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*  Special thanks to "Google Images", "The Pew Research Center", "CNN", "The Hill",

"US News & World Report", "Fox News" and "Bloomberg BNA" 

Editors note:  Many of the following news stories were generated with text only or accompanied with video.  "Noodleman"  has supplemented additional art from "Google Images" available under the headings for these stories.  The sources for both the story and the art (photos) have been posted for the credits.

BLOG  POST
by Felicity Blaze Noodleman
Los Angeles, CA
2.6.15

Newly elected freshman members of the upcoming 114th Congress pose for photo.

List freshman class members 114th United States, The 114th United States Congress began january 3, 2015. 13 Senators (12r, 1d) 58 Representatives (43r, 15d). contents 1 members . Members set expectations 114th congress - cbs news, The Capitol Dome Capitol Hill Washington. . (Scott Applewhite/AP) members 114th Congress converging Washington start session. The Congress 80 percent white, 80 percent male , Trying predict gender race member Congress predict win basketball game 1996 Chicago Bulls 2015.

http://exa.careleasedate.rocks/new-cars/new-member-of-114th-congress

To begin listing the goals for the 114th. Republican Freshman Congress we almost need a US Government Civics refresher course to define the process for crafting a bill which is capable of being passed through both houses of Congress.  A bill which will be signed by the President. This is the largest Republican majority in Congress since 1929.  Republicans are more concerned with producing a balanced budget and reducing the deficit and are conservative spenders.  

Many bills will be introduced into the House of Representatives as these Congressmen seek to satisfy their constituents who elected them but only the bills which have the broadest support in the House of Representatives and the Senate will actually make it to the Presidents desk for signing.  These bills will also be supplemented with what is known as "pork" to aid their journey through the legislative process!

Another phenomenon known as "Lobbying" will also be involved in the creation of the Bill writing process as Corporations, Farming and other privet interest groups all attempt to fashion legislation in Washington DC.  In fact: these organizations will play a large part of the Bill writing because the laws which are being formed will have a direct impact for many of them.  Because these groups are the experts in their field Congress will certainly by listening to what they have to say.

Republicans in the last Congress helped define the budget battle which brought about change to reduce the Trillion Dollar deficit which has ballooned during the Obama administration.  We have no doubt that the "Tea Party" wing of the Republican Party will continue to press for lower taxes and pursue deficit reduction

This week we will be looking at some of the goals of the Republicans as they ramp up their agenda for the coming year with their Democratic counterparts in Congress as they try to find common ground in legislating the bill which they will send to the President and signed into law for 2015.  Republicans will need the support of Democrats in their quest to lead the Congress to a successful beginning for the 114th.'s two year term.

Congress under Republican Leadership expected to send more bills

to President Obama. White House threatens veto of Keystone XL Pipeline bill.

http://arkansasgopwing.blogspot.com/2015/01/114th-congress-convenes-under.html

Composite by Noodleman.

"Pew Research Center"

JANUARY 12, 2015

114th Congress Is Most Diverse Ever

BY JENS MANUEL KROGSTAD

Almost one-in-five members of the House and Senate are a racial or ethnic minority, making the 114th Congress the most diverse in history. However, Congress remains disproportionately white when compared with the U.S. population, which has grown increasingly diverse in recent decades, according to a Pew Research Center analysis.

Overall, non-whites (including blacks, Hispanics, Asian/Pacific Islanders and Native Americans) make up 17% of the new Congress, but that is below these groups’ 38% share of the nation’s population. This difference also exists among the newly elected members of Congress, as minorities account for 11 of 71 (15%) new members of the House and Senate. (No new senators are a racial or ethnic minority.)

Diversity among congressional members has been growing for decades. But the nation’s population has diversified more quickly. When the 107th Congress took office in 2001, minorities accounted for 12% of Congress, compared with about 31% of the nation’s population. By comparison, in 1981, 6% of Congress was minority (black, Hispanic, Asian/Pacific Islander or Native American), while in the national population about 20% were non-white.

Among minority groups, the biggest growth over this time has been among Hispanics. In 2001, there were 19 Hispanics in Congress, compared with 32 today.

The increasing number of minorities in Congress is due almost entirely to membership changes in the House, where today 85 of 435 (20%) members are non-white, according to CQ Roll Call. In 2001, there were 60 minorities in the House. By comparison, in the Senate, just six of 100 senators now belong to a racial or ethnic minority group, up from three senators in 2001.

