Democratic lawmakers are growing increasingly exasperated with maverick Sen. Kyrsten Sinema (D-Ariz.) over her opposition to two key proposals to pay for a budget reconciliation package: raising corporate tax rates and lowering the cost of prescription drugs.
Democratic negotiators now say they will miss a target of completing a framework agreement on a massive budget reconciliation package in large part because Sinema is throwing up a roadblock to raising corporate tax rates.
Another significant problem is that Sinema is opposed to empowering Medicare to negotiate lower drug prices, according to senators briefed on the talks.
Senate Budget Committee Chairman Bernie Sanders (I-Vt.), one of the principal negotiators, on Thursday vented his frustration over Sinema’s opposition to raising corporate taxes and using the government’s huge negotiating power to push down drug prices.
Asked about Sinema’s opposition to raising corporate taxes — a central piece of President Biden’s tax reform agenda — Sanders told reporters: “I am very surprised that anybody would put themselves in that position.”
Democratic senators say Sinema’s opposition to raising corporate taxes represents a major obstacle to paying for Biden’s human infrastructure package.
The president initially called for raising the corporate tax rate to 28 percent, and House Democrats later proposed a lower target of 26.5 percent.
Manchin has instead suggested a top corporate tax rate of 25 percent, but Democratic senators now say Sinema might not even support that target.
Sinema voiced her concerns about raising corporate taxes in a lengthy phone conversation with House Ways and Means Committee Chairman Richard Neal (D-Mass.) on Thursday morning.
Neal said later that he made a strong case to Sinema that raising corporate tax rates would be the best way to raise corporate taxes efficiently. He said she listened politely but didn’t agree to anything.
“I pointed out that I thought the efficiency of the rate increases that we had proposed made a good deal of sense,” he said.
“I made the argument for efficiency in tax policy and the way you do that is simplicity of corporate increases,” he explained of the proposal to raise marginal corporate tax rates. “She listened to what I had to say.”
Neal also seemed to try to be a cooler on public tensions, saying Sinema was ready to deal and that the two are in “full agreement” on providing tax incentives for renewable energy production and an expanded tax credit and paid family and medical leave.
Sinema’s maverick stance against core Democratic policy priorities is causing waves in her own political circles.
Five members of the senator’s Veterans Advisory Council resigned this week over her opposition to Biden’s agenda and slammed her as “one of the principal obstacles to progress.”
In a letter released Thursday, the veterans said Sinema is “answering to big donors rather than your own people.”
“Your failure to stand by your people and see their urgent needs is alarming” they wrote in a letter released by Common Defense.
One Democratic senator, who has requested anonymity to discuss the internal negotiations, said Manchin has emerged as a more constructive player in the talks. The lawmaker said that Manchin on Tuesday offered during a caucus lunch to try to reach a deal with Sanders on a framework for the reconciliation package by the end of the week.
“I think that things have moved along a little bit with Manchin. Sinema has very idiosyncratic views on the revenue side of things,” the lawmaker said.
The lawmaker said Sinema’s opposition to raising corporate taxes will likely “prolong” the timeline for completing a framework deal.
Sinema has shared her reluctance to raise corporate taxes with Senate GOP colleagues, who are rooting for her to hold her ground.
Senate Minority Whip John Thune (R-S.D.) said several Republicans are “engaged in conversations with her.”
“I’m glad that some of the things that she’s passionate about in the case of this big tax and spending spree sync up with views of some of our members,” he said. “She understands and gets the impact these tax increases have on businesses.”
Democrats now are scrambling to find alternative proposals to raise money to offset the cost of the reconciliation bill, which moderates such as Manchin and Sen. Jon Tester (D-Mont.) say needs to be paid for.
“The Finance Committee has a lot of options for pay-fors. They need to know the top line. I think they have a lot of latitude to get to what will now be a lower top line,” said Sen. Tim Kaine (D-Va.), who said the total reconciliation package is likely to range between $1.7 trillion and $2.2 trillion.
“But there’s no agreement yet,” he said of the final price tag.
Sanders on Thursday also called out Sinema and House Democrats for opposing a proposal to lower prescription drug prices, which could save the federal government between $500 billion and $700 billion.
“It is beyond comprehension that there is any member of the United States Congress who is not prepared to vote to make sure that we lower prescription drug costs,” he told reporters Thursday afternoon as he was leaving the Capitol after the final vote of the week.
“I would say that Sen. Sinema, every Republican and every person in the House do what the American people want, and they want us to lower the outrageous costs of prescription drugs,” he added.
Sanders also told reporters that Senate negotiators will likely miss a target set by the Democratic caucus earlier on Tuesday to wrap up a framework agreement by the end of the week.
Sinema walked past reporters, declining to answer questions about her position on corporate taxes or other issues as she got into a car to leave the Capitol campus.
Manchin on Thursday agreed with Sanders that a deal on the broad parameters of the reconciliation package will not be reached by Friday, a deadline Senate Majority Leader Charles Schumer (D-N.Y.) proposed earlier in the week.
“There’s a lot of details. Until you see the text and the fine print, it’s pretty hard to make final decisions, until you actually see,” he said, adding that he wants to make sure “the text matches the intent.”