A contingent of bank executives belonging to the New Jersey League of Community Bankers paid a visit on Jan. 10 to the Journal Square offices of Rep. Bob Menendez (D-13th Dist.), giving him a petition with 17,000 signatures in an effort to win his support for a tax incentive savings plan for small savers.
The bank executives informed Menendez about their league’s support for a tax exemption for the first $1,000 of interest on savings accounts. The signatures were collected from all of New Jersey’s 13 congressional districts as part of the campaign.
Menendez, who serves as chairman of the Democratic Caucus and as a member of the International Relations, Transportation and Information committees in the House of Representatives, said he agreed with the concept. He said he wished the Bush Administration had opted for this plan to provide people with an incentive for savings, rather than offering huge tax cuts that mostly benefit the wealthy.
Menendez, however, cautioned the bankers, saying that the huge federal deficit incurred under the Bush Administration forces him to take a closer look at even positive items such as this that might reduce the ability of the federal government to meet its financial obligations.
“We are not going to be leaving Iraq any time soon, and that war is costing us $1 billion a day,” he said.
In order to support the bankers’ request, Menendez said he would need assurances from the federal General Accounting Office that the effort would not greatly hurt the efforts to get federal spending under control.
In urging support for the proposal, New Jersey League President Sam Damiano said, “Savings provide the capital that keeps our economy running. Today’s low level of consumer savings impedes economic growth.”
Damiano said the tax incentives could raise the level of savings, increase the wealth of savers, and generate economic activity that will lead to growth in employment. Savings, he noted, are very important to community banks.
Community banks in touch
Menendez agreed that the proposal had merit, and noted that community banks were particularly in touch with people and communities, and are often at the heart of a community’s economy.
Community banks in nearly every voting district have put ballot boxes, petitions and posters in their lobbies in order to garner the signatures.
Menendez assured the bankers that he would seek a report on the impact, and that he would throw his support behind the initiative if the General Accounting Office shows that the impact would be minimal.
“I agree that this is a more positive way to approach helping people than the tax cuts the president pushed through Congress,” he said.
Contact Al Sullivan at asullivan@hudsonreporter.com