The increase in the number of minorities in the House since 2001 has largely come among newly elected Democrats, though Republicans have also made some gains. Since 2001, the number of House Democrats who are minorities increased by 18, from 56 then to 74 now. By comparison, there was an increase of seven representatives among House Republicans over the same period, rising from four then to 11 now.

But despite these non-white gains, whites account for 83% of the new Congress but just 62% of the population. This gap has widened over time. In 1981, 94% of Congress was white compared with about 80% of the U.S. population.

Another way to measure the racial and ethnic diversity of Congress is to see what share of the U.S. population is represented by House members of the same racial or ethnic group. For the current Congress, 35% of the nation’s black population is represented by a congressional representative who is black, the highest of any minority group. By comparison, 22% of Hispanics, 12% of Asians and 8% of Native Americans are represented by someone of the same racial or ethnic group.

http://www.pewresearch.org/fact-tank/2015/01/12/114th-congress-is-most-diverse-ever/


"CNN"

GOP Agenda for Congress: Challenge Obama, Prove They Can Govern

Deirdre Walsh and Ted Barrett, CNN

Updated 11:05 AM ET, Tue January 6, 2015

Story highlights

• Republicans are eager to shake off past scandals and seize control of both chambers of Congress
• Top agenda items for the GOP include: Approving the Keystone XL pipeline expansion and confronting the President
• House and Senate Republicans will huddle in a rare joint retreat in Hershey, Pennsylvania in mid-January

Washington (CNN)If Republican leaders can quell conservative dissatisfaction with House Speaker John Boehner, and no further drama comes out from the House leadership's No. 3 Rep. Steve Scalise, GOP heads hope to get back on track with their aggressive agenda to forcefully confront President Barack Obama on the top issues of the day, including the Keystone XL pipeline, immigration, health care and national security.

Republicans believe their legislative plans will sharpen for voters the contrast between the GOP and Democrats, and set the stage for the 2016 presidential and congressional elections.

"The first thing we need to do is demonstrate we heard what the voters were saying on Nov. 4. To me, they said we want you to function and we want you to solve problems," Texas GOP Senator John Cornyn, the number two Republican leader, told CNN.

Republicans have a long list of priorities, chief among them unraveling many of the president's signature policies on energy, health care, the environment, and banking. Their job won't be easy because for any bill to get through the Senate, the 54 Republicans will need a handful of Democratic votes. Republican leaders say they want to put on the floor compromise bills that can bridge the ideological gap between the most conservative members of the GOP and a small group of centrist Democrats who might vote with them.

In addition, the President is vowing to veto major changes to his signature health care law or the recent immigration reforms he ordered. So anything Republicans hope to get signed into law will have to be negotiated with Obama, who they fiercely stood up to during his first six years in office.

"When the American people elect divided government, they're not saying they don't want anything done," a collaborative sounding incoming Senate Majority leader Sen. Mitch McConnell recently told CNN's Dana Bash. "What they are saying is they want things done in the political center, things that both sides can agree on."

In a sign of how important Republicans are taking their new responsibilities, House and Senate Republicans will huddle in a rare joint retreat in Hershey, Pennsylvania in mid-January to finalize and unite around their strategies for 2015.

Approval of the Keystone pipeline, which the administration has delayed for years, tops the GOP agenda. Votes are planned on the House and Senate floor during the first two weeks of January. GOP leaders also plan quick votes on Obamacare and immigration.

If they pass, the President would be forced to either accept or reject the bills. Republicans believe they win either way: If he signs them, Republicans will have accomplishment to point to. If he vetoes them, the GOP can blame the President for blocking bipartisan bills.

"Hopefully, the President will follow our lead and go in a different direction," McConnell said.

McConnell has said also he wants to allow Democratic amendments to GOP bills, something Republicans were denied regularly by Democrats when they controlled the Senate. In doing so, McConnell believes he can build good will across the aisle and grow support for individual bills. He believes also, strategically, that Democrats will quickly run through a series of hot-button Democratic issues -- like bolstering EPA regulations and boosting the minimum wage -- that could be more difficult for GOP senators running again in swing states to vote on if they took place closer to the election.

In the House, Boehner will have a larger majority -- 246 GOP seats -- and aides from both parties expect the Speaker will be able to bypass Democrats push through most legislation with mainly Republican votes. But because the continued internal tensions between conservatives and those GOP members hoping to resolve key policy issues will persist, Boehner might again need to turn to Democrats on key spending or fiscal matters.

