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Senate parliamentarian rules against key provisions from Trump's 'big, beautiful bill'
The Senate parliamentarian, Elizabeth MacDonough, ruled that several key provisions in the "big, beautiful bill" violate the Byrd Rule, potentially setting the stage for the provisions to be removed altogether.
In order to avoid a filibuster and pass the bill under a simple majority, the legislation needs to be compliant with the Byrd Rule, which prevents "extraneous" provisions from being included in reconciliation. The "extraneous" provisions MacDonough ruled against include key climate and financial provisions.
Although these rulings can be contentious, they are not set in stone.
One provision the parliamentarian ruled against came from the Senate Banking Committee's reconciliation text, which would have cut $6.4 billion in funding from the Consumer Financial Protection Bureau. She also ruled against cutting $1.4 billion by reducing the wages for Federal Reserve staff, cutting $293 million from the Office of Financial Research, and cutting $771 million by abolishing the Public Company Accounting Oversight Board.
MacDonough also ruled against a provision that would repeal green energy subsidies authorized by the Inflation Reduction Act, as well as certain tailpipe emission standards put forth by the Environmental Protection Agency.
RELATED: Republican support wanes as Senate overhauls key provisions in 'big, beautiful bill'
Although these rulings can be contentious, they are not set in stone. James Wallner, vice president of policy at the Foundation for American Innovation, told Blaze News that the parliamentarian's rulings are based on precedent and provide an advisory role subject to the chair.
"There's how it works on paper, and then how it works in practice," Wallner said. "The parliamentarian is just a staffer. So we have a parliamentarian because you have all these different procedural authorities and Senate rules. The Senate rules, though, are very vague, and they are many pages long."
"So you have all these rules, but oftentimes what happens is the rule isn't very explicit, and there are ambiguities," Wallner added. "So when there are ambiguities, the parliamentarian will advise the Senate. At least in theory."
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Wallner said the parliamentarian works alongside both majority and minority committee staff to identify provisions that violate the Byrd Rule. Once the parliamentarian issues a ruling, a senator has to raise a point of order on the floor about the Byrd violations. The parliamentarian then advises the chair, who ultimately makes the final decision as to whether the provision in question is a violation.
Although MacDonough ultimately serves in an advisory capacity, Wallner told Blaze News that senators often like to point the finger at the parliamentarian.
"Senators talk about her as if she's the only one who decides," Wallner said. "But it's a very convenient way for them to kind of pass the buck and act like they're not in charge. The parliamentarian has no power to actually issue it authoritatively."
"It can be adversarial, but it's through that adversarial process that you really get a robust discussion of these provisions," Wallner added.
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A tax hike is coming — and it’s not just for the rich
Academy Award-winner Elizabeth Taylor, married eight times to seven men, likely entered each union with the hope it would last. Good things, after all, should be permanent.
Yet in Washington, permanence is too often treated as a liability. Nowhere is this more apparent than in tax policy. Thanks to arcane rules surrounding budget reconciliation, Congress routinely enacts pro-growth reforms with an expiration date baked in.
A permanent extension of the reconciliation bill’s pro-growth elements would produce more ‘bang for the buck’ than a temporary extension.
Consider the House-passed One Big Beautiful Bill Act. Though the measure would extend and build upon President Donald Trump’s 2017 Tax Cuts and Jobs Act, it fails to permanently extend several of the law’s most pro-growth elements.
That’s a mistake. Again, good things should be permanent.
Pro-growth policies need permanence
Earlier this month, Unleash Prosperity Now — a nonprofit aligned with President Trump — organized a letter signed by more than 300 economists, myself included, urging Congress to “extend President Trump's tax cuts permanently to prevent a tax increase on January 1, 2026.”
Why do we insist upon permanence? Permanent pro-growth public policies result in better economic outcomes. In contrast, temporary policies create troublesome uncertainty, which, in turn, sows confusion for consumers and businesses, making financial planning and investment needlessly difficult.
A permanent extension of the reconciliation bill’s pro-growth elements would produce more economic “bang for the buck” than a temporary extension. It’s that simple.
According to the Tax Foundation, “Permanence for the [bill’s] four cost recovery provisions would more than double the long-run economic effect.” These provisions would include 100% bonus depreciation, expensing of research and development investment, and a more generous interest deduction limit, among others.
The Tax Foundation concludes:
The current package produces meager effects on GDP and a smaller U.S. capital stock over the long run because the cost recovery provisions sunset. As lawmakers continue to debate the tax package, they should not compromise on permanence for the most pro-growth provisions.
This view aligns with the prevailing economic literature. For example, a 2019 study by the St. Louis Federal Reserve concluded, “A rise in uncertainty is widely believed to have detrimental effects on macroeconomic, microeconomic, and financial market outcomes.”
If that warning were plastered on the side of a pack of cigarettes, it would read, “Congressionally induced policy uncertainty is hazardous to the country’s economic health.”
Jobs under threat
Fortunately, Senate Finance Committee Chairman Mike Crapo (R-Idaho) is determined to extend the reconciliation bill’s most pro-growth elements permanently. Bravo, Mr. Chairman!
Permanence aside, why did more than 300 economists call for preventing the tax increase scheduled under current law?
RELATED: I was against Trump’s ‘big, beautiful bill’ — Stephen Miller changed my mind
If taxes increase as planned, the economic fallout could be steep. Wells Fargo warns that average monthly job creation could plummet from 133,000 in the first quarter to just 25,000 next quarter — and then turn negative, with an estimated loss of 17,000 jobs per month in the fourth quarter.
If Congress fails to “spike the hike,” Wells Fargo estimates economic growth will slow to a tepid 1.1% this year and next.
A warning to deficit hawks
For those worried about the deficit, here's the paradox: Letting the economy slow — or worse, slip into recession — is the surest way to worsen the nation’s fiscal health.
To further underscore the situation, Douglas Holtz-Eakin, who directed the Congressional Budget Office from 2003 to 2005, cautions: “Given the weak state of the economy, it [the scheduled tax increase] would likely trigger a recession, and the budget outlook never gets better in a recession.”
Yes, it’s that simple.
Elizabeth Taylor once quipped, “If you hear of me getting married [again], slap me!” At least, she had the right intentions. Congress, on the other hand, routinely resorts to temporary policies to game the reconciliation process. That needs to stop.
To guard against recession, Congress should reconsider the tax increase scheduled for next year. But to boost economic growth, Congress should follow Crapo’s lead and extend permanently the 2017 Tax Cuts and Jobs Act pro-growth provisions.
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