The hurdles ahead for the Inflation Reduction Act

Jennifer Schonberger joins Yahoo Finance Live to discuss where key Democrats in the Senate stand on the Inflation Reduction Act, a major piece of climate, energy, and health care legislation.

Video Transcript

- It's an uphill battle for the Inflation Reduction Act as it awaits a key vote from Senator Kyrsten Sinema who is still reviewing the piece of legislation. Joining us now for some insights on the possible changes here is Yahoo Finance's Jennifer Schonberger. Jen?

JENNIFER SCHONBERGER: Good morning, Brian. That's right. Passage of the Inflation Reduction Act hanging in the balance says Senator Kyrsten Sinema reportedly balking at some tax revisions in that bill, as well we're waiting to hear from the Senate parliamentarian.

The Arizona Democrat who has yet to officially weigh in on this bill wants to nix narrowing the so-called carried interest loophole for profits for private equity. According to several reports, that would remove about $14 billion of the bill's $739 billion in projected revenue.

She's also looking at the merit of the legislation's 15% proposed corporate minimum tax. That provision is the biggest revenue generator expected to raise about $313 million-- billion rather. At the same time, Sinema wants to add $5 billion in drought resiliency funding according to Politico, that of course, a key issue for Arizona who struggles with water supply issues. Now Sinema's office tells me this morning the Senator is still reviewing the text and does not have further comment on those reported issues.

Democrats still need Sinema support to pass the bill using a fast track budget procedure known as the reconciliation process to bypass Republicans. Changing these tax revisions risks Senator Joe Manchin's support who has negotiated the package with Senate Majority Leader Chuck Schumer and has called the carried interest provisions important for tax fairness.

Meanwhile, the Senate parliamentarian still thumbing through the bill text to see if any provisions would not meet the stringent rules for the reconciliation process. Guys, no word yet from Senator Schumer on when he looks to schedule debate on this bill. He is expected to speak on the floor of the Senate at 12:00 noon when it convenes. So hope to learn more details then. Guys?

- So Jen, what are the chances? If you just take a step back, with all of the wrangling, what's the kind of chance that this thing actually has of getting through?

JENNIFER SCHONBERGER: Yeah, so a lot of it just hangs in the balance and hangs on what Kyrsten Sinema wants to do and whether that changes the calculation of the revenue projections and how this weighs out with the parliamentarian. We are getting down to the wire here because it is Thursday, and come next week, a Senate is expected to be on August recess.

So there's going to be a lot of back door negotiations that are expected here as we do the final innings. And it's possible that this could get pushed into the weekend. And we have a longer vote-a-rama as Senate Democrats try to ram this through before they go on recess. I doubt they want this to linger through and pick this back up in September.

- Yes. And we know they got to get their vacation in. All right.

JENNIFER SCHONBERGER: That's right.

- Thanks so much Jen, appreciate it.

JENNIFER SCHONBERGER: Nothing like a vacation to push senators.

- Yes. It's a good motivator, I think. All right.