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House finance budget bill nixes PCAOB, curbs CFPB funding

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Waters Hill
House Financial Services Committee ranking member Maxine Waters, D-Calif., left, and chair French Hill, R-Ark.

Bloomberg News

The House Financial Services Committee passed a budget bill Wednesday that eliminates the Public Company Accounting Oversight Board and caps the Consumer Financial Protection Bureau’s budget at roughly $249 million, a drastic reduction from its recent budgets.

Committee chair French Hill, R-Ark., said the moves outlined in the budget bill — which will be combined with similar bills in other committees to make up the bill that will appear on the House floor for a vote — deliver more than the $1 billion annual savings required by the House Budget resolution that passed in February. The bill passed the committee by a 30-22 vote along party lines.

“We’re taking a strong step toward restoring fiscal discipline and ensuring government funding is being used wisely and transparently,” Hill said. “To deliver on President Trump’s agenda … House Republicans will reduce the deficit and exceed the $1 billion savings target outlined in the budget resolution.”

The bill would eliminate the PCAOB’s ability to assess and spend accounting support fees, would direct any unspent funds back to the Treasury Department and direct the Securities and Exchange Commission to take over the board’s responsibilities and cease collecting fees. The PCAOB was established in 2003 as part of the Sarbanes-Oxley Act to be an independent investigator and standard-setting body for auditing firms, a need that Congress identified after the WorldCom and Enron accounting scandals created a crisis of confidence in public accounting statements.

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The bill would also cap the CFPB’s budget at 5% of the Federal Reserve’s total operating budget for 2009, a figure Hill said would amount to roughly $249 million. The CFPB’s estimated operating budget for the 2024 fiscal year was $684.9 million. The bill would also direct the CFPB to return all remaining funds from the Civil Penalty Fund back to the Treasury Department after direct victims had been compensated. The bill also directs the U.S. Department of Housing and Urban Development to rescind unobligated funds for the Green and Resilient Retrofit Program, which were appropriated as part of the Inflation Reduction Act in 2022. The program provides grants for landlords receiving HUD assistance to improve energy and water efficiency, improve indoor air quality and climate resilience for their properties.

The bill also limits assessments collected by the Office of Financial Research to the average operating budget of the Financial Stability Oversight Council over the prior three years. 

During a marathon markup hearing that went into the evening, Democrats offered 35 amendments to the bill, including measures to investigate who is investing in the Trump family’s World Liberty Financial crypto company, as well as to maintain funding for the PCAOB and CFPB. None of the Democratic amendments were adopted; all were voted down along party lines. 

Speaking in favor of an amendment to maintain the PCAOB, Rep. Maxine Waters, D.-Calif., said the organization inspects auditing firms not only in the U.S. but in more than 50 countries abroad, including China. Dissolving the board and handing its duties to the SEC, she said, would cost taxpayers money and give China an opportunity to press its advantage. The PCAOB — which is a non-governmental standard-setting body — has an agreement with the Chinese government to inspect auditing firms, she said, but the SEC does not.

“Every Republican and Democratic member of this committee must understand that if we shut down the PCAOB and transfer its authority to the SEC, we’re shutting down our regulators’ access to China-based auditors,” said Waters, the committee’s ranking member. “If we disband the PCAOB today, the SEC cannot simply be a substitute.”

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Accounting

Tariffs collide with taxes in Trump bill

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The tax reconciliation bill making its way through Congress is expected to add trillions of dollars to the national debt, but the Trump administration hopes to offset the cost through income from tariffs. Accountants are helping worried companies deal with the possible fallout.

“Obviously, tariffs create a lot of uncertainty,” said Tom Alongi, a partner and U.S. national manufacturing practice leader at UHY, a Top 50 Firm based in Farmington Hills, Michigan. “But with uncertainty for U.S. manufacturers, it creates a lot of opportunity. And for those that are contract manufacturers that use a lot of offshoring, it creates a tremendous amount of angst, especially among the auto industry that really over the last three decades has turned into a global supply chain as we’ve been in a race to the bottom to reduce costs.”

UHY has been helping CFOs deal with the changing tariff policies coming out of the White House. “A lot of companies don’t even realize how deep some of their supply chain and where some of their raw material and purchased components ultimately originate,” said Alongi. 

That involves quantifying the impact, understanding the origin of components and raw materials, and where that fits in the Harmonized System that’s administered by the International Trade Administration, making sure everything is classified correctly. 

The Trump administration hopes to convince more companies to relocate their manufacturing operations to the U.S. But companies are also looking at changing their sourcing to other countries if they’ve been relying too heavily on Chinese-made supplies amid the ever-changing tariff pronouncements.

