With Climate Deal in Sight, Democrats Turn Hopes on Sinema

WASHINGTON — As Senator Kyrsten Sinema, Democrat of Arizona, took her turn presiding over the Senate floor on Tuesday, Senator Joe Manchin III of West Virginia, a fellow Democrat, got down on one knee beside her at the dais, leaning in intently to speak to her in hushed tones.

Ms. Sinema, an inscrutable lawmaker who has shown a willingness to buck her party, had replaced Mr. Manchin as the most prominent and speculated-upon holdout on his party’s major climate, energy and tax package, and the West Virginian was there to lobby her to support it.

With journalists watching from the gallery above, leaning in to try to hear the conversation, Ms. Sinema waved in apparent acknowledgment.

“She’ll make a decision based on the facts,” Mr. Manchin told reporters later, calling it “a good talk.”

While Mr. Manchin has embraced the public scrutiny and attention that comes with being a swing vote in the evenly divided Senate, Ms. Sinema has remained a tight-lipped enigma. Passage of Democrats’ major domestic policy initiative, negotiated by Mr. Manchin and Senator Chuck Schumer of New York, the majority leader, now hinges on whether she is willing to support it.

So far, Ms. Sinema won’t say.

It has put Democrats in a perilous position as they rush to move the package forward as early as this week and toil to unite all 50 members of their caucus behind it. Republicans are expected to unanimously oppose the plan, which includes hundreds of billions of dollars in energy and climate proposals, tax increases, extended health care subsidies and a plan aimed at lowering prescription drug prices, meaning Democrats cannot spare a single vote if all Republicans are present.

Party leaders will also have to maneuver the bill through a series of rapid-fire amendments that could pass if any Democrat joins Republicans in support. With Mr. Manchin enthusiastically embarking on a media tour to celebrate the measure, fears of failure were now being fueled by Ms. Sinema’s characteristic silence.

A spokeswoman for Ms. Sinema has said that the senator was reviewing the legislation and waiting for guidance from top Senate rules officials, who were analyzing whether it meets the strict rules that apply under the budget reconciliation process. Democrats were using the reconciliation process to shield the legislation from a filibuster and speed it through Congress.

Top Democrats were quietly weighing what potential changes to the bill, particularly to its tax provisions, might be needed to win Ms. Sinema’s support.

While she voted for the initial $3.5 trillion budget blueprint that allowed Democrats to begin work on the legislation, Ms. Sinema has not offered explicit support for many pieces of the current package, most notably much of the tax increases included to pay for it. Doubt about Ms. Sinema’s support has centered on her past opposition to a proposal aimed at limiting the carried interest preferential tax treatment for income earned by venture capitalists and private equity firms. A similar proposal was among the tax changes Mr. Manchin and Mr. Schumer included in their deal.

What’s in the Democrats’ Climate and Tax Bill

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A new proposal. The $369 billion climate and tax package that Senate Democrats proposed in July could have far-reaching effects on the environment and the economy. Here are some of the key provisions:

Auto industry. Currently, taxpayers can get up to $7,500 in tax credits for purchasing an electric vehicle, but there is a cap on how many cars from each manufacturer are eligible. The new bill would eliminate this cap and extend the tax credit until 2032; used cars would also qualify for a credit of up to $4,000.

Energy industry. The bill would provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances and tax credits for companies that build new sources of emissions-free electricity, such as wind turbines and solar panels. It would also set aside $60 billion to encourage clean energy manufacturing in the United States. It would also require businesses to pay a financial penalty per metric ton for methane emissions that exceed federal limits starting in 2024.

Low-income communities. The bill would invest over $60 billion to support low-income communities and communities of color that are disproportionately burdened by effects of climate change. This includes grants for zero-emissions technology and vehicles, as well as money to mitigate the negative effects of highways, bus depots and other transportation facilities.

Carried interest loophole. The deal would narrow this special tax preference, which allows wealthy hedge fund managers and private equity executives to pay lower tax rates than entry-level employees. The bill would introduce new requirements to qualify for the exemption, with the goal of reducing taxpayers’ ability to game the system and pay a lower tax rate.

Fossil fuels industry. The bill would require the federal government to auction off more public lands and waters for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. These provisions are among those that were added to gain the support of Senator Joe Manchin III, Democrat of West Virginia.

West Virginia. The bill would also bring big benefits to Mr. Manchin’s state, the nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives for companies to build wind and solar farms in areas where coal mines or coal plants have recently closed.

