In a shameless show of submission to the corporate financial oligarchy, Biden’s White House and Senate Democratic leaders agreed on Thursday to scrap provisions of their climate and tax bill that would modestly raise corporate taxes. multi-billionaires and hedge fund billionaires.
Senate Majority Leader Chuck Schumer (D-NY), otherwise known as the “Senator from Wall Street,” announced a deal with Arizona Democrat Kyrsten Sinema to drop a provision ending the infamous “carried interest” loophole, which allows hedge funds and private equity managers to pay federal taxes on their income at the capital gains rate, which is nearly 50% lower than the normal rate for very high earners .
The provision would have affected only a relative handful of billionaires, generating about $14 billion in tax revenue over 10 years.
Democratic leaders further agreed to reduce the scope of their proposed 15% minimum tax on corporations worth more than $1 billion to virtually exclude large manufacturing companies. And this despite the fact that just hours before Schumer and Kyrsten announced their agreement, the Senate Finance Committee released data from the Joint Committee on Taxation showing that up to 125 billion-dollar companies on average an effective tax rate of just 1.1% in 2019.
Sinema had been the latest Democrat to resist the so-called Cut Inflation Act, announced last week after Schumer and West Virginia Sen. Joe Manchin agreed to a significantly scaled-down version of the climate action package, tax and social benefits of President Joe Biden. .
Biden and Democrats are seeking approval of the bill by the equally divided Senate through the budget reconciliation process, which requires a simple majority vote and blocks a filibuster from Republicans, who will vote unanimously against the bill. of law. This means that every Senate Democrat must vote for the measure, in which case Vice President Kamala Harris, as Senate President, will vote in the event of a tie.
The Biden administration – increasingly discredited over its policies of massive COVID-19 infection, its proxy war against Russia in Ukraine, its refusal to hold Trump and its accomplices to account of state and its efforts to impoverish working people through record inflation – faces collapsing polls and the prospect of a Republican takeover of one or both houses of Congress in the midterm elections of november.
He is desperate to score a legislative “victory” and cynically presents his deal with Manchin as a breakthrough for the environment, for lower prescription drug prices and for tax fairness. It’s none of that.
Last year, Manchin, a multimillion-dollar coal company, stalled various iterations of Biden’s domestic policy agenda — which swelled from around $6 trillion to $3.5 trillion and eventually $1.75 trillion — due to its restrictions on the fossil fuel industry and Manchin’s right-wing opposition to any extension of social protection measures.
The new bill, fraudulently touted as an anti-climate change measure, not only fails to curb polluting coal, oil and gas companies, but it dramatically expands the federal government’s lease of onshore and offshore territory to oil and gas producers, extending offshore drilling from the Gulf of Mexico to the waters off Alaska.
In an article published July 29 titled “Climate Bill is a Boon for Fossil-Fuel Sector,” the the wall street journal quoted Shell CEO Ben van Beurden welcoming the bill, saying: “The world needs new oil and gas to come into production.
Part of the deal between Manchin and Schumer is an agreement, endorsed by Biden and House Speaker Nancy Pelosi, to vote on a separate bill in the fall that would allow developers to more easily pass environmental objections during construction of pipelines, natural gas export facilities and other energy infrastructure. Manchin has a vested interest in such reduced environmental oversight as he promotes the Mountain Valley gas pipeline between West Virginia and Virginia in the face of continued protests from environmental groups and small landowners in the area.
Brett Hartl, director of government affairs at the Center for Biological Diversity, called the bill a “climate suicide pact.”
Manchin is an accomplice of Big Oil and Gas. He is the biggest recipient in the Senate of campaign money from the fossil fuel industry. According to tracker OpenSecrets, he raised $886,917 from the oil and gas industry between 2017 and 2022. Between July and October 2021, when Manchin was the leading Democratic opponent of Biden’s Build Back Better program, he raised $400,000. to fossil fuel interests, even though he will not seek re-election in 2022 as his current term runs until 2024.
Clearly, in the corrupt surroundings of the capitalist two-party system, Manchin’s personal wealth in the coal and gas business and his Big Oil earnings qualify him to chair the Senate Committee on Energy and Natural Resources, which he has ruled since 2021. During the Trump Administration, Manchin has voted with Trump’s positions more than half the time, according to FiveThirtyEight.
Sinema’s services to the American oligarchy focus on his shilling for hedge fund and private equity parasites. She is the top recipient of campaign funds from the investment industry, having taken in $2.2 million from 2017 to 2022, according to OpenSecrets.
“We have agreed to remove the deferred interest tax provision, protect advanced manufacturing and boost our clean energy economy in the Senate budget reconciliation legislation,” Sinema said in a statement released Thursday.
If she were speaking honestly, she would have said, “We agreed to keep the multi-billion dollar tax loophole for hedge fund speculators, keep major manufacturers from paying federal taxes, and award hundreds of billions tax credits to the renewable energy industry while imposing no penalties on fossil fuel companies that emit greenhouse gases.
CNN reported Thursday that Sinema held a private call earlier in the week with the Arizona Chamber of Commerce and the National Manufacturers Association, which urged Sinema to demand a change to the minimum tax provision. on corporations in the bill.
Arizona Chamber of Commerce President Danny Seiden told CNN he had made clear the business community’s opposition to the provision, saying it would impact manufacturers who take advantage of a tax deduction for accelerated capital cost allowance which reduces their tax burden.
“Is it written in a way that is wrong?” Sinema asked, according to Seiden. There is little doubt who drafted the rewrite of the provision.
As for the bill’s supposed social benefits, whose total cost is estimated at $433 billion over 10 years (compared to the bipartisan defense budget of more than $800 billion this year alone), they amount to an extension three years of the existing Affordable Care Act. subsidies and Medicare’s ability to negotiate prices for a relatively small number of prescription drugs. All substantive social measures from Biden’s Build Back Better bills have been removed, such as expanded child tax credits, child and elder care subsidies, paid sick and family leave, housing assistance, universal pre-school and the expansion of Medicare to cover dental, vision and hearing care.
If the Senate congressman decides that the provisions of the bill meet the requirements of the budget reconciliation process, which is by no means a sure thing, Schumer plans to hold a procedural vote on the measure on Saturday, August 6. It will be followed by a floor vote. debate and a flurry of amendments under the so-called “vote-a-rama” procedure.
Republicans will offer far-right anti-immigration measures and other fascistic remedies in order to block a final vote. Bernie Sanders will propose tougher measures to tax corporations in yet another exercise in demagogy, knowing his amendments will be defeated and having already announced he will ultimately vote for the administration’s pro-corporate bill.
Democrats are hoping to secure passage before Congress’s summer recess, which is due to begin on Monday, August 8.