"If we didn't have the President we'd be shuttered off to the side -- we don't care what you think," Rep Steny Hoyer, the number two House Democrat told CNN. While he said he was willing to work with GOP leaders, Hoyer said even in the minority Democrats would remain relevant in major policy debates because of GOP defections, and a key role for Democrats in the new Congress would be to work with the president to sustain any vetoes.

Here is a look at what Republicans have in the works:

Keystone/energy -- Republicans say construction of the pipeline is an easy way to create jobs and lessen U.S. dependence on oil from the Middle East. A Senate bill fell one vote shy of the 60 needed to overcome a Democratic filibuster in November. Republican leaders are confident they can pass it now but acknowledge it's unlikely they can get 67 votes to override a presidential veto.

Economy/jobs -- In 2014, House Republicans passed a series of narrowly focused bills designed to create new jobs. Many of these rolled back federal regulations on manufacturers, which the GOP argued prevented businesses from expanding. Some passed with bipartisan support but hit a wall in the Democratic-controlled Senate. Now Republicans are scheduling new votes on these same bills in both chambers and hope to garner enough support to send them to the President.

Obamacare -- The day after the midterm election Boehner and McConnell promised to keep up their effort to repeal Obamacare, which not a single Republican voted for when it was enacted. They recognize they don't have the votes to get over a certain presidential veto of a complete repeal so are looking at smaller changes to the law that are supported by bipartisan lawmakers.

The first week back House GOP leaders scheduled votes on two measures increase the threshold employers have to reach to provide healthcare to workers from 30 to 40 hours per week. One GOP bill deals narrowly with changing the law to encourage hiring more veterans and another is a broader proposal affecting all businesses.

Votes are likely on doing away with the medical device tax that helps pay for the law.

There is an internal debate among Republicans whether to use a special budget tool -- known as "reconciliation" -- that could allow them to pass a repeal in the Senate with just 51 votes. But because the President has said he will veto that bill, some Republicans want to save reconciliation, which can only be used once, for another priority, like tax reform, entitlement changes, or energy policy.

Immigration: Boehner vowed he would fight "tooth and nail" to reverse the president's executive actions, enacted in November, to allow roughly 5 million undocumented workers to remain in the U.S. Funding for the Department of Homeland Security runs out at the end of February.

Late last year, Republicans would only agree to fund the agency, which needs to carry out the immigration orders, until then because they want to try to force the President to reverse course. The standoff has the risk of shuttering the department, which responds to terrorism, natural disasters and other politically-sensitive matters. Republicans are readying action on this issue soon -- likely in the House in the second week of January.

Tax reform: Members have both parties have stressed they want to simplify the tax code, but a major impasse has prevented progress. Republicans oppose measures that could be characterized as a tax hike. Democrats want to expand current tax breaks such as the earned income tax credit and the child tax credit, but some in the GOP argue these are abused by undocumented workers. Democrats also want to close loopholes for corporations, which Republicans oppose.

Foreign policy and National Security: Cuba, Iran, Iraq and Syria likely will dominate the agenda. Republicans are vowing to push back on the President's executive actions to restore diplomatic relations with Cuba but aren't settled on a strategy yet on how to do it. They also oppose his negotiations with Iran over that nation's nuclear program and may quickly call a vote on a bipartisan bill to increase sanctions on Iran. That could upset the delicate multinational talks that were recently extended.

Congress is expected to act early in 2015 on a new use of force authorization against ISIS fighters in Iraq and Syria. That debate will focus on how much latitude to give the White House and whether to restrict the use of ground troops as many Democrats want.

IRS/Benghazi: Republican-led investigations will continue into whether the IRS unfairly targeted conservative groups and whether the administration covered up its handling of the Benghazi attacks. Democrats complain both investigations are politically motivated and should be ended.

Trade/Infrastructure: Republicans will likely advance trade bills that were opposed by many House and Senate Democrats. New spending for upgrading the nation's roads and bridges in another area where both parties could cobble together a bipartisan vote. McConnell told CNN in December, "We have certainly a lot of bipartisan interest in the crumbling infrastructure in the country and what to do about it."

http://www.cnn.com/2015/01/05/politics/gop-agenda-for-the-new-congress/

"The Hill"

GOP Seizes Chance To Put Holder On Trial

By Justin Sink and Tim Devaney - 01/28/15 06:00 AM EST

http://reason.com/blog/2014/09/25/eric-holders-legacy-duplicity-incompeten

Republicans in the Senate are planning to use their first high-profile confirmation hearing to put Eric Holder on trial.

