Apr 6, 2022 - Politics & Policy

Scoop: Sinema throws cold water on Build Back Better revival

Sen. Kyrsten Sinema is seen speaking during a Senate hearing.
Sen. Kyrsten Sinema. Photo: Al Drago-Pool/Getty Images

Last year, Sen. Joe Manchin (D-W.Va.) publicly sounded the death knell for President Biden's Build Back Better agenda. Sen. Kyrsten Sinema (D-Ariz.), his fellow holdout, is privately concurring, Axios has learned.

Why it matters: In closed-door conversations, Sinema has told donors a path to revival is unlikely. That's dampened expectations Congress will act on a slimmed-down bill before Memorial Day. It also means any revived BBB legislation faces an arduous route back to the center of the Senate agenda.

  • No one's reached out to Sinema about the contours of the slimmed-down deal Manchin has discussed, people familiar with the matter tell Axios.
  • Instead, Sinema's telling donors most of her focus is on the $10 billion COVID-19 relief bill, the so-called China competition legislation and modifications to the Electoral Reform Act.
  • A Sinema spokesperson declined comment to Axios.

The big picture: With an expected vote on Judge Ketanji Brown Jackson to serve as a Supreme Court justice this week, the Senate still wants to act on coronavirus relief before leaving town.

  • If not, after a two-week recess, senators expect to finalize the new COVID-19 spending and then turn to settling differences with the House over the China bill.
  • As a practical matter, those issues will suck up much of the Senate's bandwidth, leaving little room for Build Back Better talks.

Driving the news: Manchin is telling climate activists — as well as reporters — he’s open to raising taxes on corporations and wealthy Americans to pay for roughly $550 billion in new climate-related spending.

  • He also wants to bolster America’s energy independence by approving more permits for offshore drilling and domestic pipelines.
  • Some progressives are skeptical about Manchin’s seriousness and intentions. Others say they're ready to accept his demands on natural gas in return for the $550 billion to lower carbon emissions, Politico reported.

Go deeper: Last fall, Sinema forced the White House to abandon Biden's plans to increase the corporate tax rate to 26.5% from 21% and raise the top individual rate for the wealthiest Americans from 37% to 39.5%.

  • But she did end up agreeing to raise the global minimum and domestic tax rate for corporations to 15%, which would raise about $600 billion over 10 years.
  • In all, she agreed to measures that would increase revenues by about $2 trillion — more than enough to offset the $1 trillion in new revenue Manchin has floated to pay for climate provisions and deficit reduction.

Between the lines: After Biden pivoted toward deficit reduction in the State of the Union address, indicating he might be willing to work with Manchin on a smaller package, Sinema said her support for the White House's framework on Build Back Better was unchanged.

  • “Any new, narrow proposal — including deficit reduction — already has enough tax reform options to pay for it,” a Sinema spokesperson said in early March.
  • “These reforms are supported by the White House, target tax avoidance and ensure corporations pay taxes, while not increasing costs on small businesses or everyday Americans already hurting from inflation.”

The bottom line: The White House has always needed to solve issues not just for Manchin but also for Sinema to get a reconciliation bill passed in a 50-50 Senate.

  • If and when she gets engaged, the talks will take on new urgency.
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