The sale of millions of acres of federal land would provide billions of dollars to help pay for President Donald Trump’s massive package of tax cuts and spending in the Senate’s version of the bill released Wednesday night. 

As much as around 3 million acres of land owned by the Bureau of Land Management and the U.S. Forest Service would be mandated for sale in the legislation. The measure, which requires each agency to sell a small percentage of the hundreds of millions of acres of land they manage in eligible states that include Alaska as well as western states, could raise as much as $10 billion over 10 years, according to a fact sheet.

The plan is part of a broader effort to generate as much as $29 billion through a combination of expanded oil, gas, coal and geothermal lease sales, and new timber sales made public in the legislation unveiled by the Senate Energy and Natural Resources Committee. Similar energy requirements, included new energy lease sales in the coastal plain of Alaska’s Arctic National Wildlife Refuge, were included in the House version of the bill, which passed by a one-vote margin last month. 

The sale of public lands to help pay for the legislation has been a political lightning rod. A plan to sell about 500,000 acres of federal land in Utah and Nevada was stripped by the House version of the bill amid opposition from Republicans such as Montana Representative Ryan Zinke. 

The concept of public land sales has also enraged environmental and conservation groups, who say the proposal threatens wildlife as well as access to lands for outdoor recreation, hunters and fishermen. 

“It’s a travesty that Senate Republicans are putting more than 3 million acres of our beloved public lands on the chopping block to sell at fire-sale prices to build mega mansions for the ultra-rich,” said Patrick Donnelly, a director at the Center for Biological Diversity.

Republicans have said the sales are needed to provide cheap land to help address a housing crisis, and to help western states, where the government owns large swaths of federal land, to restore the areas to economic production and associated tax revenue. 

“This proposal allows a fraction of 1% of federal land to be used to build houses,” the Senate energy committee said in the fact sheet. “In doing so, it will create thousands of jobs, allow millions of Americans to realize the American dream, and reduce the deficit and fund our public lands.”

Texas Sen. Ted Cruz pitched Republican senators Wednesday on ending the Federal Reserve’s authority to pay interest to banks, claiming it would save $1.1 trillion over a decade, with members of the party’s conservative flank lauding the idea.

“I made the case directly to the president in the Oval Office last week, I made the case at lunch today,” Cruz said in an interview at the Capitol. If the idea is added to Trump’s massive tax and spending package, it could help to offset the cost and limit its impact on the deficit, Cruz said.

Cruz noted payments of interest on reserves only started in 2008 during the financial crisis but have exploded from $1 billion that year to $186 billion in 2024 as interest rates climbed.

“The case I made at lunch is we’re agonizing trying to find a $50 billion cut here and there. This is over a trillion dollars, big dollars in savings,” he said. “Half of it is going to foreign banks, which makes no sense.”

Bond purchases

The Fed first paid interest on reserve balances, or IORB, after it began its first round of large-scale bond purchases. Those purchases were aimed at stimulating the economy, but also created outsized bank reserves.

Paying interest on the swelling reserves often ensured that banks wouldn’t lend them out at a lower rate than the Fed wanted, thereby holding a floor under the overnight interbank market.

Cruz rejected the argument that the Fed needs to pay interest to help control short-term interest rates, given the payments didn’t occur before 2008.

“From 1913 to 2008, they managed to do it just fine,” he said.

Blake Gwinn, head of U.S. interest rate strategy at RBC Capital Markets, said adopting the proposal could create severe difficulties for the Fed.

“If you do it, you’re going to have to give it a lot of runway,” Gwinn said. “To end it immediately would be disastrous. To unwind this you have to have some lag time. If you don’t give it lag time, it’s going to be a huge mess.”

Barclays strategists on Monday predicted the Fed’s interest expenses would remain elevated even if lawmakers eliminated interest on reserves. In that case, they wrote, more cash would likely shift to a separate Fed program, the Overnight Reverse Repurchase Facility, that is also used to stabilize money market rates.