GOP lawmakers plan to use Wednesday’s examination of Loretta Lynch, the federal prosecutor picked by President Obama to replace Holder as attorney general, to air long-standing grievances with the Obama administration.

They’ve long seen Holder and Obama as skirting the law on hot-button issues such as immigration, counterterrorism, tax enforcement and drug policies. And the president’s frequent use of executive action and regulation has drawn accusations that he’s exceeding his authority under the Constitution.

“I think there’s an erosion of confidence in the Department of Justice on the fundamental question of whether the attorney general politicizes the office,” Sen. Jeff Sessions (R-Ala.) said Tuesday. “We need an attorney general that won’t politicize the office.”

But while GOP lawmakers are relishing the opportunity to sink their teeth into Holder’s record, they also concede Lynch — barring any misstep — is likely to be confirmed.

Her reputation as being tough on crime has won praise from both sides of the aisle, with Fox News Host Bill O’Reilly calling her a “hero” last week, leaving the White House confident she’ll win over the Senate.

One aide said Tuesday the White House was “looking forward to Mrs. Lynch showing the Senate Judiciary Committee and the American public just why she is so qualified for this position.”

While Lynch’s nomination appears assured, as Democrats need only a handful of Republicans to cross the aisle and support her nomination, she might have trouble staying out of the partisan crossfire at her confirmation hearing.

Republicans will be looking for areas where Lynch will demonstrate distance from Holder, who remains anathema to many on the right, and intend to ask her how she plans to do things differently.

“The Justice Department is a big mess,” said Judiciary Chairman Chuck Grassley (R-Iowa), “and we want to know how she’s going to straighten out the department.” 

One of the biggest points of contention will undoubtedly be immigration on the heels of the president’s announcement late last year that he would use prosecutorial discretion to defer deportation for up to 5 million illegal immigrants.

Republican lawmakers have argued the move is unprecedented and extrajudicial, and at least one lawmaker on the Judiciary Committee — Sen. David Vitter (R-La.) — plans to oppose Lynch’s nomination in protest.

Sessions, who also sits on the panel, has been among the Senate’s most outspoken opponents of the president’s executive action. And Sen. John Barrasso (R-Wyo.) said he’d judge her qualifications for the job based on how she responded to questions about the president’s immigration plan.

Another Judiciary panel member, Sen. Lindsey Graham (R-S.C.), said he had two things he wanted Lynch to address: his push for the DOJ to target Internet gambling more aggressively and his concern over efforts to close the prison at Guantanamo Bay.

The witness list released ahead of the hearing suggests other issues Republicans could use to score points by attacking Holder’s tenure.

The committee has invited former CBS News reporter Sheryl Attkisson, who investigated the Justice Department’s “Fast and Furious” gunrunning program, to appear before the panel. Congress held Holder in contempt for withholding documents from a House panel investigating the program.

After leaving CBS to join the Heritage Foundation, Attkisson filed a $35 million lawsuit against Holder accusing the federal government of spying on her.

Questions about the Justice Department’s treatment of journalists will be amplified by another witness, Jonathan Turley, a George Washington University professor known for having called for Holder’s resignation over the government’s seizure of phone records belonging to The Associated Press.

Holder has since moved to alter department guidelines to offer additional protections to journalists by limiting subpoenas of reporters and news organizations.

But Turley has also led House GOP legal efforts against the White House, charging executive overreach, with Republicans indicating the president’s use of executive power would again be an issue.

“I bet everyone of the 10 [Republican] senators will have a question about executive action,” Grassley said.

http://thehill.com/homenews/administration/230954-gop-plans-attack-on-holders-record

"US News & World Report"

On His Own

An aggressive solo actor

Regional divisions and GOP hostility in Congress give Obama little choice but to act alone.

By Susan Milligan Jan. 26, 2015 | 2:30 p.m. EST

The broad critiques of President Barack Obama have fallen into one of two categories: Either he’s a weak leader, unable to bring Congress together to pass even a basic series of appropriations bills, let alone a sweeping immigration package, or he’s a wannabe emperor, someone who acts on his own with no regard for the separation of powers or consultation with Congress.

There’s some truth to both of those accusations, but it’s unfair to lay the blame for either on the president himself. The reality of the presidency in general is that chief executives don’t have anywhere near the amount of power the fancy title suggests. And the reality of this presidency is that Obama in particular has had such a hostile Congress that there’s little he’d be able to do in concert with the legislative branch, no matter what the issue.

