Deficit One Reason Mica Isn't Waiting On Congress

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There is no bill in Congress to tax credit unions, let alone a single member of Congress who has come out publicly in favor of repealing the credit union tax exemption. But Dan Mica doesn't want to wait until a bill is introduced in Congress to mobilize the credit union faithful.

That's because once a bill is introduced the parameters of the tax debate changes and the bankers get the upper hand, according to the CUNA president and former member of Congress.

"Once a bill gets introduced then you have a Paul Kanjorski (congressional credit union champion) come up to you and say, 'What are you guys willing to give up for this?'" said Mica during an interview with The Credit Union Journal.

"My efforts through the years have been to gin up the movement, get them up here and just beat on these guys (Congress) through the elections so when they come back here for next year-which is a prime potential tax year-each member of Congress says, 'Don't do this, this is crazy,' We need to get more and more people saying that so you don't get in the position where you're negotiating what's in or out of a bill," said Mica.

That's why CUNA and its state league affiliates are quietly going about collecting commitments as it can from as many as the 535 members of Congress-435 in the House and 100 in the Senate-to pledge their support of the credit union tax exemption. So far, the campaign for the pledge has been enormously successful, with as many as 200 members expressing some level of commitment, according to Mica.

Different Levels Of Commitment

Of course, there are different levels of commitment, he acknowledged. Some, dozens in fact, have expressed unequivocal support for the tax exemption, even going so far as to put it in writing.

From state to state, credit union leagues are doing a remarkable job of getting lawmakers to take the pledge. In Michigan, both senators and all 14 sitting House members, as well as the likely winner for the state's 15th House seat, have all signed the pledge supporting the tax exemption. More than half the Texas delegation's 32 House members, including powerful House Majority Leader Tom DeLay, have taken the pledge. The Alabama CU League said it has obtained the pledge from six of its federal lawmakers, including Sen. Richard Shelby, chairman of the important Senate Banking Committee.

Others have offered qualified support, saying they support the tax exemption and credit unions, but are reluctant to put it in writing or even make a definitive statement.

Others still, have offered their support, but refuse to paint themselves into a corner, lest circumstances change drastically.

And some of those circumstances are daunting, indeed, noted Mica. Like the mushrooming federal deficit, which grew to a record $415 billion in the recently completed fiscal year. Eventually, this is going to require some kind of resolution that is likely to be broad-based. "What the bankers are angling for is somewhere as tax needs build up, that's when we get thrown into the pot. Then, what you get is, 'I love you guys and I'm with you, but we've got a billion-dollar deficit out there and we have to raise taxes on everyone...'"

Different Levels Of Commitment

To Mica, who came on to the credit union scene in 1996 just as the landmark battle of credit union membership was coming to a climax, the campaign for HR 1151, the CU Membership Access Act, should serve as a lesson to the entire credit union movement. Despite the success in getting the bill passed, after the Supreme Court ruled against credit unions it required a concerted effort to prevent credit unions from losing ground on membership, and required that credit unions give up a lot, like business lending powers and acceptance of new minimum capital requirements, just to stay even. "Never, ever again do we want to be in that position," he said.

"We want to be in a position of strength, not a mile-wide and an inch deep, but a mile wide and a mile deep," explained Mica. "We're about a mile wide now, certainly more than an inch deep, but we're certainly not a mile deep, yet."

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