Elimination of CFPB and Other Financial Agencies Tossed Out of Budget Bill

[justaprogressive]

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.

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.

https://prospect.org/politics/2025-06-20-elimination-cfpb-financial-agencies-tossed-senate-byrd-rule/

[Attilatheblond]

1. Bet Senator Warren is breathing easier today.

[LetMyPeopleVote]

2. Overlapping problems create uncertainty over the future of the Republican megabill

Donald Trump has said the GOP is united behind the inaptly named One Big Beautiful Bill Act. The truth for Republicans isn't nearly that simple.

Overlapping problems create uncertainty over the future of the Republican megabill www.msnbc.com/rachel-maddo... via @msnbc

— Slapshot1955 (@slapshot19551.bsky.social) 2025-06-26T20:41:04.730Z

Link to tweet

https://www.msnbc.com/rachel-maddow-show/maddowblog/overlapping-problems-create-uncertainty-future-republican-megabill-rcna214977

As things stand, Republicans are basically confronting five problems:

1. GOP numbers aren’t adding up: The Congressional Budget Office concluded last week that the House version of the package would add $3.4 trillion to the national debt, and this week, the nonpartisan Joint Committee on Taxation found that proposed Senate changes would add an additional $400 billion to the price tag.

2. The Byrd bath: Because Republicans are relying on the budget reconciliation process, which prevents Democrats from derailing the bill with a filibuster, GOP lawmakers are having to subject the legislation to a complex process — which includes having the Senate parliamentarian remove provisions that run afoul of certain budgetary rules. This process is known as the “Byrd bath,” named after the late Democratic Sen. Bob Byrd of West Virginia.

In recent days, several key measures have already been stricken from the bill, including elements the party was counting on to help GOP numbers add up. This has caused a behind-the-scenes scramble that has not yet been resolved.

On Thursday, the developments for the party managed to get even worse. NBC News reported, "Republicans suffered a blow Thursday after the Senate referee ruled that a series of health care cuts and savings in their sweeping domestic policy bill are ineligible for the party-line path they're using to get around the chamber's 60-vote threshold."

The result leaves GOP leaders with limited choices: They can (a) look for other solutions; (b) try to tweak the legislation and ask the parliamentarian to take another look; or (c) vote to override the parliamentarian, which would be a radical and dramatic move that would risk altering how the institution functions going forward.

3. Far-right House Republicans think the Senate’s approach isn’t conservative enough: As The New York Times reported, “Some conservatives in the House only grudgingly voted for the legislation the first time, arguing that it did not go far enough in cutting spending, including on Medicaid. They agreed to support the package only after securing what they characterized as commitments from their Senate colleagues to enact deeper cuts and fix the measure. Now, those House Republicans regard the bill taking shape in the Senate, which party leaders hope to push through within days, as even worse.”

4. House Republicans from competitive districts think the Senate’s approach is too conservative: As NBC News reported, “On Tuesday, 16 House Republicans — almost all representing competitive districts — sent a letter rebelling against the Senate’s Medicaid cuts. They fretted that those policies would ‘place additional burdens on hospitals,’ among other things.”

5. The entire effort is unpopular. I mean, really unpopular. Republican officials have been working on this for roughly eight months, and talking up how great their plan is, but at least for now, the American mainstream isn't buying what the GOP is selling, which puts added pressure on members worried about their re-election prospects.

Given the scope of the intraparty disagreements, it’s not yet clear how, when or whether Republicans will work out their differences, and given the narrow margins in both chambers, the margin of error for party leaders is small. That said, if recent history is any guide, most, if not all, of the GOP members expressing skepticism about the legislation can be expected to cave after a couple of angry phone calls and tweets from the president.

We are headed to a debt ceiling issue soon which is why trump wants this bill done by July 4. I doubt that this will happen and we may see an emergency extension of the debt ceiling.