Jan. 4, 2012 – President Obama this week signed the fiscal cliff package and this year’s defense authorization measure, which includes revisions to the Military Lending Act and affects some credit union lending to military servicemembers.
The fiscal cliff agreement, H.R. 8, was cleared by the Senate and House on Tuesday to make permanent some middle-class tax cuts from the Bush administration but allowing the payroll tax holiday to expire. It also preserves mortgage debt relief provisions in the tax code that allow families to exclude mortgage debt relief of up to $2 million from taxable income.
The package has other tax items in it but delays some $500 billion in automatic across-the-board spending cuts for two months.
NAFCU is closely monitoring discussion of remaining fiscal cliff issues and activities leading up to another vote to raise the federal debt ceiling. While the government technically exceeded its borrowing capacity Dec. 31, Treasury is taking steps to maintain the status quo through the end of February. Meanwhile, lawmakers are already talking about broad corporate tax reform, and NAFCU is working to ensure the preservation of credit unions’ tax-exempt status. (See related story.)
Also signed this week was H.R. 4310, which authorizes spending for fiscal 2013 defense activities. NAFCU was successful in lobbying against inclusion of provisions in the measure that would have expanded Military Lending Act rules, set by the Defense Department, to non-predatory loan products. The provisions were removed during a House-Senate conference.