ARLINGTON, Va.–For credit union advocates attempting to stay on top of the daily developments in the trillions of dollars in proposed spending bills being debated in Congress, it’s become a daily grind of repeated phone calls to Capitol Hill to get a sense of where things stand.
Credit unions are not alone, of course, in trying to both read the tea leaves and influence what’s being brewed as the Biden Administration and congressional Democrats attempt to find common ground and push though several enormous spending packages that, as of now, appear to contain provisions to which credit unions strongly object.
“Obviously, there are different parts of this package in the House than there were in the committee process,” said NAFCU Vice President of Legislative Affairs Brad Thaler. “That’s the Christmas tree and not knowing what ultimately will be on it in the end. What could be in play may not even be introduced or out there yet, at least the specifics. They are still working on the topline numbers and the size of the package. Once they determine that it will go long way in determining what makes it in and how they craft it. You have to decide how big the pie is going to be before you decide what goes in it.”
Working the Phones
Thaler said he and NAFCU’s advocacy team are working the phones and talking to congressional offices as they seek to take a temperature that changes daily, noting the “package potentially encompasses things from a lot of different areas.
It’s tricky right now because there is not a lot that is concrete out there. A lot being discussed behind the scenes,” said Thaler.
One of the biggest concerns to not just the credit union trade groups but other financial services groups and everyday Americans is a proposal that financial institutions report all inflows/outflows in member accounts to the IRS. As CUToday.info has reported, the proposal was not included when it was passed out of the House Ways & Means Committee but House Speaker Nancy Pelosi (D-CA) has since said it will be in whatever spending package finally goes to a vote, indicating it is a high priority of the Biden Administration.
‘Politically Challenging’
Thaler said the IRS proposal is “politically challenging,” which is why Ways & Means members did not vote on it.
“There is uncertainty if it will make it in or what it will look like in the final package,” said Thaler. “It’s being dealt with at the leadership level. We’ve seen this is an issue that credit unions and credit union members are concerned about. There are new reporting requirements. There are concerns by members about their privacy. This is a whole new concept of looking at account flows rather than income. This is a whole new type of information going to the IRS and it’s going to lead to a lot of questions, particularly from members. You could get a statement from your credit union that you had $75,000 in account flows and just $40,000 in income, and there would be a lot of questions about that. This is potentially burdensome on credit unions and leads to confusion on consumers. And the IRS already has access to any number of pieces of information. The true benefit of this information is really questionable.”
NAFCU has also released a new advocacy video encouraging consumers to call on Congress to reject the proposed IRS reporting requirement.
Closing the Gap?
The Biden Administration is pushing the IRS proposal as a way to close the tax gap without raising taxes as it seeks to offset the trillions of dollars in proposed spending.
“Part of our argument is that it is very uncertain this will generate more revenue to close the tax gap to the degree they are saying,” added Thaler.
The fate of the IRS reporting proposal remains very much up in the air as congressional Democrats and the administration attempt to rally support for their spending plans.
Thaler said he expects it won’t be until December before a final spending package is seen, and that comes with the caveat, “if we see a package.”