A member of Congress is trying to rally support on Capitol Hill for fraternal benefit societies.[@@]

Sen. Rick Santorum, R-Pa., delivered a statement on the Senate floor last week that criticizes a report developed by the staff of the Joint Committee on Taxation. The report, released in January, includes a section that suggests that the government could increase revenue by revoking the tax-exempt status of fraternal benefit societies.

Santorum noted in his statement that the federal government has exempted fraternals from taxes since 1894.

“These organizations, some of which have existed since the Civil War, are a major force for good in America today,” Santorum said, according to a version of the statement printed in the Congressional Record.

Officials at the U.S. Treasury Department have been talking about revoking fraternals’ exemption for decades, but Congress has rejected those suggestions, Santorum said.

“If anything,” Santorum said, “the rationale for encouraging fraternal benefit societies is greater today than it has been at any other time in our history. Fraternal societies have shown us that the private sector can and will step in to make a difference.”

In 2004, fraternal benefit societies accounted for just 1.5% of the insurance market, but they incurred about $360 million in fraternal benefit and charitable expenditures, and their members devoted more than $1.2 billion worth of time to community and social services, Santorum said.

Although revoking fraternals’ tax exemption might raise $500 million in tax revenue over 10 years, “this pales by comparison to the $4 billion that fraternal societies are likely to put back into their communities over the same time frame in direct fraternal and charitable expenditures,” Santorum argued.