Trump Loses Latest Legal Round Over Billions in Foreign Aid (1)

The Trump administration remains under a court order to spend billions in US foreign assistance funding set to expire later this month after a federal appeals court rejected the government’s request to immediately intervene.

The 2-1 order on Friday from a three-judge appeals panel is the latest setback for President Donald Trump in the fight over whether he can refuse to spend funds that Congress approved for aid programs around the world.

The Justice Department has already signaled in court papers that it is likely to ask the US Supreme Court to consider the case on an emergency basis and pause the Washington federal judge’s injunction in the coming days.

An estimated $12 billion of the $30 billion at stake in the court fight is set to expire after Sept. 30 if the State Department and US Agency for International Development don’t at a minimum commit to plans for how to use it.

The White House didn’t immediately respond to a request for comment.

Claw Back Aid

The latest action from the US Court of Appeals for the DC Circuit isn’t a final ruling on the lawfulness of efforts by Trump and other US officials to claw back foreign aid dollars, which is part of a larger push by his administration to dismantle USAID and dramatically scale back US engagement abroad.

DC Circuit Judges Cornelia Pillard and Florence Pan — appointed by former presidents Barack Obama and Joe Biden, respectively — voted to deny the government’s request to at least temporarily lift the lower court injunction. Judge Justin Walker, confirmed during Trump’s first term, notes that he would have sided with the government.

US District Judge Amir Ali ruledon Sept. 3 that the administration’s refusal to spend the aid likely violated a US law that governs how federal agencies make decisions. He previously halted the funding block under the Constitution’s separation-of-powers principles, but pivoted to other claims after a divided appeals court panel struck down that injunction.

‘Given No Justification’

The administration has “given no justification to displace the bedrock expectation that Congress’s appropriations must be followed,” Ali wrote, concluding that the defunding decisions violate the Administrative Procedure Act.

Shortly before Ali’s decision came out, Trump asked Congress to claw back more than $4 billion in foreign aid set to expire this year, including $3.2 billion from the 2024 appropriations law covered by the latest ruling, according to court filings.

Trump’s move, known as a “pocket rescission,” is timed to potentially allow him to avoid spending the money if Congress doesn’t take action by the end of September and is widely seen as a test of his ability to use the maneuver to circumvent lawmakers’ authority going forward, Bloomberg News previously reported.

In asking the DC Circuit to step in again, the Justice Department said that it has “every intention of obligating” — meaning agencies would commit to spending — the expiring funds that Trump hasn’t proposed to Congress to pull back.

Whether the executive branch can refuse to spend money that Congress appropriated “is a matter for the political branches to resolve, not for courts to inject themselves into at the behest of private plaintiffs,” government lawyers wrote.

The cases are Global Health Council v. Trump, 25-5319, and Aids Vaccine Advocacy Coalition v. Department of State, 25-5317, US Court of Appeals, DC Circuit (Washington, DC).

(Updates with background on the case.)

To contact the reporter on this story:
Zoe Tillman in Washington at ztillman2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Blumberg

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