Sen. Joe Manchin Says He Will Keep Standing in Favor of Reconciliation Deal Despite Potential Opposition from Kyrsten Sinema

Despite likely resistance from fellow centrist Sen. Kyrsten Sinema, Sen. Joe Manchin (D-WVa.) stated Thursday that he intends to preserve a plan to fix the so-called carried interest tax loophole in the tax and climate deal he achieved this week (D-Ariz.).

Closing the tax loophole has long been an objective of Democratic tax reformers, but it was removed from last year's House tax package after Sinema stated her opposition to cutting the tax exemption.

Lawmakers Wait For Sen. Kyrsten Sinema's Say

This dynamic has sparked conjecture over whether the Arizona senator would vote against Manchin and Senate Majority Leader Charles Schumer's (D-NY) Inflation Reduction Act, which was released on Wednesday.

So far, Sinema's administration has declined to comment on the measure. According to a senator in attendance, she did not attend a Senate Democratic Caucus meeting on Thursday to discuss the arrangement. The senator stated that Sinema frequently misses caucus sessions and that her absence from the meeting on Thursday was not unusual.

However, Manchin told reporters on Thursday that he will insist on maintaining the carried interest provision in the measure, noting that it is unjust for asset managers to pay only a 20% capital gains tax rate on revenue earned through managed investments earnings.

For years, some Democrats have sought to abolish the carried interest loophole, claiming it permitted affluent money managers to pay lower tax rates than working-class Americans, according to The Hill.

The agreement revealed Wednesday by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.) startled most caucus members, many of whom learned about it through Manchin's press release. Senate Democrats are optimistic that they will eventually have all 50 members, including Sinema.

Still, one source who spoke with Sinema characterized her as frustrated at not being included, while another claimed she was completely startled, and Republicans believe she is their last hope to halt the agreement.

Democrats had a closed-door caucus meeting Thursday morning to review the unexpected Wednesday agreement. During the conference, Schumer praised the accord and pushed his caucus to go all out to get the package enacted before Congress' regular summer holiday, as Politico.

Manchin Claims He "Never Gave Up" on Reconciliation Deal

Manchin is defending his 11th-hour pact with Senate Minority Leader Charles Schumer, despite Republican outrage that the move caught them off guard. He startled members from both parties when he revealed the agreement late Wednesday, just hours after a handful of Republicans crossed the aisle to vote for legislation to boost the US semiconductor sector by billions of dollars.

On Thursday, Manchin justified his change of heart, which came after many Democrats determined he had been bargaining in poor faith when he indicated weeks ago that he couldn't back the climate aspects of a slimmed-down Build Back Better plan.

House Republican leaders are now threatening to whip members to vote against the CHIPS plan, even though some of them previously backed it, forcing House Republicans to rely more on Democratic votes.

Manchin did not appear to attempt to be tied down on when the agreement with Schumer was eventually done, whether it was Tuesday night, before the final vote on the CHIPS measure, or Wednesday, when he disclosed the outlines hours before the final language.

Manchin also applauded the tax measures, which he said were not tax hikes since they compelled firms to pay a minimum corporate tax that was lower than the maximum corporate rates imposed by law, in response to discoveries that some extremely large corporations pay no effective taxes, Daily Mail reported.