At press time, the fate of the credit union tax exemption wasstill up in the air.

Members of the House-Senate committee trying to devise a plan tocut the deficit have been discussing an array of proposals,including some that would reduce tax expenditures.

Credit union lobbyists say they haven’t seen the credit uniontax exemption on any list but warned that the process is still influx and something of a moving target.

“We continue to sleep with one eye open to ensure that credit unions aren’t targeted. We haven’t heard that we are anylist that is being considered by the committee,” said CUNAExecutive Vice President John Magill.

NAFCU Executive Vice President Dan Berger said, “I have not seenthat credit unions are on any [target] list.”

Both trade associations have met with members and staff of the12-member committee to discuss the credit union tax exemption. Allof the committee members have received contributions from either orboth trade associations.

Some of the Republicans on the 12-membercommittee offered a package that includes an array of tax increasesand spending cuts, including the closing of some tax loopholes.

According to several press reports, the tax expenditures on thechopping block include items that could generate considerablerevenue for the government, such as energy-related loopholes andreal estate investment trusts.

The Treasury Department in 2005 estimated the annual revenuefrom eliminating credit unions’ tax exemption would beapproximately $1.39 billion.

The panel, made up of six members of the Senate and six membersof the House, has until Nov. 23 to deliver its report to Congress.Lawmakers in each chamber have until Dec. 23 to hold an up or downvote on the package presented by the committee.

The Obama administration has not been active in the committee’snegotiations, and it wasn’t especially keen on the creation of thepanel, which was part of last summer’s agreement leading to theraising of the debt ceiling.

The administration hasn’t taken a position on whether the creditunion tax exemption should be continued.

In the summer of 2010, an outside advisory board appointed byObama to recommend changes in the tax system concluded that “unlikeother financial institutions like banks and thrifts, credit unionsdo not pay corporate taxes on their income. Eliminating thisexemption would raise revenue and level the playing field but wouldclearly raise taxes on credit unions."

The last time there was a major tax overhaul in 1986, the creditunion tax exemption was one of the items that was targeted butsurvived.

While the tax exemption is important to credit unions, theamount of revenue that eliminating it would raise wouldn’t makemuch of a dent in the federal deficit.