Republicans hit a major roadblock on Friday in their push to eliminate funding for the Consumer Financial Protection Bureau (CFPB) as part of President Trump’s sweeping tax and spending package. The Senate parliamentarian flagged the effort as a violation of the Byrd Rule, putting a key piece of the bill in jeopardy.
The GOP had hoped to zero out the CFPB’s funding, a move they claimed would save $6.4 billion. Created after the 2008 financial crisis, the CFPB was designed to protect Americans from financial abuse and predatory lending. But it’s long been a target of Republican criticism, who argue the agency represents government overreach.
Despite Republican hopes, the parliamentarian’s ruling dealt a serious blow to this and several other controversial proposals within the bill.
Democrats Claim Victory, Republicans Vow to Press On
Democrats celebrated the decision. Sen. Elizabeth Warren (D-MA), a chief architect of the CFPB, called the GOP’s attempt “a reckless, dangerous attack on consumers.”
“Republicans are trying to help big banks at the expense of working families,” Warren said. “Their plan would open the door for financial giants to trick and trap everyday Americans.”
Sen. Tim Scott (R-SC), chair of the Senate Banking Committee, which authored the provision, said Republicans are not backing down. “We’re committed to cutting wasteful spending at the CFPB,” he said. “We will continue working with the parliamentarian.”
Byrd Rule Creates Obstacles for Sweeping GOP Bill
The parliamentarian’s job is to ensure that the bill complies with the Byrd Rule, a procedural guardrail that bars certain policy changes from being included in budget reconciliation bills—the special process that allows legislation to pass the Senate with a simple majority instead of the usual 60 votes.
Violations mean those provisions can be challenged and may need to be removed, risking support from GOP lawmakers who championed them.
In addition to blocking the CFPB cuts, the parliamentarian also flagged several other components:
- A plan to limit the Financial Research Fund, saving $300 million.
- A proposal to shift oversight of accounting firms from the Public Company Accounting Oversight Board to the SEC, cutting $773 million.
- A change in Federal Reserve employee pay, meant to save $1.4 billion.
- Rollbacks on elements of the Inflation Reduction Act.
- A repeal of certain vehicle emission standards for model year 2027.
- A provision requiring detailed spending plans from the Defense Secretary, with fines for noncompliance.
All were found in violation of Senate rules and could be struck unless revised.
What’s at Stake in the Broader Package?
The broader Trump-backed tax and spending bill aims to extend $4.5 trillion in Trump-era tax cuts, boost defense spending by $350 billion, and slash over $1 trillion from Medicaid, food stamps, and other programs. However, it could also add $2.4 trillion to the federal deficit and leave nearly 11 million more people uninsured, according to the nonpartisan Congressional Budget Office.
The proposal is under intense scrutiny as GOP leaders aim to pass it by Trump’s July 4 deadline. However, the number of Byrd Rule violations flagged so far signals a rough road ahead.
Perhaps the most contentious issue still to be reviewed by the parliamentarian is the GOP’s attempt to switch from a “current law” to a “current policy” baseline—an accounting change that could mask the bill’s true cost.
What’s Next?
Republicans are racing to rewrite portions of the bill to ensure it survives the parliamentarian’s review, but they face a delicate balancing act. Stripping too much could alienate core supporters. Keeping too much risks defeat on the Senate floor.
As negotiations continue, one thing is clear: The battle over the CFPB is far from over, and the outcome could shape not only the future of consumer protection but also the path of the U.S. economy for years to come.
