Senate Throws Cold Water on Trump’s PCAOB Plan

The idea of axing the PCAOB—yes, the same agency that keeps corporate auditors in check—just hit a wall in the U.S. Senate. And not a soft, drywall kind of wall. Think brick, concrete, and Senate Rule XXII. For those unfamiliar with Senate procedure, Rule XXII governs debate and filibuster limits in the Senate—but here, it was the Byrd Rule that did the blocking. It prohibits non-budgetary items from being jammed into budget reconciliation bills, which only need a simple majority to pass. Killing off a federal watchdog like the PCAOB? That’s a regulatory change, not a money matter. So, what now? Is the PCAOB safe, or just safe for now? Let’s take a trip through the drama that was, the chaos that is, and the questions that still hang in the air. 

The Watchdog’s Story  

When Donald Trump was elected, his campaign promises included slashing red tape, cutting taxes, and reining in what he called bloated federal oversight. Once in office, his administration quickly set its sights on the PCAOB—a relatively quiet agency with a powerful job: keeping auditors honest. The Trump team argued that folding the PCAOB into the SEC would eliminate redundancy and ease regulatory burdens for public companies. Since the SEC already had enforcement powers, why maintain a separate watchdog? 

But that logic didn’t fly with everyone—especially in the Senate. Lawmakers and investor advocates stressed that the PCAOB’s independence is exactly what makes it effective. It’s one thing to audit the books; it’s another to audit the auditors. We explored these tensions in depth in our earlier piece on whether the draft bill could eliminate the PCAOB. “This is good news for millions of Americans whose retirement savings and investments would be put at risk by eliminating the PCAOB,” said PCAOB Chair Erica Williams. 

Fun Fact: The PCAOB is funded by fees from public companies and brokers—not taxpayer dollars. That makes it an even weirder target for a budget cut, but that hasn’t stopped critics from trying to take it down. 

Byrd Rule: 1, Trump Provision: 0 

Using the Byrd Rule as a political referee, the official declared that the provision wasn’t kosher for budget reconciliation. Because slashing the PCAOB doesn’t directly impact the federal budget, it’s a regulatory action dressed in fiscal drag. 

The provision, buried in Trump’s “Big Beautiful Bill,” aimed to fold the PCAOB into the SEC—effectively stripping it of its independence under the argument of streamlining oversight and reducing corporate compliance costs. The move was pitched as pro-business, but critics saw it as a clear attempt to weaken financial accountability. Meanwhile, critics like SEC Chair Paul Atkins—a known PCAOB skeptic and part of Trump’s current administration—continue to signal that regulatory reform is far from off the table, keeping pressure on audit oversight even as the Senate pumps the brakes. 

Not to mention, in 2024 alone, the PCAOB imposed a record $35.7 million in monetary penalties—a 78% spike from 2023. That single year accounted for nearly 40% of all fines ever levied since the PCAOB’s creation. Since 2005, total penalties stand at $94 million, with $35.7 million from 2024 alone. 

PCAOB Lives — But for How Long?  

Don’t pop the champagne just yet. While the Senate ruling keeps the PCAOB alive for now, it doesn’t guarantee long-term survival. Lawmakers could still try to eliminate or defund it through standalone legislation or future budget bills, assuming they gather enough political muscle. 

More importantly, this whole saga has already created uncertainty. Auditors, CFOs, and compliance teams are left wondering: Should we still be prepping for PCAOB inspections? (Short answer: yes.) And what does this say about the future of regulatory independence in the U.S.? 

Final Thought

It’s hard not to wonder why this particular agency has become such a political lightning rod. Sure, the PCAOB’s job isn’t glamorous. But it’s critical—especially when markets are shaky and trust in financial reporting is wearing thin. Accountants might not make headlines every day, but when oversight breaks down, everybody feels it—investors, employees, and entire industries. So when a 2002-era safety net gets thrown on the chopping block in 2025, it’s worth asking: Who benefits from less oversight? The Senate just put the brakes on a controversial maneuver. But as long as politics and accounting remain roommates in Washington, don’t expect this to be the last attempt at a quiet kill.  Stay sharp, and keep your spreadsheets cleaner than your campaign finance records. You're being watched—still.