Senate Parliamentarian Elizabeth MacDonough ruled that the Trump Administration and congressional Republicans cannot use the pending budget reconciliation bill to eliminate funding to the CFPB in a June 23, 2025, announcement.
Under Senate rules, the budget process can be used only for legislation primarily aimed at revenue and spending. As the budget reconciliation process is immune to a filibuster, it cannot be utilized to amend public policy. As Holland & Knight previously reported, the pending budget reconciliation bill passed by the House of Representatives included a provision aimed to eliminate nearly 70 percent of the CFPB's annual budget. MacDonough, whose role is to ensure legislative procedure and rules are followed by lawmakers, concluded that the CFPB budget cuts are not germane to matters of revenue and spending and, thus, cannot be included in the filibuster-proof reconciliation process under the Byrd Rule.
Sen. Tim Scott (R-S.C.), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, affirmed his commitment to "cutting wasteful spending at the CFPB" and intention to "continue working with the Senate parliamentarian on the Committee's provisions." Sen. Mike Rounds (R-S.D.) stated on June 23, 2025, that though changes to the provisions of the bill concerning budget cuts to the CFPB have "not been confirmed yet," as they do not have a final ruling from the Senate parliamentarian, Senate Republicans "most certainly think [they] have a path forward to significantly limit the CFPB and save some money as well."
MacDonough's announcement comes after all 11 Democrats on the Senate Banking Committee signed a letter calling on Sen. Scott to schedule a markup on the legislation to address how the cuts to the CFPB's budget violates "longstanding rules of the Senate that would make them subject to being stripped out under the Byrd rule." Not only were Senate Democrats wary of procedural violations, but their letter also highlighted how such a significant reduction in funding would "make it easier for bad actors to cheat American families." The Senate Banking Committee's Republican version of its part of the budget reconciliation bill sought to remove the CFPB's current funding source by eliminating the agency's ability to draw from the Federal Reserve's inflation-adjusted total operating expenses. Presumably, however, the CFPB could still request funding through the appropriations process.
This is not the first instance the Democratic members of the Senate Banking Committee have criticized Republicans' efforts to effectively eliminate the CFPB. As previously reported by Holland & Knight, Sen. Elizabeth Warren (D-Mass.) drafted an April 28, 2025, letter to CFPB Acting Director Russell Vought expressing "grave concerns" about the agency's ability to fulfill more than 80 congressionally mandated functions in light of the CFPB's recent reductions in force. The letter came days after Sens. Warren and Andy Kim (D-N.J.) requested the U.S. Government Accountability Office (GAO) to conduct a comprehensive review of the Trump Administration's efforts to descale the CFPB.
Though Senate Republicans have not yet published a revised draft of the proposed CFPB budget cuts, they will need to establish how such budget cuts serve a primary budgetary purpose, rather than advance policy to eliminate a disfavored agency.
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