Obama has so far been an aggressive solo actor in the second half of his second term, freed not only by the fact that he’ll never have to run a campaign again (or be blamed for the losses of those in his party), but by the fact that he actually has a GOP-run Senate to contend with now. With no Democratic Senate majority to protect or share the message with, Obama can do a lot on his own without the same political fallout. The most recent example happened over the weekend when the president declared his intentions to expand the protected areas of the Arctic National Wildlife Refuge in northern Alaska. Only Congress can officially declare the new area protected wilderness (often meaning no roads, let alone oil or gas drilling) but by identifying the area for inclusion, Obama ensures that the region will be protected until and unless Congress or another administration acts.

Ideally, such a decision would have been made in consultation with Congress. But such ideals don’t exist anymore, and never really existed as they have in political mythology.

There’s a tendency, when bemoaning the uncooperative relationship between the executive and legislative branches, to hold up Lyndon Baines Johnson as the master – not only of the Senate, but of the entire Congress, when he became president. LBJ indeed held enormous power over the Senate when he served in the chamber and when he negotiated with it as president. But this was not entirely a function of LBJ’s own skills and leadership (though he had both qualities). It was due to the fact that the Senate at the time had dramatically different dynamics. The Southern contingent was populated by conservative Democrats, and Johnson, as a Texan, could bring them over to his side in a way Obama simply cannot do with the current Senate. The country is now more regionally polarized. The days when northern Rockefeller Republicans would sign onto a Democratic bill, or conservative Southern Democrats would hand a few votes to a GOP Senate majority leader or president, are over. That’s not Obama’s fault, but it is his biggest roadblock.

Some other tools from the old days are gone as well. The House, for example, no longer allows “earmarks,” budget items that are designed to help a particular community or state. Their elimination has been touted as a way to fight corruption and budget waste. (In fact, the so-called “pork” projects represented a miniscule part of the budget.) But getting rid of them takes away a negotiating tool for both congressional leaders and the president.

Finally, Obama is dealing with an unusually hostile Congress, one whose GOP members have made no secret of their intentions to thwart the president at every opportunity. That’s their right. But if they use their own power to keep the president from doing anything, they can’t complain when the president, in turn, uses his power to go around them. It’s not functional or a democratic ideal, but it’s a predictable outcome.

Obama’s on a tear, doing what he can through executive order and federal rule-making to achieve what he can in the time he has left in office. Congress is understandably feeling left out. But until the geographical divisions in Congress ease – or until members of Congress stop seeing any Obama administration win as an automatic loss for themselves – this is how it’s going to be. 

http://www.usnews.com/opinion/blogs/susan-milligan/2015/01/26/why-obama-and-congress-cant-get-along

House GOP To Hold First ObamaCare Repeal Vote Of New Congress

http://www.newrepublicoftexas.com/house-gop-to-hold-first-obamacare-repeal-vote-of-new-congress/

Published January 27, 2015

FoxNews.com

In control of Congress for the first time in eight years, Republicans are set to hold their first vote to repeal ObamaCare next week, Fox News has learned.

The vote comes as Republicans have debated how to address the controversial health care bill. GOP lawmakers are facing rising pressure from conservative groups and activists to go big in their efforts to dismantle the law, but the party is stuck in an internal debate over how far they can go, and whether undoing it piecemeal is a preferable course of action.

The party hierarchy also has had trouble rallying its rank-and-file members to get on board with other pieces of legislation so far in the 114th Congress, including a failed abortion bill last week and a border security bill that was sidelined on Monday.

The Republican-controlled House has voted more than 50 times to repeal or defund all or parts of ObamaCare since its passage in 2010. None of those bills, however, were considered by the Senate, which was controlled by Democrats until this month. But even Republicans in control of the Senate, however, it still remains extremely unlikely that any House-passed ObamaCare bill would reach Obama's desk -- where it would face certain veto -- as the party remains six seats short of being able to attain cloture.

Tea Party activists have said they are frustrated with the pace of progress toward conservatives’ goal of upending ObamaCare, officially known as the Affordable Care Act.

Some activists are encouraging members to “fax blast” all 435 House members and 100 senators and demand they “drive a stake through the heart of ObamaCare once and for all.”

Some Tea Party-backed lawmakers like Texas Sen. Ted Cruz are leading the charge against the Affordable Care Act. The senator, and potential presidential candidate, recently warned that Republicans will “get walloped” in 2016 if they don’t live up to their promises, including working to get the health law eliminated.

