The One Big Beautiful Bill Act (OBBBA), a massive reconciliation bill currently under debate in the U.S. Senate, has faced significant scrutiny from the Senate Parliamentarian, Elizabeth MacDonough. Several provisions, particularly those affecting federal employees, have been struck from the bill for violating the Byrd Rule. This article explores the Byrd Rule, its implications for federal employee provisions, and recent developments, with a focus on Byrd Rule student loans and other key provisions. We aim to provide a clear, user-friendly overview optimized for Google SEO, ensuring accessibility and relevance for readers seeking the latest updates.

What Is the Byrd Rule?

The Byrd Rule, named after the late Senator Robert Byrd of West Virginia, is a Senate regulation designed to keep budget reconciliation bills focused strictly on fiscal matters, such as taxes, spending, or the debt limit. Reconciliation bills allow Congress to pass legislation with a simple majority (51 votes) rather than the usual 60-vote threshold, bypassing potential filibusters. However, the Byrd Rule ensures that only provisions with a direct budgetary impact are included.

According to the Economic Policy Innovation Center, a provision may be struck from a reconciliation bill if it fails any of the following six tests:

1. No Budgetary Impact: The provision does not affect outlays, revenues, or terms of payment.
2. Increases Deficit Beyond Budget Window: It increases the budget deficit beyond the 10-year budget window.
3. Outside Committee Jurisdiction: The provision falls outside the submitting committee’s jurisdiction.
4. Incidental Budgetary Impact: The budgetary impact is only incidental compared to its policy goals.
5. Changes to Social Security: The provision proposes changes to Social Security.
6. Non-Compliance with Instructions: The committee fails to follow its reconciliation instructions.

If a provision violates the Byrd Rule, it requires 60 votes to remain in the bill—a challenging threshold, given the Senate’s current composition of 53 Republicans.

Federal Employee Provisions Struck by the Senate Parliamentarian

The Senate Parliamentarian recently ruled that several provisions in the One Big Beautiful Bill Act violate the Byrd Rule, including those impacting federal employees. These provisions, reported by the Senate Budget Committee in late June 2025, are outlined below in a user-friendly table for clarity.

Provision	Description	Byrd Rule Violation
At-Will Employment Option	Proposed increasing FERS contribution rates for newly hired federal employees by 10% if they retain civil service protections, or 5% if they opt for at-will employment (losing protections).	Likely deemed to have an incidental budgetary impact or outside committee jurisdiction.
MSPB Filing Fee	Imposed a $350 refundable fee for federal employees filing claims or appeals with the Merit Systems Protection Board (MSPB).	Considered extraneous, with policy goals outweighing budgetary impact.
Bonuses for Cost Cutters	Based on Senator Rand Paul’s legislation, this would offer bonuses to federal employees reporting wasteful spending, particularly end-of-fiscal-year “use it or lose it” spending.	Ruled as having an incidental budgetary effect compared to its policy intent.
Charging Federal Employee Unions	Required unions to reimburse the government for using federal resources, effectively banning official time.	Deemed non-compliant with Byrd Rule due to limited direct budgetary impact.
Disposal of Postal Service Electric Vehicles	Rescinded $1 billion from the Inflation Reduction Act for Postal Service electric vehicles and mandated selling unused vehicles and infrastructure.	Likely violated Byrd Rule for being outside committee jurisdiction or having incidental fiscal impact.

These rulings, announced in the last few days of June 2025, represent a significant setback for the Republican-led bill, which has already passed the House and is now under Senate consideration.

Byrd Rule and Student Loans: Additional Impacts

In addition to federal employee provisions, the Byrd Rule has also affected proposed changes to student loan programs, a key focus of the One Big Beautiful Bill Act. The Senate Parliamentarian ruled that provisions altering repayment options for current student loan borrowers violate the Byrd Rule. Specifically, a proposal to limit federal student loan borrowers to two repayment options—a standard 10-25 year plan or a new income-based Repayment Assistance Plan (RAP)—was struck because it could not be applied to existing borrowers without violating Senate rules. This ruling could reduce potential savings from the Health, Education, Labor, and Pensions (HELP) Committee by $150 to $200 billion.

