Senator Kyrsten Sinema agreed to move ahead on the $369 billion Inflation Reduction Act, paving the way for passage of a long-awaited package of climate and clean energy investments. The Arizona Democrat announced Thursday night that she and Democratic leaders had struck a deal to change some of the pay-fors in the bill, which under Senate reconciliation rules can pass with just 50 votes but may only deal with issues of taxing and spending.
Changes to the tax provisions appear to have increased the revenue side of the bill’s ledger: It removes the language narrowing the so-called carried interest loophole, which impacts hedge fund managers and private equity and was to have raised $14 billion, and accelerated depreciation of investments, which would have brought in $40 billion. Instead, the senators agreed to levy a new excise tax on stock buybacks, which some analysis projected would net between $73 billion and $125 billion.
The new deal also adds $5 billion in drought resiliency provisions.
Provided there aren’t any major curveballs from the Senate parliamentarian from the process, known as the Byrd Bath, to determine if all the included provisions meet the rules under reconciliation, the final Senate vote would take place late Monday or early Tuesday. Majority Leader Chuck Schumer said he plans to begin procedural votes on Saturday, which will be followed by Monday’s “voterama” where senators from both parties will put forward dozens of poison-pill messaging amendments, none of which is likely to end up in the final legislation.
The House is on recess, but is expected to return sometime before the Affordable Care Act subsidies that are extended in the bill expire on August 17.
Independent studies peg the IRA’s emissions reductions at 40% or more from 2005 levels by the end of this decade, putting the U.S. within reach of its Paris climate targets. Analyses also predict the legislation would create between 1.5 and 9 million jobs, prevent thousands of premature deaths and nearly half a million lost workdays by mid-century, and save households hundreds of dollars per year on utility bills.
(Sinema: Washington Post $, CNN, New York Times $, NPR, Politico, USA Today, NBC News, The Guardian, AP, The Hill, Bloomberg $, Reuters, E&E $; Analyses: Energy Innovation, Rhodium, the REPEAT Project, Blue-Green Alliance, Resources for the Future, Moody’s Analytics, BailoutWatch)