Newsroom

July 27, 2011 - The formation of a new committee tasked with identifying certain tax expenditures for elimination was the focus of further discussion Tuesday as both political parties in Congress continued talks about a possible debt deal.

NAFCU lobbyists believe it is unlikely that the Republican's preferred debt plan, a proposal by House Speaker John Boehner, R-Ohio, or the Democrat's preferred debt package, a plan offered by Sen. Majority Leader Harry Reid, D-Nev., will receive enough support to pass both the House and the Senate as currently written.

A more likely scenario is some sort of compromise between the two, and discussions around such a solution have already taken place, NAFCU has learned. Such a compromise bill would likely include the call for a new 12-member, bipartisan committee (an element of both the Boehner and Reid plans) to identify future savings as well as $1.2 trillion in discretionary spending cuts over the next decade (also a component of both plans).

While identifying certain tax expenditures for elimination would be one of the tasks of the committee, thus far neither proposal has called for the credit union tax exemption to be examined. Rest assured, NAFCU will vigorously oppose any proposal to eliminate credit unions' tax-exempt status.

At a Senate Finance Committee hearing Tuesday on deficit reduction, Ranking Member Orrin Hatch, R-Utah, said it is wrong to cherry pick which expenditures to eliminate based on political polling and what sounds good. Instead, a more thorough, across-the-board approach is needed to properly reform the nation's tax code, he argued.

Sen. Ron Wyden, D-Ore., also touted the need for real tax reform, and said the nation should examine changes to the corporate tax rate in order to keep the U.S. competitive. All the witnesses agreed this needed to happen.

The preservation of credit unions' tax exempt status remains a top NAFCU focus as discussion over the nation's debt battle continues. NAFCU will continue to monitor the situation closely.