The Congressional “Supercommittee,” was tasked by Congress to produce legislation to reduce the deficit by $1.2 trillion within the next ten years. The first deadline was November 23. On November 21, leadership of the bipartisan Special Joint Committee announced that it would not be able to reach an agreement on such a measure.
Credit unions have monitored the possibility that the credit union tax status might get in the mix of possible deficit reduction measures. From the beginning, the Credit Union National Association (CUNA) assessed this threat as “low, but not zero.” The threat was taken very seriously because of the unprecedented nature of the process by which Congress was attempting to deal with deficit reduction.
The Supercommittee had unprecedented ability to report legislation to both chambers of Congress for an up-or-down vote. If members had reported legislation that included language eliminating or altering the tax status, it would have been impossible to remove it, short of defeating the entire agreement.
In the last four months, CUNA engaged each member of the Supercommittee, their staff and other key policymakers on Capitol Hill and within the Administration regarding the credit union tax status. (No members from Missouri served on the Supercommittee. )
While the Supercommittee has failed, Congress still faces a very significant deficit problem. Efforts to address this will continue and may involve renewed calls for the elimination of all tax expenditures in the future. Bankers will continue to lobby aggressively for the taxation of credit unions. Preserving the credit union tax status is a top priority and CUNA and the Missouri Credit Union Associaition will continue to monitor the threat to the tax status that could develop should Congress engage in comprehensive tax reform efforts in 2012 or 2013.