Senate parliamentarian spares PCAOB

The PCAOB will live to regulate another day.

The Senate parliamentarian has, in essence, struck down a measure in the Big, Beautiful Bill Act (BBBA) that would have eliminated the PCAOB and given the SEC control over its functions.

As a budget measure, the BBBA only requires a majority vote in the Senate to pass. Currently, the Senate is divided 53–47 in favor of the GOP.

But the Senate parliamentarian, Elizabeth MacDonough, judged that the anti-PCAOB provision violates the Senate’s Byrd Rule. In other words, she found that it’s a policy measure, and not purely a budget measure, and so it would need 60 Senate votes to pass. It’s highly unlikely that the provision would garner the votes to do so in the current political climate.

MacDonough has found that certain other provisions in the BBBA also violate the Byrd Rule, including an attempt to eliminate the Consumer Financial Protection Bureau, an agency founded in the wake of the 2008 financial crisis. And she also ruled against measures that would have cut Federal Reserve salaries by $1.4 billion and reduced Office of Financial Research funding by $293 million.

PCAOB chair Erica Williams argued that the SEC could not readily assume the audit watchdog’s functions. She called the Senate Parliamentarian’s finding “good news for millions of Americans whose retirement savings and investments would be put at risk by eliminating the PCAOB,” the Wall Street Journal reported.

Legislators can still put forward measures to end the PCAOB, of course, but now they won’t be able to readily do so within the confines of the budget bill.