Congressional Republicans may attempt to use a budget shortcut to enact comprehensive tax reform, leaving credit unions to mount a vigorous defense of their tax exemption early this Congress, credit union trade group officials are warning.
“We certainly have a target on our backs from the banking community,” Rich Meade, chief of staff/COO at CUNA, said during a conference call with credit unions and reporters. “We’re somewhat vulnerable.”
“Anytime you talk about tax reform, everything may be on the table,” said Brad Thaler, NAFCU’s vice president for legislative affairs.
And while members of Congress may not initially propose eliminating the credit union tax exemption, bankers are certain to push that idea into the debate, Meade said.
Meade said Republicans may try to use the budget reconciliation process to pass tax reform legislation. Reconciliation is a process by which Congress can enact certain budget-related legislation using limited debate and a prohibition on a filibuster in the Senate. That means a guaranteed vote on the proposal in each house of Congress.
However, to do that, Congress would have to agree upon a budget resolution that would establish budget targets. In recent years, the House and Senate have had problems accomplishing that, although Congress did pass a budget resolution for FY16.
Meade is the former chief of staff of the House Budget Committee and CUNA President/CEO Jim Nussle served as chairman of that committee during his service in Congress.
During the conference call, Nussle credited Meade with shepherding budget reconciliation through Congress when he was on the committee staff.
When asked about the prospects of attempting to pass tax reform legislation through reconciliation, Nussle added, “We know it’s possible.”
That could be a cause for concern, Thaler said.
“Anytime you have an up or down vote, it’s a touchy scenario,” Thaler said.
He added that credit unions have spent several years ensuring that leaders of Congress’s tax-writing committees are informed about the benefits credit unions bring to their communities.
“We’re always vigilant,” he said.
