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Washington
Presidents commission releases deficit-reduction draft plan (11/11/2010)
WASHINGTON (11/12/10)--While the National Commission on Fiscal Responsibility and Reform's just-released draft report on deficit reduction options does not mention credit unions by name, tax expenditures are on the panel's target list. The commission is President Obama's bipartisan advisory group charged with coming up with ways to cut the country's debt. Under the very broad brush strokes of the commission's proposals, the panel could eliminate the credit union tax exemption without taking into consideration whether such a change in policy could have dire consequences. As Credit Union National Association President/CEO Bill Cheney noted Wednesday, underscoring CUNA's adamant and unwavering support of credit unions' tax status, "If taxed, could credit unions as cooperative, not-for-profit financial institutions continue to effectively serve their members? Our answer: Absolutely not!" However, Cheney noted, the commission draft has an uphill battle to see daylight. It requires a super majority of 14 if the commission's 18 members to be officially "recommended," and some observers say that will be tough to get. Even if that battle is won, the proposals would still face a full vetting by the Congress and would require congressional passage and the President's signature. As Cheney added, "This is really the beginning of what could be a long process and these recommendations by their own wide scope face a tough road ahead. CUNA will continue to work with the entire debt reduction commission, the Obama administration and the U.S. Congress to help all comprehend the importance of the tax exemption on the long-term well-being of the nation's credit unions and, by extension, the 92 million consumers they serve." The commission draft report outlines three tax options: * "The Zero Plan," which mentions an option to "eliminate all $1.1 trillion of tax expenditures." It continues, "Add back in any desired tax expenditures, and pay for them by increasing one or all of the rates from their zero-expenditure low." * "Wyden-Gregg Style Reform" lists the option to "eliminate and modify several business tax expenditures..." Four tax expenditures are listed, but not credit unions. * "Tax Reform Trigger" calls on Capitol Hill's tax-writing committees to "develop and enact comprehensive tax reform by end of 2012" and "put in place an across-the-board 'haircut' for itemized deductions, employer health exclusion, and general business credits that would take effect in 2013 if reform is not yet enacted."


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