CPR: “An idea from Hickenlooper helped Democrats reach deal with Sinema on climate and tax bill”
U.S. Senator John Hickenlooper is continuing to help move the Inflation Reduction Act across the finish line. As CNN first reported, Hickenlooper proposed a 1 percent excise tax on stock buybacks to replace tax provisions opposed by Senator Kyrsten Sinema. Sinema announced her support after Majority Leader Chuck Schumer incorporated the provision into the bill.
Hickenlooper discussed the breakthrough on CNN today with John King. In case you missed it:
King: “If you believe your colleagues, sir, you were instrumental in this. That Senator Sinema, one of your colleagues, wanted to remove one of the taxing provisions and you came up with an alternative… Is that true?”
Hickenlooper: “It became clear that Senator Sinema was going to create some need for adjustments. So I suggested that some sort of an excise tax on the stock buybacks, which had been in play before, but then had disappeared.It wasn’t one of those things that I’d heard Joe Manchin vociferously complain about or Krysten, so I just suggested that this is something…”
King: “These are landmark investments in the climate. These are health care changes that Democrats have long wanted to do. What do you believe is the most important, and how is it going to change the lives of people out there?”
Hickenlooper: “Well, I think it’s breathtaking. And this would be the largest investment in climate rescue in the history of the planet. No other country has ever had an initiative of this level, and what it’s going to do is drive change and accelerate our ability to come up to scale on wind, solar… President Biden made that, during his campaign, he was going to reduce emissions in the United States by 50% by 2030. Well, this gets us to a 40% reduction – that’s 80% of President Biden’s campaign promise. That’s remarkable.
“And then you look at we’ve been, for decades, working on trying to rein in prescription drug costs, and the inflation of prescription drugs. Now, Medicare is going to get to negotiate it. We’re going to put caps for senior citizens. We’re going to have the subsidies for people getting their insurance through the exchanges, it’s going to extend that and expand that savings for millions of American people. This is a pretty powerful package.”
Senate Democrats announced a final agreement on their ambitious health care, climate and tax bill, known as the Inflation Reduction Act, late Thursday.Reaching that agreement came with an assist from Colorado freshman Sen. John Hickenlooper.
Sinema had concerns about some of the elements intended to pay for the bill and reduce the deficit, including the end of the carried interest tax loophole that benefits hedge fund managers and the structure of a 15 percent minimum tax on corporations.
Closing the tax loophole would have brought in about $14 billion in additional funding. CPR News can confirm that Hickenlooper offered up an alternative idea that was accepted by both sides — a 1 percent excise tax. Hickenlooper brought the idea to Schumer, as first reported by CNN. The funding from the excise tax will exceed what closing the carried interest tax loophole would have generated.
The idea helped address some of Sinema’s concerns while keeping intact most elements of the deal worked out between Schumer and Manchin, and ensuring the package will reduce the deficit by $300 billion.
Hickenlooper said on Thursday, “This is one of the most important pieces of legislation I’ve seen in 50 years — that we can actually begin going after climate change in real time.”
This isn’t the only way Hickenlooper has helped push this bill, which has been over a year in the making, closer to the finish line. The Coloradan was also key in keeping talks going with Manchin.
In private discussions, Sinema had expressed concern over key parts of the Democrats’ plan to pay for their climate and health care package — imposing a 15% tax minimum tax on big corporations and narrowing the carried interest loophole, which allows investment managers to pay a lower tax rate on much of their compensation.
As a result, Democrats had been scrambling to find new revenue sources to meet the goal of saving $300 billion over a decade.
In an effort to break the logjam, Colorado Sen. John Hickenlooper, a freshman Democrat, proposed the excise tax on stock buybacks to Schumer as a way to make up for the revenue lost by Sinema’s requests,according to a Democratic aide.