WASHINGTON—What was once an annual threat to credit unions—what are known as “pay-fors” in the federal budget—have increasingly become an issue for CUs in Washington multiple times per year.
Case in point: Discussions surrounding the so-called “Reconciliation 3.0,” a reference to the latest effort to pass a bill funding the federal government. As was the case with Reconciliation 1.0 and 2.0, how to “pay for” the increased spending with other spending cuts is again coming to the forefront. And as has been the case with those earlier funding proposals, the credit union tax exemption is always among the “pay-for” proposals.
For now, there has been no official figure released by Republicans around what the cost of Reconciliation 3.0 will be. But the package reportedly includes a $350 billion boost in defense spending, among other provisions.
‘Always a Concern’
Jason Stverak, chief advocacy officer with the Defense Credit Union Council (DCUC), said Republicans are going to need to find spending offsets to make the package “budget neutral.”
“That is always is a concern for us as it has been since the start of this Congress, when the credit union tax exemption was included as part of the Republican’s 55-page document on where they could find money to pay for reconciliation,” said Stverak. “We’re going to once again remind Congress that the credit union tax status is something that’s been earned, and that eliminating it will do infinitely more damage than the few billions of dollars that they could find to pay for increased spending here in Washington, D.C.
“We will be reaching out to members of the committee and leadership to once again reiterate our opposition,” Stverak added. “We hope they will once again listen to us on this issue and not consider even touching the credit union tax status.”
