WASHINGTON — Sen. Kyrsten Sinema, the centrist Arizona Democrat, spent the past 12 months cutting big deals with Republicans on issues like infrastructure and gun reform.
In recent days, the contours of a potential agreement with Sinema have started to emerge. She has long been opposed to a provision in the deal Manchin cut with Majority Leader Chuck Schumer: closing the so-called carried interest tax loophole that helps wealthy private equity and hedge fund managers pay lower taxes.
Sinema is also eyeing changes to the 15% minimum corporate tax, three sources familiar told NBC News. Manufacturers — large and small — say the proposed change could harm their businesses as they rely on the existing structure of depreciating taxable assets to offset costs of equipment and factory space. The corporate tax was the bulk of a 20-minute Zoom call Tuesday with Sinema and the Arizona Chamber of Commerce.
The senator made no promises and did not draw any red lines, a source on the call said. She told the chamber she would try to “improve” the bill, according to the source, who said Sinema gave the impression she would not oppose the legislation if it were unchanged.
In addition, Sinema is pushing for $5 billion for drought prevention, two sources said, an issue of great importance to Arizona.
No Senate Democrat is pretending to know what Sinema is thinking, nor are they trying to speak for her. Many said they don’t have any comment about her regarding the bill, giving her what they hope will be enough space to get to yes.
“I don’t want to be talking about Sen. Sinema,” said Sen. Bernie Sanders, I-Vt., who caucuses with Democrats.
“I don’t do Sinema stuff,” added Sen. Brian Schatz, D-Hawaii, though he added that Democrats are on a roll and “kicking butt” passing important bills this summer.
Getting the party’s other enigmatic moderate, Sen. Joe Manchin, D-W.Va., to sign off on the $739 billion reconciliation package was a huge victory for Democrats, who earlier this summer had all but given up on a sweeping spending deal. But given that Democrats need all 50 of their senators to get on board, it’s now time for Sinema to take a position on the legislation.
Senators on Saturday afternoon will hold their first procedural vote on the Inflation Reduction Act, with amendment votes expected later in the weekend. It’s unclear if any changes proposed by Sinema would be incorporated beforehand or during the amendment process. Schumer’s policy director was spotted Thursday afternoon shuttling between his office and Sinema’s hideaway office in the basement of the Capitol, indicating a deal might be in the works.
But any revisions sought by Sinema could strain the fragile Manchin-Schumer deal, which nearly all Democrats are prepared to support. Sen. Ben Ray Lujan from neighboring New Mexico, along with other western Democrats, said they’d like to see some of the drought money Sinema wants for their states as well.
Other Democrats are fighting to preserve the tax provision addressing carried interest, though they haven’t said it would be a dealbreaker if that language gets stripped out. The provision would raise $14 billion in revenue — a drop in the bucket compared to the broader package.
“I hope she’ll consider supporting the Democratic position. Carried interest is a travesty,” said Majority Whip Dick Durbin, D-Ill., the No. 2 Democrat in the Senate.
“There are some of the richest people in America — wealthiest millionaires and billionaires — who are capitalizing on this loophole. They don’t risk a single penny and they walk away with special tax treatment. That ought to come to an end.”
Sinema had no comment about the package on Thursday; her spokeswoman said the senator is waiting for the Senate parliamentarian to rule on whether some elements of the package need to be removed before deciding whether to support advancing the bill in Saturday’s vote.
But Sinema was active lobbying colleagues on Thursday. She chatted up Sens. Lisa Murkowski of Alaska, Todd Young of Indiana, Rob Portman of Ohio and other Republicans on the Senate floor as she whipped GOP support for a confirmation vote on one of her Arizona constituents, Roopali Desai, to be a federal appellate court judge for the Ninth Circuit.
At one point, Sinema bolted out of the Capitol doors, yelling, “Has anyone seen Mitt?” She located Sen. Mitt Romney, and escorted him back to the Senate floor, where the Utah Republican voted yes on Desai’s nomination. Desai was confirmed 67-29, with 19 Republicans voting yes.
Sinema’s ability to work across the aisle has been on display all year. Earlier this summer, she and Sen. Chris Murphy, D-Conn., struck a major deal on gun legislation with Sen. John Cornyn, R-Texas, and Thom Tillis, R-N.C., after mass shootings at a Texas elementary school and New York grocery store. And in August 2021, she and Portman led a bipartisan group of senators that reached a deal on a $550 billion infrastructure package funding the nation’s roads, public transit, water and broadband. Both bills became law.
Sen. Jerry Moran, R-Kan., who was part of Sinema’s infrastructure working group and has co-sponsored several bills with her, said she’s now in the driver’s seat on the $739 billion reconciliation package.
“I have always found her to be honest, straight-forward and looking for a solution. She’s enjoyable to work with,” Moran said in an interview Thursday. “They obviously need her to be successful. She is in a position and has the capabilities and the fortitude to be a successful negotiator.”
Democrats who have worked and served with Sinema for years remain optimistic.
“I’m friends with Kyrsten Sinema. I respect Kyrsten Sinema. I think she’s a good person,” Lujan, who also served with Sinema in the House, told NBC News. “She’s going to push, as the senator has proven that she does. In the end, what I hope is that we could all come together and not have amendments that are troublesome to anyone in the caucus and we’re able to get this finalized. It appears that’s the road we’re on.”
Back home in Arizona, Sinema is facing heat from the left to back the spending package and likely will have to fend off a primary challenge when her seat comes before voters again in 2024.
“This is a behavior we’ve had from Senator Sinema in the last couple of years — a lack of connection or conversation with constituents, her actions prioritizing special interests and people bankrolling her campaign over the people of Arizona,” said Luis Ávila, a community organizer in Phoenix who works with Primary Sinema PAC.
Her relationship with state Democrats has deteriorated since she gave a flippant thumbs down on the Senate floor last year on a $15 minimum wage bill. It worsened further after she rejected a filibuster rule change that would have helped pass a major voting rights bill.
Some Democrats, including a former Sinema aide who spoke to NBC News on condition of anonymity, believe that scuttling the new spending bill would doom her hopes of re-election. Emily Kirkland, a progressive strategist based in Tempe, Ariz., agreed.
“I don’t think that she can come back into good standing with Democrats and independents unless she’s a yes on this deal,” said Kirkland. It’s “extremely frustrating and disappointing” for Sinema to threaten the bill in order to protect “a tax break for hedge fund managers.”
Scott Wong and Julie Tsirkin reported from Washington, D.C., and Sahil Kapur reported from Phoenix.