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Inflation Reduction Act: What’s next for the bill

Yahoo Finance's Jennifer Schonberger joins Yahoo Finance Live to discuss the path ahead for the Democrats' climate, energy, and health care bill after Arizona Senator Kyrsten Sinema has signed onto it.

Video Transcript

[MUSIC PLAYING]

BRIAN CHEUNG: Well, we are tracking the Inflation Reduction Act as it makes its way through Congress, going from bill to law. At least, that's what Democrats are hoping for. Here with more, Jennifer Schonberger of Yahoo Finance. We've been watching one specific senator from Arizona on this. Give us the update.

JENNIFER SCHONBERGER: Good morning, Brian. That's right. The Inflation Reduction Act now looks like it will move forward after Senate Democratic leaders agreed to changes that Senator Kirsten Sinema wanted to support this bill. Here's what's out and what's in. Democratic leaders have agreed to drop narrowing the so-called carried interest loophole, which allows hedge funds and private equity firms to pay a lower tax rate on income. That would have raised 14 billion.

The 15% corporate minimum tax will be changed to ensure manufacturers can still use the accounting method of accelerated depreciation. Billions in drought money to benefit Arizona will be included. And a new 1% excise tax on stock buybacks will be added. This is actually expected to raise more revenue than the provisions getting dropped. Now, Senator Sinema saying in a statement that's subject to the parliamentarian's review, she will move forward with this bill. She's also looking forward to working with Senator Warner to enact carried interest tax reforms.

Sinema was the sole holdout. With her support, the bill now moves forward. Democrats are using a fast track budget procedure known as reconciliation to bypass Republicans to pass this legislation. That means all 50 Democrats must support the bill to pass. In addition, all provisions of the bill must meet the stringent rules of the reconciliation process. The Senate parliamentarian will have to go through these changes. And allowing Medicare to negotiate on prescription drug prices is still undergoing revisions in order to comply with the rules, though Democrats expect to resolve this.

Now, Senate Majority Leader Chuck Schumer is setting up to start debate Saturday. That kicks off the clock for 20 hours of debate, split evenly between Republicans and Democrats. At that point, there will be a votearama, either late Saturday or more likely on Sunday, where senators can offer amendments. That sets up a final vote on this legislation for Monday or Tuesday next week. Guys.

BRIAN CHEUNG: Yahoo Finance's Jennifer Schonberger, thanks so much for the update.