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Washington
CUNA on CNN Money Debt debate unsettling markets
WASHINGTON (7/29/11)--Credit Union National Association (CUNA) Chief Economist Bill Hampel told CNNMoney.com that the Congressional rhetoric surrounding the debt ceiling debate, which has reached a fever pitch in recent days, “is creating high level of uncertainty among market participants," adding that financial markets will "remain jittery until a deal is done." A House vote on Rep. John Boehner’s (R-Ohio) version of cap lift legislation was slated for last night, but was ultimately postponed late in the evening. Sen. Harry Reid (D-Nev.) has said that the House bill would not pass the Democrat-controlled Senate. The Congressional Budget Office reported that Boehner’s proposal would increase the debt cap by $2.5 trillion and reduce the deficit by as much as $1.1 trillion through a series of steps to be taken between 2012 and 2021. President Obama and federal lawmakers have until early August to increase the government's statutory borrowing authority or risk defaulting on the nation's debt. Debt cap negotiations "always go down to the last minute and get resolved. But there is a nagging doubt this time around," Hampel said. The Dow Jones Industrial Average dropped for the fifth straight day on Thursday, falling 62 points to a total of around 12440. CUNA continues to closely monitor debt cap debate developments, with a close eye on any possible changes that could threaten the federal credit union tax status. CUNA Senior Vice President of Legislative Affairs John Magill repeated that there has been no indication that the credit union exemption is being considered in the debt ceiling debate. "Preserving the federal credit union tax status remains a top CUNA priority and the volatility surrounding the debt ceiling negotiations makes it prudent for CUNA to remain on the alert. "However, neither the Democrat's preferred debt package nor the Republican's plan takes aim at credit unions at this point," Magill said.


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