The Senate Parliamentarian has rejected the provision in the Trump tax bill that would have eliminated the PCAOB and transferred its responsibilities to the SEC, ruling it ineligible for passage under a streamlined reconciliation procedure. 

The move had threatened to shutter the PCAOB within one year. In May, the House passed the wide-ranging One Big Beautiful Bill Act, which contained provisions relating to taxes, border security, the debt limit, the PCAOB and more. Senate Republicans have been planning to use a budget reconciliation procedure to pass the bill by a simple majority without needing any votes from Democrats. But Democrats have been challenging various provisions, including the one about the PCAOB, arguing they would violate the so-called Byrd Rule that requires a budgetary impact to qualify for reconciliation.  

PCAOB chair Erica Williams has been speaking out against the proposal, pointing out that the work of the PCAOB can't be simply "cut and pasted" into the SEC.  

Former members of the PCAOB have also been urging the Senate to drop the provision from the bill, writing a letter to the Senate banking and budget committees explaining why the provision would violate the Byrd Rule. 

They noted that the PCAOB doesn't receive any money directly from Congress but is instead funded through accounting support fees paid by public companies. The PCAOB was established by the Sarbanes-Oxley Act of 2002, which says it's not "subject to procedures in Congress to authorize or appropriate public funds," and its accounting support fees and other receipts of the board and the standard-setting body "shall not be considered public monies of the United States."  

"The PCAOB does not receive any money directly from Congress, through the annual appropriations process or otherwise," they wrote. 

They pointed out that Sarbanes-Oxley was enacted through regular order, not by budget reconciliation. "If this provision of the Act is to be overturned, that should also be accomplished through regular order rather than through budget reconciliation," they wrote. 

The Senate Parliamentarian also rejected a number of other provisions, including one that would have eliminated the Consumer Financial Protection Bureau. 

Senate Democrats plan to continue to challenge other provisions in the bill with Senate Parliamentarian Elizabeth McDonough.