“That uncertainty does create challenges within our clients of allocation of capital,” said Alongi. “Do I make big bets to transition if I have a huge amount of risk that is isolated in a certain country? What do we potentially do to mitigate that risk?”

Auto manufacturers need to look at the proposed changes to tax credits in the tax bill, including reductions in electric vehicle tax credits and other tax incentives for renewable energy.

“I always knew that it is a great alternative source that fits certain consumers, but I never believed that it was going to take over the world,” said Alongi, who has been driving an EV for over seven years. “The tax credits create a behavior, and they incentivize people to drive electric.” 

The shortcomings in the national infrastructure for charging EV batteries disincentivize broader takeup, and the disappearance of the tax credits would make the vehicles even less affordable.

CBIZ, a Top 10 Firm based in Cleveland, launched an Integrated Tariff Solutions program earlier this month for its clients nationwide, offering support across finance, operations, supply chain strategy, tax and compliance. 

“Like so many other middle-market companies, certainly the larger companies, in this environment, there’s more demand for advice on mitigating exposure,” said Mark Baran, managing director of CBIZ’s National Tax Office. “Tariffs have been relatively low for a long time, and now the supply chain, pricing, vendor relationships and locations of where goods are manufactured need a fresh look.”

Different industries are looking for help, including manufacturing, construction and import. “They’re really looking at how to mitigate these costs, which don’t appear to be slowing down,” said Baran. “It could be temporary, but it’s not right now. So we have developed a number of different avenues to assist our clients, whether it’s evaluating inventory and how to properly account for inventory, whether it’s seeking to help them find locations in the U.S. if they want to bring their manufacturing back to the U.S. and do that in a tax efficient manner. We’re looking at intercompany transactions and layering transfer pricing concepts onto customs, seeing if we could help with savings in that regard. Depending upon what a client does and their structure, there’s probably a number of ways you can tackle tariffs and get ahead of it. “

Customs valuations are important. “It’s really ensuring that you have an accurate customs valuation, and oftentimes that wasn’t looked at accurately, and there are savings that can result from that,” said Baran. “These are considered an intercompany framework, oftentimes on the businesses that are most impacted by this. Looking at that structure is another way of doing this, not just not just transfer pricing, but location-based analysis. It’s taking what has been decades of international tax knowledge and layering on customs, and that’s providing a framework that’s been tested and works and is valuable.”

Baran has also been keeping a close eye on developments with the overall tax legislation. House Republicans have come under pressure from President Trump to finalize the bill this week, but that won’t be the end of the story. “What’s waiting for them at the Senate tells me that this bill may not look the same because there’s already opposition from the Senate, and the Senate has a lot of rules that they need to follow,” said Baran. “The Senate has concerns, and the Senate instructions in the budget reconciliation concurrent resolution are very different than the House, so you may have a House and a Senate that’s producing two completely different bills. While it’s nice to report and discuss all of the changes that are coming out of the House, I think people should just keep in mind that the Senate is next, and do not assume that they will follow suit. So the ultimate bill that’s eventually produced is going to look a lot different than it does now.”

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Fastest-growing accounting firms spend double on marketing

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The fastest-growing accounting firms spend twice as much on their marketing budget than all other firms, according to a new study.

The Association for Accounting Marketing, in collaboration with the Hinge Research Institute, surveyed over 87 firms — representing 1,037 offices and 66,000 employees — about the drivers behind the marketing performance of the fastest-growing firms. 

High-growth firms invest two-thirds more in employer branding and recruiting, and they budget more for conferences and events, the data found. 

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When it comes to marketing budgets, the fastest-growing firms spent 2.1% of their revenue versus low-growth firms, which spent 1%. Some of that money is invested in marketing teams. High-growth firms have a higher ratio of marketing staff to full-time equivalents (1:49) compared to other firms (1:57). However, the average salary of a high-growth firm team member is 27% less than at the slowest-growing firms. 

“When it comes to marketing, the accounting industry tends to be risk averse and invests less than most other professional services industries,” Liz Harr, managing partner at Hinge, said in a statement. “But the data shows that those that spend more on marketing are getting superior results.”

High-growth firms also spend 66% more on recruiting talent and developing their employer brands — the reputation, culture, employee experiences and marketing that entices potential hires to choose their firm over another — than low-growth firms. 

(Read more: “The 2025 Fastest-Growing Firms”)

Finally, the fastest-growing firms spend 21% more of their marketing budget on conferences and other in-person events than their peers, with high-growth firms allocating 30% of their budget versus low-growth firms allocating 25%. 