Mr. Manchin and other Democrats have said the provision would ensure fairness in the nation’s tax code. But Ms. Sinema, who resisted many of the tax rate increases her colleagues had pushed for, has been cool to it.

Ms. Sinema, like most of her colleagues, was blindsided by news of the deal between Mr. Manchin and Mr. Schumer and its details. Mr. Manchin has said that he intentionally did not confide in or consult other Democrats during final negotiations to salvage the climate and tax proposals because, he told reporters on Monday, “I wasn’t ever sure that we would get to a finale, to get a completed bill.”

Senator Joe Manchin III has said that he intentionally did not confide in or consult other Democrats during recent negotiations to salvage the climate and tax proposals.Credit…Haiyun Jiang/The New York Times

Speaking to a West Virginia radio station on Tuesday, Mr. Manchin noted that Ms. Sinema had played an outsized role in shaping the prescription drug proposal and scaling back Democratic ambitions to overhaul the tax code as part of the plan.

“This is everything Kyrsten agreed to in December,” he told Hoppy Kercheval, a local radio host. He added, “If there’s something in here she doesn’t like that she liked before, just tell me.”

Democratic senators and aides have also noted the proposal to change the carried interest tax break for wealthy executives is more modest than what the majority of the party had pushed for, narrowing it rather than eliminating it altogether.

It was unclear whether Democrats would be willing to strike the proposal altogether to win over Ms. Sinema. Estimates suggest it would raise about $14 billion, a small portion of the $740 billion plan.

“It may strike some people in Washington as old-fashioned, but in my experience, Senator Sinema has always believed you must be thoughtful and cautious when it comes to changing tax policy,” said John LaBombard, a senior vice president at the public affairs firm ROKK Solutions, who left Ms. Sinema’s office in February after more than three years working there.

“My guess is that any tax policy that earns her support is one that she will be confident in that it will not negatively impact our economic competitiveness or carry any unintended consequences,” he added.

Party leaders expressed guarded optimism that they could pass the package with its key elements intact.

“I’m very hopeful we’re all going to be united and pass this bill,” said Mr. Schumer, who said he and his staff were in touch with Ms. Sinema about the measure.

Others avoided even commenting on whether they had spoken to Ms. Sinema.

“Why would I be sharing that with any of you guys at this point?” Senator Mark Warner of Virginia asked, throwing his arms up in the air with a grin as he climbed onto the Senate subway.

Ms. Sinema, 46, has toggled between vexing her party with her refusal to embrace some of its top priorities and playing a key role in negotiating some of its hardest-won bipartisan compromises.

She has drawn ire from her colleagues and some voters for opposing their push to undo the 60-vote filibuster threshold that Republicans have used to block much of the Democratic agenda. Ms. Sinema also joined Mr. Manchin in helping to hammer out the bipartisan $1 trillion infrastructure law, and played a leading role in forging a compromise on gun safety efforts that yielded the first significant federal law on that issue in decades.

She has previously expressed support for investing in climate change, leaving many Democrats hopeful that she will choose to back the final deal. On the Senate floor on Tuesday, lawmakers in both parties made a point of chatting her up in between votes.

Ms. Sinema, who faces re-election in 2024, is also facing a likely primary opponent as part of the backlash for her resistance to ending the filibuster. The Primary Sinema Project, a political group aimed at ousting her, warned that Ms. Sinema “better not mess this up” after the deal was announced, while Representative Ruben Gallego, a potential challenger and prominent critic, charged she was holding up the measure “to try to protect ultra rich hedge fund managers so they can pay a lower tax.”

Her Republican allies and business groups see Ms. Sinema as a last opportunity to derail a measure they have condemned as harmful to the nation’s economy. Americans For Prosperity, a conservative nonprofit advocacy group with ties to the Tea Party and the Koch Brothers, circulated an online ad against the legislation that pleaded “Come on Kyrsten … Say NO for Arizona.”

But her colleagues conceded that Ms. Sinema has seldom seemed swayed by the heat of public campaigns.

“She’s analyzing it, keeps her own counsel, I think as most of you know, and usually comes to her own decisions, pretty independent of any pressure that she might get from either side,” Senator John Thune of South Dakota, the No. 2 Republican, told reporters on Monday. “So, you know, I think she’s going through that process right now.”

Catie Edmondson contributed reporting.

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