Cruz predicted some of the bank reserves would instead be put in short-term government debt instead, which he said would help lower interest rates and drive down the government’s interest expenses.

Two conservative holdouts on the tax bill — Rick Scott of Florida and Ron Johnson of Wisconsin — also are backing the idea, as is prominent Texas Representative Chip Roy.

Scott said he’s pitched the idea to many people to help shrink the deficit. “We have to balance the budget,” he said.

‘Really stupid’

Johnson called the Fed interest payments, especially to foreign banks, “really stupid.”

He mocked resistance from banks. “Everybody loves free federal money,” he said sarcastically. “That just locks up capital.”

Congress first authorized the U.S. central bank to pay interest on reserves in 2006 through the Financial Services Regulatory Relief Act. It was initially slated to take effect in 2011 but was pulled forward as the result of the 2008 financial crisis.

Policymakers have since added the overnight reverse repo facility — which pays interest on cash that counterparties, predominantly non-banks like money-market funds, park at the central bank — to solidify the Fed’s control over short-term rates.

But eradicating IORB could change how banks manage liquidity, potentially shifting cash back to money markets and crowding out existing participants in Treasury bills, repurchase agreements and fed funds, according to JPMorgan Chase & Co.

Money the Fed pays to banks as interest on reserves doesn’t come from congressionally appropriated funds. But the payouts do reduce the amount of money the Fed remits annually to the Treasury, funds the Treasury would otherwise be forced to borrow.

Interest paid on reserves totaled $186.5 billion in 2024, contributing to the central bank’s $77.6 billion operating loss. 

The Public Company Accounting Oversight Board today sanctioned Heaton & Co. and one of its partners, Kristofer Heaton, for failing to properly document five audits.

The firm violated AS 1215, Audit Documentation, by failing to assemble the proper documentation for five issuer audits. Two of those audits resulted in the firm making significant modifications and additions to the workpapers just before a PCAOB inspection. Although the firms generally disclosed in the workpapers that they had created and modified them after the respective completion dates, those additions and modifications were not adequately documented. 

For the other three issuer audits, one contained numerous incomplete workpapers, another contained workpapers related to a different client, and for the third, the firm created over 90% of the workpapers after the completion date upon PCOAB enforcement staff requesting them. 

“Failing, not once, but multiple times to properly document audit work, calls the integrity of the entire audit into question, and the PCAOB will take action to protect investors,” PCAOB Chair Erica Williams said in a statement.

Heaton, the engagement quality review partner on the five audits, violated AS 1220, Engagement Quality Review, by failing to evaluate whether the documentation reviewed indicated the engagement team responded appropriately to risks and supported the reached conclusions. At the time Heaton provided his concurring approval for the issuance of each audit, certain documentation either did not exist or was insufficient to indicate the engagement team had responded appropriately.

“The respondents failed to comply with multiple PCAOB rules and standards,” Robert Rice, director of the PCAOB’s division of enforcement and investigations, said in a statement. “We will continue to bring enforcement actions to address these violations and ensure that accountability is upheld at every level of the profession.”

The firm also violated PCOAB quality control standards by failing to establish, implement and monitor policies and procedures to provide reasonable assurance that firm personnel would comply with professional standards and the firm’s standards of quality. During that period, Heaton substantially contributed to those violations, in violation of PCAOB Rule 3502, Responsibility Not to Knowingly or Recklessly Contribute to Violations. 

Without admitting or denying the findings, the firm and Heaton consented to the PCAOB’s order, which:

• Censures each respondent;
• Revokes the firm’s registration with the right to apply to re-register after two years, if the firm undertakes remedial measures;
• Bars Heaton from being an associated person of a registered firm with the right to petition the Board to associate with a firm after two years, given he has completed 40 hours of continuing professional education, in addition to CPE requirements related to any professional license he holds; and,
• Imposes civil money penalties of $35,000 on the firm and $25,000 on Heaton.