So Washington (and credit unions) survived the debt ceiling and budget cutting crisis relatively unscathed.

That is unless you count a few minor pieces of data, such as the approval ratings of President Obama and Congress.

At times, both Democrats and Republicans demonstrated all the maturity of children in the sandbox. It was reminiscent of the occasional behavior of the leaders of two trade associations, which shall remain nameless, when they are trying to show off their machismo.

Ironically, though CUNA and NAFCU sometimes take shots at each other, they aren't extraordinarily aggressive when they lobby. They make their case effectively, but they aren't known for their hardball tactics the way some trade groups such as the National Rifle Association are.

Perhaps both national trade CEOs should cut an ad showing them holding a tax-exemption certificate and saying, “Congress is going to pry this out of my cold, dead hands.”

Although it is good for credit unions to be on alert, given the GOP's squeamishness on anything related to taxes, the House-Senate committee aimed at cutting spending probably won't tinker with taxes.

The credit union tax exemption is more likely to be targeted when Congress and the White House tackle comprehensive tax reform in 2013.

That's when tax loopholes and subsidies will be evaluated. And one of the goals may be to broaden the base of taxpayers so they can lower the rates.

During that fight, we can look forward to a battle of the special interests. The best book on the last tax reform effort (1986) was “Showdown at Gucci Gulch,” a reference to shoes favored by many lobbyists.

And while credit unions all think they are doing great work, in the eyes of many lawmakers they are just another special interest pleading its case.

My old economics professor Murray Weidenbaum (who was President Reagan's top economic adviser during his first term) used to joke that when came to budget cutting, Washington has a “but” problem.

Weidenbaum, a professor at Washington University in St. Louis, used to say that every time he met with a representative of an organization during budget debates, the person started the conversation by saying “I agree with you that we need to control government spending and/or get rid of certain tax loopholes.”

The second sentence, he recalled, invariably began with “But my program is valuable and does a wonderful thing to the nation or my community, and it needs to be saved.”

To some observers, the debt ceiling debate showed that the nation faces “unprecedented” political gridlock and the United States is ungovernable.

Nonsense.

We've heard that argument before. During the waning days of President Carter's administration, White House Counsel Lloyd Cutler (who was one of the premier members of the Washington establishment of his generation) lamented the problems of getting things done in light of the structure of the nation's political system.

Remember, Cutler wrote at a time when the White House and both houses of Congress were all controlled by Democrats.

As it turned out, the problem was President Carter's inability to get things done. When voters turned Carter out that November and replaced him with an underrated former actor and governor of California, suddenly there was a sea change in Washington.

Not only was Reagan able to get things done (and he always had at least one chamber controlled by the other party), but he found a way to be forceful and decisive while still getting along with his opponents. Reagan and House Speaker Thomas P. O'Neill disagreed vehemently on policy but genuinely liked each other and often got together after hours to swap stories while drinking adult beverages.

Political differences will always be with us. The key to bridging them is strong leadership and having elected officials who can work with, rather than talk past each other.

Instant Insights /

Marx on Capitol: Tax Showdown Will Not Come Until 2013

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