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Sinema Gets Earful From GOP and Business Lobby in Bid to Halt Tax Plan

(Bloomberg) -- Senator Kyrsten Sinema has been huddling with Republicans and fellow Democrats while holding the decisive vote that will determine whether her party at last gets a tax, climate and health bill passed or suffers another stinging defeat right before the midterm congressional elections.

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The Arizona Democrat has been the object of furious lobbying from both sides as she remains publicly silent about her position on the deal cut by fellow moderate Senator Joe Manchin and Senate Majority Leader Chuck Schumer for a $433 billion spending package. The whittled-down version of President Joe Biden’s economic agenda requires support from all 50 members of the Democratic caucus to pass the Senate.

Sinema could insist on changes, particularly to a provision narrowing the carried-interest loophole, which she hasn’t supported in the past. Or she could opt to accept or deny the package in full. Whatever she does will determine the fate of the legislation that Schumer and other Democrats are driving to finish before next week.

Sinema’s office has insisted that she is waiting to make a decision until Elizabeth MacDonough, the Senate’s top rules official, determines whether the package comports with strict budget rules to pass by a simple majority.

“She’s reviewing the text and will need to see what comes out of the parliamentarian process,” Sinema spokeswoman Hannah Hurley said Wednesday.

While some White House aides are privately expressing guarded optimism about the bill’s chances, Sinema remains a mystery to many in her party, including Biden. The administration has taken a hands-off approach with Sinema and is avoiding a heavy pressure campaign, people familiar with the White House’s strategy said.

But there’s a lobbying blitz underway by Republicans and corporate interests to try and get her to shrink or kill either the carried-interest provision or the 15% minimum corporate tax, which together raise more than $300 billion over a decade. That’s a significant portion of the $739 billion in total revenue in the bill and a key factor in maintaining Manchin’s support for the deal.

So far, the Senate Finance Committee isn’t involved in making any changes to the tax provisions to get Sinema on board, according to a person familiar with the situation.

Sinema in October publicly praised the idea of a corporate minimum tax. One possible tweak could be making an exception for cost recovery and depreciation tax breaks to benefit domestic manufacturing. But such a change could wipe out a third of the revenue from the minimum tax.

Lobbying Push

Sinema has been meeting with the business community to hear their concerns. Danny Seiden, the president and CEO of the Arizona Chamber of Commerce, tweeted his thanks to her for meeting to discuss the bill.

Sinema, who has avoided talking to the press, spent more than an hour Tuesday evening talking to Republicans, who are universally opposed to the Schumer-Manchin plan. That includes a lengthy conversation Tuesday on the Senate floor with GOP leader Mitch McConnell.

At one point, Sinema noticed reporters watching. She smiled and waved, before heading into the Republican Cloakroom.

Afterward she was seen talking to several Democrats, including Mark Warner of Virginia, climate advocates Tina Smith of Minnesota and Brian Schatz of Hawaii, and Patty Murray of Washington, the No. 3 Democrat.

Manchin talked with her earlier in the day as she took a turn presiding over the Senate, as did Senator Chris Coons of Delaware — a close ally of the White House.

Schumer said Tuesday that Democrats would pass the package and have been talking to Sinema. But they’ve been frustrated before by both Manchin and Sinema.

Even if Sinema decides to trim or nix the taxes entirely, including a carried interest provision she has previously opposed, Democrats could salvage most of the package. They don’t actually have to have the deficit reduction in the plan under budget rules, though that had been a key to getting Manchin’s support.

Democrats, meanwhile, would be taking a risk if they put the bill on the floor without having Sinema’s pledge to back it ahead of time. A Democratic defection at the end of the process would be fatal.

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