Inflation Reduction Act Agreement Faces Early Hurdle In Arizona Sen. Sinema

The Inflation Reduction Act agreed to on the evening of 27 July by Senate majority leader Chuck Schumer (D-NY) and centrist Senator Joe Manchin (D-WV) already faces a potentially significant obstacle to its passage in the form of another moderate Democrat, Senator Kyrsten Sinema.

• The Inflation Reduction Act, a slimmed-down version of the reconciliation bill that came out of the White House's Build Back Better package, includes revenue-raising measures such as imposing a corporate minimum tax of 15%, prescription drug pricing reform that will allow Medicare to negotiate drug prices, beefing up IRS enforcement, and closing tax loopholes. The expenditures side of the ledger includes and unprecedented USD369bn in climate change spending.
• The act will have to pass through the Senate via reconciliation - a complex process that will involve getting the support of all 50 Democratic Senators. Previously, Sinema has publicly told business leaders in Arizona that she would not agree to the 15% minimum corporate tax rate, thereby setting up a showdown with Schumer and her erstwhile ally Manchin. Without compromise from one or both sides the deal could be scuppered in its early stages.