and the wealthy. It stares down Big Pharma by reining in prescription drug prices, particularly for those on Medicare, reduces healthcare premiums, addresses climate and energy costs, and creates more fairness in the tax code—all while reducing the deficit and cutting inflation.”
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