But so far, several Republican lawmakers, like Senate Finance Committee Chairman Orrin Hatch, R-Utah, have indicated they’d have better luck chipping away at the law “piece by piece.”

Last Wednesday, Hatch and Sen. Lamar Alexander, R-Tenn., introduced legislation to repeal the health care law’s individual mandate requiring most people to obtain insurance. The legislation, called the American Liberty Restoration Act, is backed by 20 GOP senators.

"This legislation strikes ObamaCare’s individual mandate and restores the freedoms outlined in the Constitution,” Hatch said in a written statement.

Hatch and a group of bipartisan senators also are pushing a bill to scratch the law’s controversial 2.3 percent tax on medical devices.

Several conservative activists and commentators in recent weeks have urged the new Republican Congress to be aggressive. Since right after the election, Brent Bozell, chairman of the conservative ForAmerica group, has said the Republican majority “must” keep its “promise” to pass a full repeal bill, if only to force a presidential veto.

If they don’t, it raises the possibility not only of turbulence for GOP congressional candidates in 2016 but a groundswell of anti-ObamaCare pressure in the presidential primaries and caucuses.

In the official Republican response to the State of the Union address, Sen. Joni Ernst, R-Iowa, vowed that the party will “keep fighting to repeal and replace a health care law that's hurt so many hardworking families.”

Freshman Sen. Bill Cassidy, R-La., also has called for Congress to go after the law and is among many GOP lawmakers who have signed a pledge calling for its repeal. He recently told The Hill, “There is a tide rising” against the health law.

But like Hatch, he has put forward bills repealing the medical device tax and the individual mandate – parts of the law, not the whole thing.

Party strategists have questioned whether aiming for full repeal is worth the effort, when President Obama would surely veto.

“Republicans should not, again, go down the road of full repeal for ObamaCare when they know the president’s not going to have an epiphany and say, ‘You know what? I screwed up. Yeah, let’s repeal my legacy legislation,’” Republican strategist Brad Blakeman told FoxNews.com.

FoxNews.com's Barnini Chakraborty contributed to this report.

http://www.foxnews.com/politics/2015/01/27/house-gop-to-hold-first-obamacare-repeal-vote-new-congress/


"Bloomberg BNA"

February 3

Prospects for International Tax Reform in the 114th Congress

Tax reform after the mid-terms: why we can expect Congress to act

https://www.dlapiper.com/en/us/insights/publications/2014/11/tax-reform-after-the-mid-terms/

By Philip Morrison, Esq.

McDermott Will & Emery, Washington, DC

When this commentary is being written (in mid-December), several recent developments and comments from important people have made it modestly worthwhile to discuss the prospects for enactment of international tax reform during the 114th Congress. It's still an exercise in crystal ball gazing, of course, but at least there are a few fuzzy signals worth analyzing. Besides, the holiday season is always a time for looking back at what we've done in the past year and planning for the new year. Whether or not predictions of any value can be made, corporate clients and C-suite bosses of company tax executives will likely demand some information about the prospects for corporate and international tax reform. Perhaps the most important question to analyze is whether business/corporate-only tax reform has a chance.

First, let's review where we stood just before the mid-term elections in November 2014. Representative Camp, then-Chairman of the Ways and Means Committee, unveiled a comprehensive and detailed business and individual tax reform proposal in February 2014. While it was greeted with considerable opposition by many in the business community, it has been lauded as at least a very good starting point by Congressmen and Senators on both sides of the aisle. In the final few days of the 113^th Congress, Mr. Camp introduced his proposal as a bill.

One thing the Camp draft pretty clearly does is demonstrate in some detail what a difficult job enacting tax reform will be, at least if it must be revenue neutral. To achieve a 25% corporate tax rate and a modified territorial system a lot of pain must be endured.

The challenges in the international area alone are formidable. The proposal has a tough thin cap rule in addition to providing a participation exemption of only 95%. Subpart F is significantly broadened by taxing all IP-related income, though at a lower rate if related to selling into foreign markets. And IP-related income, defined by formula, is quite broad. Accumulated CFC earnings are taxed over eight years under a split rate system, depending on whether those earnings are invested in cash or cash equivalents versus less liquid assets.

The "domestic" business revenue raisers are also likely tough to enact. They include limits on the use of NOL carryforwards, the phase-out of §199, the amortization of research expenses and advertising expenses, a repeal of LIFO accounting, application of deduction limits to performance-based compensation (i.e., stock options), an excise tax on big banks, and many more.  Perhaps most problematic to business taxpayers, similar to the 1986 Act, the proposal raises roughly $700 billion in revenue from business and international provisions over the 10-year budget window, which it uses to pay for individual tax reduction.

