Republicans want to reduce CFPB budget to $0 with new bill
Back in control of the House of Representatives, the Senate and the White House, Republicans are reportedly aiming to renew their ongoing war against the Consumer Financial Protection Bureau (CFPB) by targeting the money allocated to it by the Federal Reserve, which would effectively reduce the agency’s budget to $0.
This is according to a report from The Wall Street Journal (WSJ), and an announcement by the office of Sen. Ted Cruz (R-Texas), who is spearheading new legislation. This would renew previous efforts targeting the agency undertaken by Republican majorities in President Donald Trump’s first term.
Cruz this week introduced the “Defund the CFPB Act,” which seeks to “zero out transfer payments from the Federal Reserve to the [CFPB],” according to the announcement. Rather than drawing directly appropriated funds from Congress, the Bureau operates from a portion of the budget allocated to the Fed.
Most legislation in the Senate requires 60 votes to move forward, and Republicans currently only have a 53-47 seat majority in the upper chamber. But Cruz and fellow senators who are co-sponsoring the bill believe they have a tactic that would allow them to skip over that requirement according to an unnamed source in the WSJ report, particularly since the bill is likely to face opposition from Democrats.
“Republicans are currently planning to use that procedure, called budget reconciliation, to advance major parts of Trump’s agenda on tax cuts and border enforcement,” the report said. “Republicans currently have a 53-47 majority in the Senate.”
To qualify the legislation for budget reconciliation, “any change must be fiscal in nature and must have a significant impact on the budget that is more than incidental to any policy change being sought,” the report said. But there is an outstanding question about whether or not Congress can target the bureau’s allocation, since it technically falls outside of the congressional appropriations process.
A positive qualification would be required from the Senate’s parliamentarian, which has not always given lawmakers the answers they want about what does, and does not, qualify for reconciliation. The report cites 2021 efforts by congressional Democrats to raise the federal minimum wage.
But Cruz and his allies are determined to see this effort through.
“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions,” Cruz said in a statement. “It is an unchecked Obama-era executive arm and the Federal Reserve should not be transferring funds to it. Enacting this legislation would save American taxpayers billions of dollars and I call on the Senate to expeditiously take it up and pass it.”