The Senate Budget Committee announced recently that some of the provisions of the One Big Beautiful Bill Act, are subject to being removed under the Senate’s Byrd Rule. Among them are some of the proposals that would directly impact the pay and benefits of federal employees.
What Provisions Would Be Impacted?
Both the House and Senate have proposed cuts to federal employees pay and benefits throughout the legislative process. The proposals were put forth as a means of finding savings within the federal budget to help reduce the deficit. The Senate proposals were estimated to produce over $24 billion in savings while the original House proposals were projected to generate about $50 billion in savings.
These are among the items that the Senate Budget Committee announced were flagged as being in violation of the Byrd Rule:
At-Will Employment Option
This proposal would require newly hired federal employees to choose between serving at-will or retaining their current Title 5 protections. New hires who choose to retain current Title 5 protections will face a 10-percentage point increase in their FERS contribution rates (14.4% total for most federal employees).
Conversely, a new hire who chooses to serve at-will, thereby forgoing the protections afforded to current federal employees, will only be subject to a 5-percentage point increase in FERS contributions.
MSPB Filing Fee
This proposal would impose a $350 filing fee for claims and appeals before the Merit Systems Protection Board. The fee would be refunded for successful appeals.
Bonuses for Cost Cutters
Proposed by the Senate Homeland Security and Governmental Affairs Committee, this provision would pay bonuses for federal employees who report wasteful or unnecessary expenditures that typically arise near the end of the government’s fiscal year.
Charging Federal Employee Unions for Use of Federal Resources
This provision would ban federal employee unions’ use of official time and government resources for union activities.
Disposal of USPS Electric Vehicles
This provision would rescind over $1 billion in funds allocated by the Biden administration to the USPS for purchasing and installing electric vehicles (EVs) and infrastructure under the Inflation Reduction Act. The Postal Service would be required to sell these remaining EVs and unused infrastructure.
What is the Byrd Rule?
The Senate’s Byrd Rule is a procedural safeguard designed to keep budget reconciliation bills focused strictly on fiscal matters—like taxes, spending, and the debt limit—by blocking unrelated policy provisions from being included.
Named after Senator Robert Byrd (D-WV), the rule was first adopted in the 1980s and later made permanent in 1990. It applies only in the Senate and only to reconciliation bills, which are special budget-related bills that can bypass the filibuster and pass with a simple majority.
Under the Byrd Rule, a provision is considered “extraneous” (and thus subject to removal) if it:
- Does not affect outlays, revenues, or terms of payment
- Increases the deficit beyond the budget window (usually 10 years)
- Falls outside the jurisdiction of the committee that submitted it
- Has only an incidental budgetary impact compared to its policy goals
- Proposes changes to Social Security
- Increases or decreases outlay or revenue when the committee doesn’t follow its instructions
What Does This Mean for These Legislative Proposals?
So does this mean that these proposals are not going to be included in the final spending bill? Not necessarily, but it makes including them much more difficult.
If Senate Parliamentarian Elizabeth MacDonough determines that a provision in the One Big Beautiful Bill violates the Byrd Rule, that provision is potentially stripped from the bill unless 60 Senators vote to override her ruling, which is highly unlikely given the current makeup of the Senate in which Republicans hold 53 out of 100 seats.
Provisions found to be in violation could also be amended and resubmitted in order to pass muster.
According to the Daily Signal:
The Senate parliamentarian’s rulings are something of a setback to Republicans, but they are not necessarily final. A simple option is to amend and resubmit the provision so that the parliamentarian no longer considers it in violation.
The Senate can also motion to waive the parliamentarian’s ruling, which requires 60 votes—an unlikely outcome given Republicans’ 53-seat majority and Democrats’ unanimous opposition to the bill.
The article also states that Vice President JD Vance could ignore the parliamentarian’s rulings as the presiding officer of the Senate or that the parliamentarian could be removed, but that these options “are extremely unlikely, but they are in the Republicans’ toolbox if they consider MacDonough’s rulings do considerable damage to the main legislative vehicle for enacting Trump’s agenda.”
The ultimate fate of these proposals for federal employees is yet to be determined, but FedSmith will continue to provide updates as they become available.
