W21st NYC's List: 2014 Aftermath

• The case concerns tax subsidies that currently help millions of people afford health  insurance under the law. According to the challengers, those subsidies are  being provided unlawfully in three dozen states that have decided not to run the  marketplaces, known as exchanges, for insurance coverage.
• The case is likely to be argued in February or March, and a decision will  probably arrive in June, three years after the court ruled that Congress had  acted constitutionally in enacting the law.
• The challengers say the provision means that only people in states with their  own exchanges can get subsidies. Congress made the distinction, they say, to  encourage states to participate.
• But the Internal  Revenue Service has issued a regulation saying subsidies are allowed whether  the exchange is run by a state or by the federal government. The challengers say  that regulation is at odds with the law.

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• And six years into the Obama administration, and more than seven since  legislation was introduced to end the favorable treatment of carried interest,  it seems astonishing that it lives on as a multibillion-dollar tax windfall for  an elite group of superwealthy hedge fund, venture capital and private  equity managers.
• Carried interest is the share of any profits that partners in hedge funds, private  equity firms and venture capital funds receive as compensation, on top of  management fees. A common compensation formula is for managers to get 2 percent  of the amount under management, in addition to 20 percent of any gains, which is  carried interest. Under current tax law, carried interest is treated as a  capital gain, subject to the top 20 percent capital gain tax rate plus a 3.8  percent surcharge to help pay for the Affordable Care Act, rather than as  ordinary income that is subject to a top marginal tax rate of 39.6 percent.
• There’s no requirement they contribute capital to receive the carried interest.  The fact that the ultimate amount of compensation may not be known for years is  no different from the kind of compensation received by many people who still  have to pay ordinary income tax rates.

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• They are expected to hold at least one symbolic vote for repeal in the next  session so that newly elected Republicans who campaigned against the law can  honor their pledges to repeal it. But Republican leaders know they don’t have  the supermajorities needed to override a presidential veto, so they will try to  inflict death by multiple cuts.

• The deal taking shape would be slipped into the catch-all federal spending bill  that is meant to finance the government in 2015, according to Capitol Hill  sources who are not authorized to speak publicly. It would effectively repeal a  plank of the Dodd-Frank financial reform law that would force big banks to  conduct their most speculative derivatives trades in separately-capitalized  subsidiaries, where they would be ineligible for federal deposit insurance,  Federal Reserve assistance or other taxpayer-provided support.
  
• The point of the repeal is to coddle the banks and, in the process, protect the  flow of campaign funds from Wall Street.
• The banks don’t want to set up separate subsidiaries for risky derivatives  because it is more profitable for them to operate with taxpayer-backing. They  have previously persuaded bank regulators to delay the effective date of the  provision. But, at long last, the regulators recently made it clear that there  will be no further delay. Hence the banks’ all-out push for repeal.

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• The secret negotiations that led to one of the most significant expansions of  campaign contributions in recent years began with what Republican leaders  regarded as an urgent problem: How would they pay for their presidential  nominating convention in Cleveland in two years?
• The talks ended with a bipartisan agreement between Senate Democrats, led by the  majority leader, Harry Reid of Nevada, and House Republicans, led by Speaker  John A. Boehner of Ohio, that would allow wealthy donors to begin giving more  than $1 million every election cycle to each party’s national committees.
• After successfully pushing  legislation in March to abolish public financing for party conventions, some  Republicans had become worried about how they would pay for their 2016  convention, scheduled to be held in Cleveland, in Mr. Boehner’s home state,  Ohio. Some feared that the party would have to scale back the convention, losing  clout and prestige to the big-money outside groups that are playing bigger roles  in campaigns.
• In effect, the new rules whittle away at the restrictions on so-called soft  money in the 2002 McCain-Feingold legislation, which prohibited parties from  raising large contributions under the guise of funding “party-building” and  get-out-the-vote efforts.
• All in all, the new accounts would vastly expand the amount that wealthy donors  could give to party committees. Under current rules, the most one individual  could donate to party committees in a given year totals about $97,200. Should  the new budget agreement be signed by President Obama, that amount would  skyrocket to $776,600, or $1.56 million over a two-year election cycle.

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• provisions that prohibit the federal government from requiring less salt in  school lunches and allow schools to obtain exemptions from whole-grain  requirements for pasta and tortillas.
• Such favors often have a long lineage. Lobbyists and lawmakers have, in many  cases, been working on them for months or years. Some of this year’s provisions  originated as free-standing bills, languished on their own and were then revived  in the spending package. Others block regulations that have been proposed,  adopted and sometimes upheld in court.
• The School Nutrition Association, representing cafeteria directors, welcomed the  bill’s language on sodium and whole grains. The lower sodium standards would  have been “extremely difficult to achieve,” and the government needs more  research before compelling schools to make such costly changes, said the  association, which receives financial support from food companies.
• A typically arcane provision of the bill provides relief to nonprofit Blue Cross  and Blue Shield plans, which have special tax breaks that were threatened by the  Affordable Care Act.
• Blue Cross is not mentioned by name in the relevant section of the 2015 spending  bill, titled “Modification of treatment of certain health organizations.” But  the deduction in question is available only to Blue Cross and Blue Shield plans,  which have been lobbying Congress for a clarification since the Affordable Care  Act was signed in 2010.

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