The Senate parliamentarian, Elizabeth MacDonough, has ruled that several key provisions in Senate Banking Committee Chair Tim Scott’s proposed budget bill for the GOP’s ‘big beautiful bill’ violate the rules of the budget reconciliation process. According to Budget Committee Ranking Member Jeff Merkley’s office, the ruling means that the provisions, including zeroing out funding for the Consumer Financial Protection Bureau (CFPB), slashing pay for some Federal Reserve employees, cutting Treasury’s Office of Financial Research, and dissolving the Public Company Accounting Oversight Board (PCAOB), are ineligible for inclusion in a reconciliation bill. These measures are considered outside the scope of the rules allowed for the budget process, which permits only changes to spending or revenues.
The ruling has dealt a significant blow to Scott and the Banking Committee Republicans, who must now revise their proposal. The Senate requires that any budget reconciliation bill focus solely on measures that change spending or revenue, rather than structural changes to government agencies or administrative bodies. Scott’s proposal had aimed to cut waste and save taxpayer dollars by making several cuts, but the Senate’s ruling forces him to revise the bill. The panel is required to find $1 billion in cuts over the next 0 years under a budget resolution agreed to by both chambers of Congress. However, the Senate’s strict rules mean that the total amount must come from budget items eligible under the reconciliation process.
Scott has stated that he remains committed to advancing legislation that reduces waste and duplication in the federal government. However, the Senate’s ruling has made it clear that not all provisions in his proposal will be allowed. The Banking Committee’s staff, including both Republicans and Democrats, met with MacDonough’s office earlier this week to discuss the proposal. The proposal, which went further than the House version, had already faced skepticism from some Republicans on whether it would comply with Senate rules. The ruling now makes it even more challenging for the GOP to pass its megabill, as they must now adjust or remove the larger cost-saving measures from their plan.
Some provisions in the proposal remain unaffected, including language that would cut all unobligated funds authorized for a green housing program under the Inflation Reduction Act, delay the implementation of a Dodd-Frank provision that allows the CFPB to collect demographic data from lenders, and sweep unused funds from the Securities and Exchange Commission’s Technology Reserve Fund. Scott has emphasized his commitment to cutting wasteful spending at the CFPB, stating that he and his colleagues will continue to work with the Senate parliamentarian on the committee’s provisions.
Meanwhile, the top Banking Committee Democrat, Sen. Elizabeth Warren of Massachusetts, has criticized the GOP’s proposals, calling them a ‘reckless, dangerous attack on consumers.’ She argues that the proposals would put the stability of the financial system at risk and allow financial institutions to exploit consumers. ‘We fought back, and we will keep fighting back against this ugly bill,’ Warren said. The Senate’s ruling has added to the political and procedural challenges facing the GOP’s megabill, as they must now revise their plan to comply with strict procedural rules and respond to the concerns raised by Democratic lawmakers.