Senate Parliamentarian Rejects 'Drill Baby Drill' Provisions In GOP Megabill

Update (1412ET): First it was the judges. Now Democrat Senate Parliamentarian Elizabeth MacDonough is shredding a ton of provisions in the Big Beautiful Bill - most recently a provision that automatically certifies offshore oil and gas projects as being compliant with the National Environmental Policy Act - skipping the environmental review process that was deemed not germane to the so-called 'Byrd Rule.' 

The rule allows bills to pass via 'reconciliation,' or a simple majority in the Senate - otherwise they require 60 votes to advance. The Byrd Rule requires that reconciliation bills be related to the federal budget, revenue, and the national debt - and MacDonough has been having her way with it. 

Other measures she tossed include a portion that would have required the interior secretary to allow the construction of a controversial mining thorough fare - Ambler Road - in Alaska, as well as another provision that would have removed the interior secretary's discretion to lower fees for solar and wind projects on federal land. 

A section related to natural gas and import fees was also tossed. 

"Democrats continue to show up and fight every provision of this Big, Beautiful Betrayal of a bill, because this bill is an attack on workers and families everywhere," said Senate Budget Committee Ranking Member Jeff Merkley (D-OR). "Democrats will not stand idly by while Republicans attempt to circumvent the rules of reconciliation in order to sell off public lands to fund tax breaks for billionaires. We will make sure the Byrd Rule is followed and review any changes Republicans attempt to make to the bill." 

ManDonough previously rejected provisions including allowing states to conduct immigration enforcement, reducing the pay of federal civil service employees if they don't agree to "at-will" status, cutting the pay of Federal Reserve staff, effective defunding the Consumer Financial Protection Bureau, and requiring Congress to approve regulations that cost over $100 million.

Senate Republicans are in panic mode this week, frantically rewriting their so-called “big, beautiful bill” before a planned Thursday Friday vote, but the trillion-dollar package is sagging under the weight of internal brawls, Medicaid landmines, and the looming judgment of the Senate parliamentarian, Politico reports.

GOP leaders insist they’re on track to start voting Thursday, but senators emerging from a tense closed-door briefing Monday night admitted that major parts of the megabill, including key tax language and Medicaid provisions, remain in flux, and the final text still hasn’t been released.

“I think we’ll eventually pass something, I just can’t tell you when,” Sen. John Kennedy (R-LA) said bluntly. “We’ve got a lot of stuff to work out, and the bill will be changed on the floor.”

The holdup centers on the so-called “Byrd bath,” the parliamentarian’s behind-closed-doors review of which pieces of the legislation qualify under budget reconciliation; the GOP’s only way to pass the bill without Democratic support. Parliamentarian Elizabeth MacDonough’s rulings could land as late as Wednesday night, just hours before the Senate’s first expected vote.

As we noted on Monday, MacDonough (D) has booted several major provisions from the Republican megabill to enact President Trump's agenda - including language which would authorize states to conduct border security and immigration enforcement (more below). 

“Part of it right now is the Byrd bath, and it’s taking a little bit longer,” admitted Senate Majority Leader John Thune (R-SD), who’s hoping for a Thursday kickoff with final passage over the weekend.

But it’s not just Senate procedure clogging the drain — it’s the substance, too.

SALT Showdown

Sen. Markwayne Mullin (R-Okla.) has been trying to broker a deal on the controversial state-and-local-tax deduction cap, or SALT. He pitched keeping the $40,000 cap that the House passed while tweaking the income threshold at which it phases out - a move aimed at soothing House SALT rebels.

Problem is, those same House Republicans already rejected that combo days ago. And after Monday night’s briefing, even GOP senators weren’t sure if Mullin had actually sealed any agreement or just tossed out “options.”

Medicaid Minefield

Then there’s Medicaid...

GOP leaders are floating a special fund for rural hospitals to ease concerns over deep Medicaid cuts in the Senate version of the bill, specifically, a plan to slash the provider taxes that many states rely on to trigger larger federal payments.

“I am absolutely happy with a rural fund; I think that would be great,” Sen. Josh Hawley (R-MO) said. “Will that solve the issue? I don’t know.”

Sen. Thom Tillis (R-NC) even handed out a printed breakdown showing how much Medicaid money states like his and Hawley’s would lose under the current proposal. Hawley also said Thune reassured senators the bill wouldn’t alter federal cost-sharing for states that expanded Medicaid under Obamacare, a key worry among more moderate Republicans.

But none of that is calming nerves in the House, where GOP leaders are warning that the Senate’s version could be a poison pill.

Speaker Mike Johnson has urged senators to make minimal tweaks to the House-passed bill. House Freedom Caucus Chair Andy Harris (R-MD) put it more bluntly: “If it should pass the Senate in its current rumored form, it probably would have trouble in the House.”

Parliamentarian Potholes

Meanwhile, Senate Republicans are reeling from MacDonough’s early rulings that tossed out several major cost-saving provisions.

A proposal to penalize states for food-aid payment errors, designed to shift costs and save billions, was deemed noncompliant with reconciliation rules. Senate Agriculture Republicans are now scrambling to salvage the plan with a rewrite.

Also in the trash heap: Sen. Mike Lee’s plan to overhaul federal rulemaking and sell off millions of acres of public lands. Lee is now offering a narrower version excluding Forest Service lands and may revive the proposal as a floor amendment.

And the tax section, the heart of the GOP bill, is still under review. Finance Committee staff met with MacDonough Monday and are expected to return Tuesday to go over the language line by line. Final rulings aren’t expected until Wednesday at the earliest.

Trump Steps In

President Donald Trump is now working the phones and the White House to get fiscal conservatives on board.

On Monday, Trump met with Sens. Lee, Rick Scott (R-FL), and Ron Johnson (R-WI) and urged them to support full repeal of Biden’s clean energy tax credits and to focus on slashing Medicaid waste, fraud and abuse. The trio delivered Trump’s message to House Freedom Caucus members in a private meeting Monday night.

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