“Today’s high-performing accounting firms are taking a somewhat more balanced approach to marketing,” AAM president Laura Metz said in a statement. “Digital and content marketing budgets are on the rise, but perhaps more than anything, high-growth firms are focused on nurturing relationships in person, whether at industry conferences or their own client appreciation events. These gatherings aren’t just line items, they’re growth strategies where the strongest connections, best leads and boldest brand moments take shape.”

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Trump says tax bill ‘close’ as holdouts threaten to sink it

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President Donald Trump said his massive tax package is close to being finalized, having notched a deal over the state and local tax deduction, but the White House has yet to win over a faction of conservatives who want more austere spending cuts.

“We’re doing very well. It’s very close,” Trump told reporters Wednesday.

House Speaker Mike Johnson announced Wednesday that he had an agreement with lawmakers from high-tax states to increase the limit on the SALT deduction to $40,000. 

“The members of the SALT caucus negotiated yesterday in good faith,” Representative Mike Lawler, a New York Republican, told Bloomberg Television. “We settled on something that we believe in, we support.”

However, several hardline Republicans said House GOP leaders aren’t honoring concessions the White House promised them and are threatening to tank the bill. 

But the White House says they never made a deal, instead presenting some of the conservative holdouts with a menu of policy options that the Trump administration can live with, a White House official said. 

The White House made clear to conservatives they would have to persuade their moderate colleagues to sign onto those ideas, the official said, a challenging feat given Republicans’ narrow and fractious House majority.

Trump and Johnson plan to meet with some of the ultraconservative lawmakers at the White House at 3 p.m., a person familiar with the plans said. That meeting will be an opportunity to strike a deal, the Trump official said.

Ultraconservative Representative Andy Harris of Maryland cast the conversations with the White House as a “midnight deal” for deeper cuts in Medicaid and faster elimination of Biden-era clean energy tax breaks.

“I’m sorry, but that’s a pay grade above the speaker,” Harris said. 

Harris said the bill doesn’t reflect that agreement and hardliners will block the package if it comes to a vote. Representative Ralph Norman, an ultraconservative from South Carolina, said the bill “doesn’t have the votes. It’s not even close.”

Freedom Caucus members said they aren’t moving the goal posts by asking for more spending cuts than the budget outline they already voted for. They said they want to rearrange the spending cuts to focus on ending “abuse” in Medicaid and immediately ending green energy tax breaks.

House Republicans leaders are also planning to accelerate new Medicaid work requirements to December 2026 from 2029 in a bid to satisfy ultraconservatives, according to a lawmaker familiar with the discussions. 

How deeply to cut safety-net programs such as food assistance and Medicaid health coverage for the poor and disabled has been a sticking point in reaching agreement on Trump’s tax bill, as Johnson attempts to navigate a narrow and fractious majority.

Harris and Norman spoke shortly after Johnson announced the SALT agreement on CNN. 

Johnson said there is “a chance” the package could come to a vote Wednesday.

But several ultraconservatives cast doubt on that. “There’s a long way to go,” said Representative Chip Roy of Texas, another Republican hardliner.

The speaker can only lose a handful of votes and still pass the bill, which is the centerpiece of Trump’s legislative agenda.

The $40,000 SALT limit would phase out for annual incomes greater than $500,000 for the 10-year length of the bill, Lawler said. The income phaseout threshold would grow 1% a year over a decade, a person familiar with the matter said.

The cap is the same for both individual taxpayers and married couples filing jointly, the person added.

Another person described the income phase-out as gradual, so that taxpayers earning more than $500,000 would not be punished.

Several lawmakers —  New York’s Lawler, Nick LaLota, Andrew Garbarino and Elise Stefanik; New Jersey’s Tom Kean, and Young Kim of California — have threatened to reject any tax package that does not raise the SALT cap sufficiently.

The current write-off is capped at $10,000, a limit imposed in Trump’s first-term tax cut bill. Previously, there was no limit on the SALT deduction and the deduction would again be uncapped if Trump’s first-term tax law is allowed to expire at the end of this year.

Johnson’s plan expands upon the $30,000 cap for individuals and couples included in the initial version of the tax bill released last week. That draft called for phasing down the deduction for those earning $400,000 or more. That plan was quickly rejected by several lawmakers from high-tax districts who called the plan insultingly low.

The acceleration of new Medicaid work requirements could become an issue in the midterm elections — which fall just one month earlier — with Democrats eager to criticize Republicans for restricting health benefits for low-income households. 

House leaders’ initial version of legislation pushed back the new requirements until after the next presidential election.

The earlier date for the Medicaid work requirement could alienate several Republicans from swing districts concerned about cuts to the healthcare program. It is also likely to provoke a backlash in the Senate.

It will be very difficult for states to implement the work requirements in a year and a half, said Matt Salo, a consultant who advises health care companies and formerly worked for the National Association of Medicaid Directors.

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