Neal says Sinema is ready to deal

The head of the powerful House Ways and Means Committee said Thursday that Sen. Kyrsten Sinema (D-Ariz.), one of the centrist holdouts resisting President Biden’s sweeping economic agenda, is ready to get a deal. 

Rep. Richard Neal (D-Mass.) said he spoke with Sinema for roughly 30 to 40 minutes Thursday morning in an effort to break the impasse over Biden’s massive social benefits package. According to Neal, Sinema indicated that a failure to pass the president’s top agenda item is not an option. 

“I started the conversation with that. I said, ‘Kyrsten, this has got to pass.’ She said, ‘I couldn’t agree more,’ ” Neal told reporters outside the Capitol.

Sinema has balked at several of the revenue raising provisions designed to help cover the full cost of the social spending bill, which includes a broad expansion of health care benefits, safety net programs and efforts to combat climate change. Her opposition has infuriated liberals on and off of Capitol Hill, who are accusing her of coddling corporations and other well-heeled interests at the expense of her own constituents. 

Negotiators are eying a package in the range of $2 trillion — down from the initial $3.5 trillion favored by Biden and House Democrats. But Sinema has reportedly rejected several of the major offset provisions, including proposed tax hikes on corporations and wealthy individuals. 

Neal said he made the case for keeping both the corporate tax hike and the international minimum tax in the package. Sinema did not agree, he said, but nor did she push back. 

“I made the argument for efficiency in tax policy, and the way you do that is simplicity of corporate increases, and pointed out that not only are they efficient, but they weren’t punitive — [that] this was still good pro-growth economics,” Neal said. 

“She didn’t say no, she just listened to what I had to say.”

Asked if he is willing to accept a corporate rate lower than 26.5 percent — the figure featured in the House package — Neal hinted that he was. “I want a deal,” he said.

And on the topic of the international minimum tax, Neal pointed out that a growing number of countries have agreed to adopt it as a way to limit offshore tax havens.

“I think that what the Ways and Means Committee accomplished on the international side makes a great deal of sense. And 15 percent was a reasonable level,” Neal said. “I made the argument for it again in terms of efficiency, harmonization and the fact that 146 nations around the world have agreed to our proposal.”

On the spending side, Neal said Sinema ranked her own policy priorities, putting the shift to renewable fuels at the top, followed by an extension of the child tax credit, and then an expansion of paid medical leave.

Both Sinema and Sen. Joe Manchin (D-W.Va.) have argued for a much smaller spending amount, in the range of $1.5 trillion, but Neal said he’s still pressing for something a bit higher. 

“I did point out that in my judgment we needed $2 trillion, at least,” he said. 

Following the call, the staffs for Neal and Sinema have agreed to continue talking, Neal said. He cautioned that an agreement is not imminent — “I still think there’s a long ways to go,” he said — but he also pressed Sinema on the urgency of getting an agreement in the not-too-distant future. And the best way to do that, he argued, is not to introduce a whole new slate of offset provisions to replace the corporate tax hikes. 

“I did point out that it’s the ninth inning. I mean, when are you going to vet these issues?” Neal said. 

The Ways and Means chairman said he’s optimistic that a deal will materialize. And Sinema, he said, agrees.  

“She said to me: ‘We agree on this, this has got to happen,'” Neal said. “That gives us an opening.”