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The Senate parliamentarian has been hearing arguments over whether certain provisions can stay in the One Big Beautiful Bill Act, and the first set of decisions preserves several federal banking agencies.
The ruling means that these provisions would only be able to return to the bill in one of two ways: either with a 60-vote waiver of the Byrd Rule, or with the chair of the Senate ignoring the parliamentarian and allowing the measures to stay. Senate Majority Leader John Thune (R-SD) has ruled out the latter, but now we’ll get a test of whether he is committed to abiding by this.
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This decision has once again preserved the Consumer Financial Protection Bureau, which has survived several near-death experiences this year.
The Senate Banking Committee attempted to essentially zero out the CFPB by reducing the cap for funds that the Federal Reserve can transfer to the agency to zero percent. That’s a full defunding, and it doesn’t directly impact the overall budget, since it’s a reduction in funds coming from off-budget, via the Federal Reserve. The parliamentarian ruled that this did not have a primary budgetary purpose but was a policy move by Republicans to get rid of a disfavored agency. This isn’t allowed in budget reconciliation.
The same ruling was made for the zeroing out of the budget of the Office of Financial Research, which is funded through an assessment on large banks. Under the bill, that assessment money would get swept into the general fund; the parliamentarian saw that as a policy maneuver to kill OFR, a critical agency for market operations as well as for seeing over the horizon on the stability of the financial system.
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The Banking Committee also tried to eliminate the Public Company Accounting Oversight Board, which was inaugurated after Enron and other disasters to provide oversight of accounting firms, and fold it into the Securities and Exchange Commission. That also is policy.
Congress can of course move to destroy the agencies it created if it wants, but only through regular order, not the special process used for budget reconciliation, which gets around the filibuster. So these measures are out of the bill.
“As much as Senate Republicans would prefer to throw out the rule book and advance their families lose and billionaires win agenda, there are rules that must be followed and Democrats are making sure those rules are enforced,” Sen. Jeff Merkley (D-OR), ranking Democrat on the Senate Budget Committee, said in a statement.
A couple of other provisions were struck last night. The Banking Committee attempted to reduce pay of Federal Reserve staff to cut $1.4 billion. The Environment and Public Works Committee added a provision that appeared to repeal long-standing emissions standards for vehicles starting in 2027; that was also eliminated. And the Armed Services Committee had a trigger that would reduce appropriations to the Department of Defense if they were late in submitting their spending plans. All of these are gone as well.
“We will continue examining every provision in this Great Betrayal of a bill and will scrutinize it to the furthest extent,” Merkley said.
We want to hear from you. If you’re a Hill staffer, policymaker, or subject-matter expert with something to say about the Big Beautiful Bill, or if there’s something in the legislation you want us to report about, write us at info(at)prospect.org.
