Attempts to defund the Consumer Financial Protection Bureau within President Donald Trump’s One Big, Beautiful Bill run afoul of the Byrd Rule, which limits what can be included in reconciliation legislation.
Senate parliamentarian Elizabeth MacDonough ruled Thursday that a measure to defund the CFPB falls outside the limits of reconciliation, a legislative process that allows the Senate to pass bills with only a simple majority.
Measures to toss the Public Company Accounting Oversight Board and the Office of Financial Research, as well as a measure to reduce Federal Reserve staff salaries, also fall outside the limits, MacDonough said.
Sen. Jeff Merkley, D-OR, who serves on the Senate Banking Committee, said measures must either be “stripped from the bill or altered to comply with the rules of reconciliation.” Should they remain in the bill, they will be subject to a 60-vote threshold.
“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,” Merkley said in a prepared statement. “We will continue examining every provision in this Great Betrayal of a bill and will scrutinize it to the furthest extent.”
MacDonough has zeroed in on a variety of other provisions of the bill, including one that would dispose of the U.S. Postal Service’s electric vehicles and one that would have paid $85 million to transfer a space shuttle from the Smithsonian Air & Space Museum to a nonprofit in Houston.
The Senate parliamentarian is the official adviser to the U.S. Senate on the interpretation of parliamentary procedure. MacDonough, appointed by then-Senate Majority Leader Harry Reid, D-NV, in 2012, is nonpartisan, and caught Democratic ire in 2021 for nixing a provision in then-President Joe Biden’s American Rescue Plan that would have increased the federal minimum wage to $15. Rep. Ilhan Omar, D-MN, called for MacDonough’s replacement at the time.
Later that year, MacDonough also rejected Democrats’ efforts within their spending bill to give legal status to millions of individuals who’d come to the U.S. illegally as children.
Senate Banking Committee Chair Tim Scott, R-SC, said Friday he “remain[s] committed to advancing legislation that cuts waste and duplication in our federal government and saves taxpayer dollars,” according to an emailed statement.
“As it stands now, the Banking Committee’s reconciliation provisions will delay the implementation of Section 1071 of Dodd-Frank, which reduces CFPB spending and protects the privacy and data of small business owners; rescind unused funds earmarked for green initiatives to give [the Department of Housing and Urban Development] discretion in funding critical housing programs; and save taxpayer dollars by eliminating an unnecessary reserve fund at the SEC,” said Scott, who has for years pushed back against the CFPB.
“My colleagues and I remain committed to cutting wasteful spending at the CFPB and will continue working with the Senate parliamentarian on the Committee's provisions,” he said.
Efforts to undermine or entirely eliminate the CFPB have marked the agency in 2025.
The CFPB did not immediately respond to a request for comment Monday.
