Supreme Court Rejects Trump on USAID Foreign-Aid Freeze (3)

A divided US Supreme Court dealt a blow to President Donald Trump’s foreign-aid freeze, reinstating a lower court order that requires the quick disbursement of as much as $2 billion owed to contractors for already completed work.

Over four dissents, the justices on Wednesday rejected Trump’s request to toss out the order. In a one-paragraph decision that gave little explanation, the majority told a federal trial judge to “clarify what obligations the government must fulfill” since his original payment deadline has now passed.

Chief Justice John Roberts and Justice Amy Coney Barrett joined the three liberals in the majority. Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh dissented. Alito wrote for the group that he was “stunned” by the decision.

Donald Trump, left, greets John Roberts as he arrives to address a joint session of Congress on Tuesday.

Photographer: Al Drago/Bloomberg

Humanitarian groups say the money from the US Agency for International Development and State Department is urgently needed. They say the freeze is upending hundreds of projects, forcing partner groups to lay off or furlough thousands of US workers and putting people who depend on the assistance at risk of disease and death.

The exact effect of the Supreme Court action remains to be seen, given the administration’s broad resistance to foreign aid, even in the face of court orders. US District Judge Amir Ali, appointed to the Washington bench by former President Joe Biden, will hold a hearing on Thursday on whether to order a more sweeping, longer-term injunction.

Still, the Supreme Court’s move hints at a willingness to serve as a check on Trump as he asserts sweeping power to overhaul the government and slash spending even in areas where Congress has appropriated money. It also suggests the court in at least some cases is prepared to stand behind trial judges who conclude the administration might be violating the law.

The order is the court’s biggest Trump-related move since his Jan. 20 inauguration. The justices previously declined to let the president immediately fire the head of a federal whistleblower agency, though they didn’t directly reject Trump’s request. More than 100 lawsuits have been filed in an effort to rein in Trump and Elon Musk, the Tesla Inc. and SpaceX co-founder who is directing much of the overhaul.

Short Deadline

In an order last week, Ali gave the administration 36 hours to pay for work performed before Feb. 13. Ali issued that directive after aid groups offered evidence the administration wasn’t complying with his earlier temporary restraining order, which had told the government to lift the payment freeze.

Trump’s team told the Supreme Court that it can’t comply with Ali’s follow-up order on such a short time frame. The legal fight is happening at the same time the administration has fired or put on leave thousands of staff members of USAID, the source of most of the disputed funds.

The Supreme Court said Ali, when he revisits the case, should give “due regard for the feasibility of any compliance timelines.”

Alito blasted the decision as “a most unfortunate misstep that rewards an act of judicial hubris and imposes a $2 billion penalty on American taxpayers.”

The State Department did not immediately respond to a request for comment on Wednesday morning.

The decision “confirms that the administration cannot ignore the law,” said the lead lawyer for the groups, Lauren Bateman of Public Citizen Litigation Group, in an emailed statement. “To stop needless suffering and death, the government must now comply with the order issued three weeks ago to lift its unlawful termination of federal assistance.”

‘Freeze’ Disclaimed

In court papers, acting US Solicitor General Sarah Harris said the administration had begun making individual payments and decided to retain 500 USAID awards, while canceling 5,800. The State Department is keeping 2,700 awards and terminating 4,100, she said.

“The ‘funding freeze’ is not continuing; it is over,” she said. “The Department of State and USAID have now largely completed their individualized review of all funding awards and decided to retain thousands of awards, rendering respondents’ original challenge to the blanket ‘freeze’ moot.”

The aid groups blasted the administration’s claims that making quick payments isn’t feasible, telling the high court the government was seeking to “leverage its procrastination.”

Ali’s order was a legitimate step “to ensure compliance with one aspect of a TRO that the government had openly flouted for nearly two weeks,” the groups argued.

Roberts had temporarily paused Ali’s order a week ago to give the full court time to consider Trump’s request to lift the order altogether.

The order comes as the administration radically reshapes US foreign policy. Trump’s team has axed foreign assistance contracts and continues to dismantle USAID, which managed $43 billion and had 10,000 staff members in 2023 but has seen thousands of agency employees furloughed, fired or recalled from postings abroad since Trump took office.

The groups in their lawsuit say that by freezing funds appropriated by Congress, the administration is violating the Constitution’s separation of powers as well as the federal law that governs the procedures used by administrative agencies.

The case is Department of State v. AIDS Vaccine Advocacy Coalition, 24A831.

(Adds reaction from lawyer for aid groups in 13th paragraph.)

--With assistance from Zoe Tillman and Iain Marlow.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Peter Jeffrey

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