Senate

Democratic anxiety grows over Sinema’s silence

Senate Democrats are growing more anxious over maverick Sen. Kyrsten Sinema’s (D-Ariz.) five-day silence on a sweeping proposal to reform the tax code, tackle climate change and reduce the federal deficit.

Democratic lawmakers are privately worried that Sinema’s not happy about being left out of the negotiations between Senate Majority Leader Charles Schumer (D-N.Y.) and centrist Sen. Joe Manchin (D-W.Va.), which resulted in a surprise announcement last week of a major deal.   

News of the deal, which surfaced hours after the Senate passed a $280 billion microchips and science bill, outraged Republican senators, several of whom have a close relationship with Sinema.   

Sinema’s office said last week that she would carefully review the legislation before stating a position on it, leaving her Democratic colleagues anxiously waiting.   

Manchin acknowledged to reporters Monday that Sinema was left out of last week’s quiet negotiations with Schumer, even though she had played a key role in talks with the White House last year.     

“I haven’t had any conversations with anybody during the process because I wasn’t ever sure that we would get to a finale,” he told reporters Monday.   

“I never thought that could happen. I wasn’t sure,” he said of a potential tax and climate deal.   

Manchin said he planned to speak to Sinema about the deal at Monday evening’s vote on a judicial nominee.   

He later told reporters that he had left a message for her but had “not yet” heard back. 

“I’ve called, left a message for her, I might see her on the floor,” he said.

But Sinema only ducked into the chamber for a few seconds to cast her vote and then abruptly left, leaving colleagues no time to lobby her. 

She left the Capitol without speaking to reporters. 

One possible sticking point in the package is a proposal to close the carried interest loophole, which allows asset managers to pay a 20 percent capital gains tax on income earned from profitable investments.   

Language to close the carried interest loophole was dropped from a House bill last year after Sinema expressed opposition.   

John LaBombard, a former senior aide to Sinema, said he was surprised that Schumer agreed to the carried interest provision, which was a top priority of Manchin’s, without checking first with Sinema.   

“The question that I have and what has confused me about Sen. Schumer’s strategy is not necessarily whether and when to loop her [in]. What perplexes me more is the idea that he would knowingly and — in my mind — somewhat randomly add in a tax policy provision that was not in the House bill, was not in the White House framework, and that he knew she had substantive concerns and questions about,” he said.

Instead, Schumer “let her and the rest of the caucus learn about the agreement via press release,” he added.   

“That combination is what perplexes me and leads me to question whether this is a strategy that’s going to maximize chances of success,” he said. “I think it may have been a little different if they had largely struck a deal that largely reflected what everyone knew Sen. Sinema supported at the end of last year.”  

Manchin said last week that he was “adamant” about closing the carried interest loophole in the final deal, a position he again defended Monday.   

He demanded that critics “explain to me” how it’s fair to let “the wealthiest people in America” pay a lower tax rate on income accrued from profitable investments than most middle-class Americans pay on their regular incomes.   

Manchin emphasized that he remains personally friendly with Sinema and that she had a huge role in crafting the section of the bill empowering Medicare to negotiate prescription drug prices.   

“Kyrsten is a friend of mine. We work well together on so many pieces of legislation,” he said. “She has a lot in this bill. She’s the one that negotiated basically — no one changed it — the Medicare negotiations.”  

Sinema also defeated proposals to raise the corporate tax rate from 21 percent to 25 percent and to raise the marginal income tax rate for individuals and families in the top tax bracket.   

Democratic strategists warn that Sinema would face a strong backlash from Democratic activists if she blocked the bill over the carried interest language.   

“Supporting this bill should be as easy as Jordan dunking on my middle school Jewish basketball team,” said Democratic strategist Eddie Vale said. “Reducing inflation, lowering drug prices [and] fighting climate change are core priorities.” 

Vale said the carried interest loophole is “tremendously unpopular.”  

“She already has issues with key base constituencies, but, opposing this also would get her in hot water with labor and business, too,” Vale added.  

Basil Smikle, a Democratic strategist and the director of the public policy program at Hunter College, said Sinema can help herself politically by backing the package worked out by Manchin and Schumer. 

He said any tensions she has with the Democratic base over opposing a $15-an-hour national minimum wage and getting rid of the Senate filibuster would be mitigated by helping President Biden pass his biggest domestic legislative priority.

“Democrats may feel compelled to protect her for coming through for the administration, should she support the bill,” Smikle said. “All previous frustrations will be excused in the short term.”   

Democratic strategist Christy Setzer said Sinema “seems comfortable with the negative spotlight on her and Manchin, but this is the first time all eyes have been on her alone.”  

“Does she really want to be the only skunk at the garden party, and if so, to what end?” Setzer said. “Manchin’s leverage comes from the fact that he’s way above replacement value in West Virginia — not true of Sinema and Arizona.”

While former President Trump easily defeated Biden in the 2020 election in West Virginia, Biden defeated Trump in Arizona. Any Democrat other than Manchin would have little chance of winning a Senate seat in West Virginia and Manchin doesn’t face any serious threat from a progressive challenger. In Arizona, many think Sinema could be vulnerable to a more liberal primary opponent. 

LaBombard said Sinema will want to carefully review the economic analyses of the bill before deciding how to vote on the legislation.  

“Sen. Sinema has always been — in the time that I’ve known her — someone who’s going to do her due diligence,” he said. “I know she has expressed interest publicly in what the parliamentarian has to say, in getting acquainted with the details of some of the economic analyses.”

“I don’t think she’s going to be in any rush to meet any timetable other than what’s required for her to make a decision about what she thinks is the best policy,” he said.   

Republicans say they don’t expect Sinema to agree to vote for the package unless Schumer makes other concessions.    

“She has a spine of steel. She’s not going to be easily twisted,” Senate Republican Conference Chairman John Barrasso (Wyo.) told Fox News’s “Sunday Morning Futures.”   

Sen. John Thune (R-S.D.), who has a close relationship with Sinema, said he’s talked to her about the reconciliation package and warned it would slow the economy by raising taxes on corporations.

“I’ve had conversations with her on not only this but lots of other subjects. She’ll come to her own conclusion,” he said. “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.”  

Mychael Schnell contributed.

Tags Arizona Carried interest tax loophole Charles Schumer Charles Schumer Climate change Inflation Joe Manchin Joe Manchin Kyrsten Sinema Kyrsten Sinema West Virginia
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