As President Trump’s tax reform measure, “One Big Beautiful Bill,” makes its way through Congress and several markups, Senate Parliamentarian Elizabeth MacDonough has ruled that several key pieces of the bill violated the decades-old Senate rule, the Byrd Rule, which prohibits provisions considered “extraneous” to the federal budget.
Among the changes by Senate Parliamentarian MacDonough, striking a provision that would have placed a funding cap on the Consumer Financial Protection Bureau (CFPB), a move that would have cut approximately $6.4 billion from the Bureau, and reduced its funding to zero percent, thus eliminating the agency.
The Senate Parliamentarian and their staff provide nonpartisan advice to the presiding officer, chamber and committee leaders, individual senators, and staff about Senate rules, precedents, and statutes as they pertain to Senate proceedings. Senate Parliamentarian MacDonough has served in the position since 2012, under the leadership of both Democrats and Republicans.
The Senate Banking Committee attempted to zero out the CFPB by reducing the cap for funds that the Federal Reserve can transfer to the agency to 0%.
By invoking the Byrd Rule, Parliamentarian MacDonough noted that this move did not have a primary budgetary purpose, but was a policy move by Republicans to eliminate a disfavored agency, an action not allowed in budget reconciliation.
Introduced in 1985, the Byrd Rule, named after Sen. Robert C. Byrd of West Virginia, prohibits “extraneous” provisions from being tacked onto reconciliation bills, which are fast-tracked budget packages that allow legislation to pass with a simple majority, bypassing the 60-vote filibuster threshold. The Byrd Rule states that every line of a reconciliation package must have a direct and substantive impact on federal spending or revenues.
“Senate Republicans just tried to eliminate the Consumer Financial Protection Bureau—and Senate Democrats stopped them,” said Sen. Chuck Schumer in a post on social media platform X. “Senate Democrats stood up for common sense and for the millions of Americans who rely on strong consumer protections. We’re not done—and we’ll keep fighting this ‘Big, Beautiful Betrayal’ like hell to protect American families, not billionaires and big corporations. Let’s be clear: the CFPB has returned over $21 billion to American consumers by holding big banks and predatory lenders accountable. Republicans’ attempt to gut it was nothing more than a gift to the wealthy and well-connected, at the expense of working families.”
Section 30001 of “One Big Beautiful Bill” changed the ability of the CFPB to fund itself by receiving from the Federal Reserve an amount of up to 12% of the Fed’s inflation adjusted profits in 2009 from 12% to 0%. This would not have impacted the Bureau’s existing ability to request funds from Congress, and would have saved an estimated $6.4 billion.
“I remain committed to advancing legislation that cuts waste and duplication in our federal government and saves taxpayer dollars,” added Senate Banking Committee Chairman Tim Scott. “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 HUD discretion in funding critical housing programs; and save taxpayer dollars by eliminating an unnecessary reserve fund at the SEC. 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.”
The U.S. House of Representatives narrowly passed One Big Beautiful Bill Act by a vote of 215-214 before moving onto the Senate.
“The Senate Parliamentarian advised that certain provisions in the Republicans’ One Big, Beautiful Betrayal will be subject to the Byrd Rule–ultimately meaning they will need to be stripped from the bill to ensure it complies with the rules of reconciliation,” said Sen. Jeff Merkley, the ranking Democrat on the Senate Budget Committee.
According to TheHill, Senate Republicans will need to remove the provisions from the bill, or otherwise would have to muster 60 voters to overcome a point of order against the bill. Senate Republicans hold a 53-47 seat majority.
“Democrats fought back, and we will keep fighting back against this ugly bill,” said Sen. Elizabeth Warren, the top Democrat on the Banking Committee, who helped establish the CFPB before she was elected to Congress.
