February 21, 2024

WASHINGTON — Sen. Kyrsten Sinema, the centrist Arizona Democrat, has spent the past 12 months making big deals with Republicans on issues like infrastructure and gun reform.

Now, House and Senate Democrats desperate for a historic victory on climate, health care and taxes before the midterm elections hope she is willing to make a deal with her own party.

In recent days, the outlines of a possible agreement with Sinema have begun to emerge. She has long opposed one provision of the deal Manchin struck 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 considering changes to the 15 percent minimum corporate tax, three familiar sources told NBC News. Manufacturers — large and small — say the proposed change could hurt their businesses, as they rely on the existing structure of depreciable taxable assets to offset the cost of equipment and factory space. 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 drew no red lines, a source said on the call. He told the chamber he would try to “improve” the bill, according to the source, who said Cinema gave the impression he would not oppose the legislation if it remained unchanged.

In addition, Sinema is pushing for $5 billion in drought prevention, two sources said, an issue of great importance to Arizona.

No Senate Democrat pretends to know what Cinema is thinking, or tries to speak for it. Many said they have no comment for her on the bill, giving her what they hope will be enough room to get to a yes vote.

“I don’t want to talk about Sen. Sinema,” said Sen. Bernie Sanders, I-Vt., who caucuses with Democrats.

“I don’t do Sinema stuff,” added Sen. Brian Schatz, R-Hawaii, though he added that Democrats are on a roll and “kicking their ass” in passing major bills this summer.

Having the party’s other enigmatic moderate, Sen. Joe Manchin, DW.Va., sign the $739 billion reconciliation package was a huge victory for Democrats, who earlier this summer walked away from a sweeping spending deal. But since Democrats need all 50 of their senators to participate, now is the time for Sinema to take a stand on the legislation.

Senators on Saturday afternoon will hold their first procedural vote on the Lower Inflation Act, with amendments expected later in the weekend. It is unclear whether any changes proposed by Sinema will be incorporated in advance or during the amendment process. Schumer’s policy director was seen Thursday afternoon shuttling between his office and Sinema’s stash in the Capitol basement, suggesting a deal may be in the works.

But any revisions Sinema seeks could strain the fragile Manchin-Schumer deal, which nearly all Democrats are willing to support. Sen. Ben Ray Lujan of neighboring New Mexico, along with other western Democrats, said they would like to see some of the drought money Sinema wants go to their states as well.

Other Democrats are fighting to keep the tax provision dealing with carried interest, though they have not said they would be negotiable if that language is removed. The arrangement will bring in $14 billion in revenue — a drop in the bucket compared to the broader package.

“I hope he will consider supporting the Democratic position. The 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 — the richest millionaires and billionaires — who are capitalizing on this gap. They don’t risk a penny and walk away with special tax treatment. This has to end.”

Sinema had no comment on the package on Thursday. Her spokeswoman said the senator is waiting for the Senate to rule on whether certain elements of the package should be removed before deciding whether to support advancing the bill to a vote on Saturday.

But Sinema was actively lobbying colleagues on Thursday. She spoke with Sens. Lisa Murkowski of Alaska, Todd Young of Indiana, Rob Portman of Ohio and other Republicans on the Senate floor as she won GOP support for a confirmation vote on one of her constituents in Arizona, Roopali Desai, as a federal appellant. judge for the Ninth Circuit.

At one point, Sinema burst out of the Capitol doors, yelling, “Has anyone seen Mitt?” He tracked down 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 the entire lane has been on display all year. Earlier this summer, she and Sen. Chris Murphy, D-Conn., brokered a major deal on gun legislation with Sens. John Cornyn, R-Texas, and Thom Tillis, RN.C., in the wake of mass shootings in a Texas elementary school and a New York grocery store. And in August 2021, she and Portman led a bipartisan group of senators who reached agreement on a $550 billion infrastructure package that funded the nation’s roads, public transit, water and broadband. Both bills became law.

Sen. Jerry Moran, R-Kan., who sat on Sinema’s infrastructure task force and has co-sponsored several bills with her, said she is now in the driver’s seat for the $739 billion reconciliation package.

“I always found her to be honest, direct and looking for a solution. She’s a pleasure to work with,” Moran said in an interview Thursday. “Obviously they need her to be successful. He is able and has the capabilities and the fortitude to be a successful negotiator.”

Democrats who have worked and served with Cinema for years remain optimistic.

“I’m friends with Kyrsten Sinema. I respect Kyrsten Sinema. I think he’s a good person,” Lujan, who also served with Cinema in the House, told NBC News. “He will push, as the senator has proven. In the end, what I hope is that we could all come together and not have amendments that are inconvenient for anyone in the caucus and be able to get it done. That seems to be the path we’re on.”

Back home in Arizona, Sinema is facing heat from the left for supporting the spending package and will likely have to fend off a primary challenge when her seat goes to voters again in 2024.

“This is a behavior we’ve had from Senator Sinema over the past two years – a lack of connection or conversation with constituents, her actions prioritizing special interests and her campaign funders over the people of Arizona,” Luis said. Ávila, a community organizer in Phoenix working with Primary Sinema PAC.

Her relationship with state Democrats has soured since she was criticized by the Senate last year over the $15 minimum wage. It got worse after he rejected a change to the bottle rule that would have helped pass a major voting rights bill.

Some Democrats, including a former Sinema aide who spoke to NBC News on the condition of anonymity, believe that the destruction of the new spending bill will destroy her re-election hopes. Emily Kirkland, a progressive strategist based in Tempe, Ariz., agreed.

“I don’t think she can get back on good terms with Democrats and independents unless she’s positive about this deal,” Kirkland said. It is “extremely disappointing and frustrating” 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, DC and Sahil Kapur from Phoenix.

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