Yet for all this pain, the Camp proposal does significantly lower the corporate rate, achieves a sort of rough parity with the corporate tax for most business income reported (through pass-throughs or otherwise) on individual returns (all with little change in the distribution tables), "unlocks" accumulated CFC earnings, and provides a bit of progress towards making many U.S. multinational enterprises less tax-disadvantaged compared to their foreign competitors. Still, while these accomplishments are laudatory, given the pain inflicted one must rate the chances of passage of such a bill, or a similar one, as very low. Since such pain (though perhaps $700 billion less in a corporate-only package) is a necessary part of reform in a revenue neutral bill, this augers against real progress in the next two years.

Second, the recent (again, as of mid-December) actions involving the so-called "extenders" provide some possibly important, though conflicting, signals about the prospects for reform in the next Congress. As readers will recall, just before Thanksgiving a bipartisan, bicameral deal was struck to make permanent 10 of the most popular extenders, including the research credit, and to extend to the end of 2015 the rest of the list. This deal apparently had more than enough votes to pass. Given Washington's dysfunction in recent years, this compromise was mildly remarkable. Among the provisions to be made permanent were items of importance to both Republicans and Democrats. By making permanent a big ticket item like the research credit it also made corporate reform in the future a tad easier (i.e., the revenue baseline would have been lowered). It appeared to be a signal that perhaps the parties could work together and reach a compromise.  True, there was no pain—the deal included no revenue raisers or spending cuts to offset the costs of the bill—but at least there was a balance in the provisions.

Of course, this baby step towards bipartisan compromise was too good to be true. The Obama Administration, after it assured that it had the votes to sustain a veto, issued a threat to veto it. As a result, the compromise deal was abandoned and both houses passed a retroactive one-year extension of all extenders to the end of 2014, a mere two weeks from the bill's date of Senate passage.  Outgoing Senate Finance Chairman Wyden, who voted against it, noted that it had a "shorter shelf life than a carton of eggs."

The Administration's veto threat, and the reason for it, is mildly informative to the analysis of the prospects for corporate and international tax reform in the next two years. The Administration objected to the lack of inclusion in the list of extenders to be made permanent the expansion of the EITC and child care credit, both of which expansions expire at the end of 2017. Republicans objected to these expansions being made permanent because, among other things, they thought that these were benefits that exacerbated, from their view, President Obama's executive action on immigration. Given this focus, the veto threat could just be a signal of the Administration's intent to use every tool available to fight any attempt to roll back or limit in even the remotest of ways its executive actions on immigration. 

On the other hand, especially given the rhetoric used regarding an imbalance of corporate versus individual benefits in the compromise package, the veto threat could be an indication of reluctance on the part of the Administration to use any political capital to achieve corporate-only reform. If Democrats' major focus in the near future is to address the economic woes of the middle class, improving corporate taxation as a means to that end looks more like a page out of the Republicans' playbook, not the Democrats'. While comments noted below may undercut this theory of what the extenders veto threat augers, this commentator subscribes to the old adage that actions speak louder than words.

Third, the new chairmen of the tax-writing committees have each made some comments about their priorities, including tax reform. Incoming Chairman of Ways and Means, Paul Ryan, while putting tax reform among the highest of his priorities, has stated that it could happen in either 2015 or 2017. Suggesting a 2017 target, of course, before the 114th Congress has even convened, does not suggest quick action will be forthcoming. While a prior supporter of Rep. Camp's proposal, Ryan also recently has described that proposal "as a marker, not necessarily a starting point." This, too, indicates that a lot of distance must be travelled before we see reform. But corporate-only reform is not off the table for Chairman Ryan. While noting that individual reform is critical since a majority of businesses are pass-throughs or sole proprietorships, Mr. Ryan has, however, opened the door to corporate-only reform, as a sort of phase one or a "good step in the right direction" towards more comprehensive reform. This indication of a willingness to move forward on a corporate and international package alone is a very important concession, even though packaged as a "first step" towards more comprehensive reform.

