WASHINGTON (3/13/13)--As expected, the credit union tax status is not mentioned nor targeted in a U.S. House Republican budget released on Tuesday. Other items of interest to credit unions, however, including Fannie Mae and Freddie Mac and financial regulations, are addressed.
The Credit Union National Association's work to educate lawmakers and the public about the public policy value of the credit union tax status is a top priority.
The Republican budget plan would:
- Wind down Fannie Mae and Freddie Mac and decrease the government's role in the mortgage sector;
- Require the use of fair-value scoring for federal housing-credit programs;
- Revisit elements of financial regulations, and the Dodd-Frank Wall Street Reform Act; and
- Require that the costs of legislation related to housing be calculated on a fair-value basis and authorize the use of fair-value costs estimates for other credit programs.
The plan also instructs eight congressional committees to each produce their own legislation that would reduce the federal deficit by at least $1 billion over ten years.
Overall, the Republican plan would reduce spending by $4.6 trillion by 2023 through healthcare changes, welfare reforms, closing loopholes, consolidating some tax forms and making other changes.
A Senate Democrat budget is expected to be released on Wednesday. While that full plan was not revealed as of late Tuesday, several outlets reported basic details of the plan. The Democratic budget plan would create $975 billion in new revenues by reducing tax expenditures, cut domestic spending by $493 billion, reduce defense spending by $240 billion, and add $100 billion in new infrastructure spending. These results would be achieved over a ten-year span.
Both budgets are being released to the backdrop of budget and tax discussions. A long-term budget has not been passed by Congress since 2009, and the government has been funded on short-term bills since that time.
CUNA Executive Vice President of Government Affairs John Magill this week said "absolutely everything in the tax code could fall under the microscope of those policy makers charged with developing tax reform. No legislator CUNA has spoken with has suggested that the credit union tax status is currently on the table as a tax reform or spending issue. However, we know that an educated Congress, and an educated public, are the credit union movement's best tools to work to keep it that way."
Magill has also encouraged credit unions to continue their conversations with lawmakers and to engage their members as well by using a Tax Status Advocacy Toolkit provided by CUNA and the leagues.