The Byrd Rule student loans issue highlights the challenges of including significant policy changes in reconciliation bills. For example, another provision removing federal student aid eligibility for certain non-citizen immigrants was also flagged as non-compliant, further complicating the bill’s fiscal goals.

What Happens Next?

When a provision is struck under the Byrd Rule, there are several potential paths forward, though each presents challenges:

1. Override the Parliamentarian: Overruling the Senate Parliamentarian requires 60 votes, which is unlikely given the Senate’s current composition (53 Republicans). Senate Majority Leader John Thune has indicated he does not intend to pursue this option.
2. Amend and Resubmit: Republicans can rewrite the struck provisions to comply with the Byrd Rule and resubmit them for review. This process is underway as senators scramble to meet President Trump’s July 4, 2025, deadline for passing the bill.
3. Ignore the Ruling: The Vice President, as the Senate’s presiding officer, could theoretically ignore the Parliamentarian’s rulings. Alternatively, the Parliamentarian could be removed, as some Republicans, like Senator Tommy Tuberville, have suggested. However, these options are considered “extremely unlikely” due to political and procedural risks.
4. Remove the Provisions: If amendments fail, the struck provisions may be removed entirely to ensure the bill can pass with a simple majority.

The Daily Signal notes that while these options exist, the Parliamentarian’s rulings deal a significant blow to the bill’s current form, particularly for provisions tied to President Trump’s agenda.

Broader Context: The One Big Beautiful Bill Act

The One Big Beautiful Bill Act is a multitrillion-dollar reconciliation package that includes tax cuts, spending reductions, and policy changes across various sectors, such as healthcare, energy, and immigration. The House passed the bill in April 2025, and it is now undergoing a rigorous review process in the Senate, known as the “Byrd Bath,” where the Parliamentarian examines each provision for Byrd Rule compliance.

In addition to federal employee provisions and Byrd Rule student loans issues, the Parliamentarian has struck other provisions, including:

• Medicaid Reforms: Provisions barring federal Medicaid funding for gender-affirming care, limiting non-citizen eligibility, and capping provider taxes were deemed non-compliant.
• Public Land Sales: A proposal to sell over 2 million acres of federal land was ruled out, facing opposition from some Republicans and conservation groups.
• Anti-Abortion Measures: A provision preventing Affordable Care Act (ACA) subsidies for plans covering abortion services was struck.

These rulings have sparked frustration among some Republicans, with calls to fire the Parliamentarian or overrule her decisions. However, others, like Senator Susan Collins, emphasize the importance of respecting the Parliamentarian’s role, noting her impartiality in past rulings affecting both parties.

Why This Matters for Federal Employees

For federal employees, the struck provisions represent both a reprieve and continued uncertainty. Proposals like the at-will employment option and MSPB filing fee could significantly alter job security and workplace protections. The Byrd Rule rulings protect federal workers from these immediate changes, but Republicans may attempt to reintroduce revised versions before the July 4 deadline.

The Byrd Rule student loans provisions also have broader implications, as federal employees often rely on student loan repayment programs. Changes to these programs could affect their financial planning and retention in public service roles.

Stay Informed

The One Big Beautiful Bill Act is still evolving, and the Senate’s final version may differ significantly from the House-passed bill. Federal employees and those interested in Byrd Rule student loans should stay updated as the July 4, 2025, deadline approaches. For the latest news, visit reputable sources like FedSmith.com or follow updates from the Senate Budget Committee.

As the process unfolds, the interplay between Senate rules, political priorities, and the Byrd Rule will shape the future of this landmark legislation. Subscribe to our newsletter or check back for more updates on how these changes could impact federal employees and beyond.

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