Incoming Senate Finance Committee Hatch's staff recently published a 300-plus-page report laying down some important principles and ideas for tax reform. While an important and informative document to read to evaluate Chairman Hatch's and Senate Republicans' thinking, it shies away from making many explicit proposals and, critically, does not fully describe the trade-offs necessary to achieve the rate reduction it advocates in a revenue neutral fashion (though, in its defense, it was not intended to). On the international side, the report suggests a "low-tax kick-in" as a possible expansion to Subpart F and a participation exemption for CFC dividends, with a haircut to partially account for the deductibility in the United States of expenses that helped create the exempt income. It also endorses corporation/shareholder integration through either a dividends paid deduction or a dividend exclusion. Assuming the top corporate and individual rates could be made close to each other, it suggests that corporate tax be imposed only on public entities, with flow-through taxation for all other businesses. It is hard to see how the principles in this report could lend themselves to a corporate-only tax reform effort.

Fourth, the Administration has made vaguely positive noises about corporate tax reform. This is tremendously important given that Congress, both Members and staff, both Democrat and Republican, have complained for at least the last year of a lack of leadership on this subject from the Administration/Treasury. President Obama made comments to the Business Roundtable that corporate tax reform was an area where he could see common ground (perhaps better described as differences that might be bridged by possible compromise) with Republicans if they'd only not insist on individual reform at the same time. Treasury Secretary Lew has made similar remarks.

Importantly, these high-level remarks were followed up by remarks from Assistant Treasury Secretary Mazur on two important fronts. First, Mr. Mazur indicated that, if it was necessary to advance reform, Treasury would promulgate a detailed business tax reform proposal in the next six to 12 months. So long as this is not limited to simply a gathering together of budget proposals made over the last six years (though certainly one should expect them to be a part), a detailed proposal would indicate that the Administration wants to put at least some muscle behind the corporate and international tax reform effort.  It would also focus the debate more sharply than an outline of principles.  Second, Mr. Mazur indicated that Treasury was thinking of ways to assure that the base broadening necessary for corporate rate reduction did not result in pass-through businesses "essentially subsidizing" corporate reform. He specifically mentioned expanding expensing under §179 and expanding the availability of the cash method of accounting.  This is critical to both Republican and Democratic members of Congress, given how much more of American business income runs through pass-through entities than was the case in 1986.

In addition to the analysis above, a complete analysis of the prospects for corporate and international tax reform in the 114th Congress requires a careful look at specific substantive proposals/guidelines promulgated by the various players mentioned above. Unfortunately, space does not permit that here. It is instructive, however, to note some general similarities in the international arena.  All parties appear to endorse some significant expansion to Subpart F, whether through a general low-tax kick-in, an expansive definition and moderate taxation of IP income or regular taxation of "excess returns," a new toll manufacturing income category, or a combination of these ideas. All also seem inclined to tax, at a lower rate, the accumulated unrepatriated earnings of CFCs, though there is a difference of view as to whether that temporary revenue pickup should be used to offset other permanent corporate tax benefits (like rate reduction).  And whether one calls it a minimum tax on CFC income or a participation exemption with a haircut, the parties seem to endorse an exemption of some portion of future earnings of CFCs. The differences, while important, are matters of degree, not fundamental principles.

So, what is the bottom line for the prospects of corporate and international tax reform in the 114th Congress? With a fair amount of "sort-of" common ground in the international arena, a recognition that some special provisions must give way to achieve rate reduction, and the positive comments from the chief players, surely one must give corporate and international tax reform some decent chance of passage in the next two years, shouldn't one? That certainly is not an unreasonable conclusion. However, given that both tax-writing committees in Congress have new leaders, given the Administration's demonstrated willingness to veto a bill which, like the extenders deal, doesn't contain most everything it wants, given the likelihood that Republicans will not give the 
Administration most everything it wants, given the intense lobbying that will continue to protect the tax provisions that must be pared back to raise the revenue for rate reduction, and given the very vocal complaints likely to be heard from either extreme on the left or the right with respect to any compromise, this commentator still rates the chances of such reform in the 114th Congress as low.

This commentary also will appear in the February 2015 issue of the Tax Management International Journal.  For more information, in the Tax Management Portfolios, see Isenbergh, 900 T.M., Foundations of U.S. International Taxation,  and in Tax Practice Series, see ¶7110, U.S. International Taxation: General Principles.

http://www.bna.com/prospects-international-tax-n17179922721/

This concludes our peek into the 114th. Freshman Congress of 2015.  This only the beginning  and these news stories will give us an indication of the direction for this Republican Congress.  Don't look for this Congress to "get thew led out" for some time to come!  This has been Felicity writing for the "Noodleman Group".  See you next week! 

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