Trump’s Bid to Slash Foreign Aid Faces Legal Showdown

Trump’s Bid to Slash Foreign Aid Faces Legal Showdown
  • calendar_today August 24, 2025
  • Business

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In a court filing late Tuesday, lawyers for the Trump administration asked the Supreme Court to allow it to block billions of dollars in foreign aid spending that Congress had already approved. The development moves the USAID spending fight back to the nation’s highest court for the second time in six months.

The nearly $12 billion in aid at the heart of the legal dispute is earmarked for the U.S. Agency for International Development and must be spent before the fiscal year ends on Sept. 30. President Donald Trump acted quickly after he returned to the White House in January, signing an executive order on his first day back in office ordering the federal government to put almost all foreign aid spending on hold.

The president said the freeze was the first step in a sweeping plan to root out “waste, fraud, and abuse” in overseas spending.

The order was immediately challenged in federal court. In February, U.S. District Judge Amir Ali in Washington, D.C., issued an injunction blocking the Trump administration from halting the spending on the projects. Judge Ali found that the White House was required to move forward on releasing the money that Congress had already authorized. The Trump administration, he said, was “obligated to resume payments on billions of dollars in USAID grants.”

The Trump administration appealed. U.S. Court of Appeals for the D.C. Circuit heard arguments in the case earlier this month and, in a 2-1 decision, overturned the lower court’s ruling. Writing for the majority, Judge Karen L. Henderson, a George H.W. Bush appointee, said the plaintiffs in the case — foreign aid groups trying to restore their grant payments — lacked the necessary legal standing to sue the administration. Henderson wrote that the aid groups lacked an appropriate “cause of action” under what is known as the doctrine of impoundment.

Despite the Trump administration’s victory in the appeals court earlier this month, the court has not yet issued a so-called mandate that would give its decision legal effect. The absence of that mandate has left Judge Ali’s ruling — and the schedule he established for restarting the payments — in place for the time being. The Trump administration, for its part, is now in a race against time to stop itself from being forced to spend the full $12 billion before the fiscal year comes to a close on Sept. 30.

In the new filing on Tuesday, U.S. Solicitor General D. John Sauer argued that the administration is now at risk of being forced to “rapidly obligate some $12 billion in foreign-aid funds” by the end of the fiscal year if the justices do not step in to block the payments. Sauer wrote that he did not expect the federal courts to play a role in settling the larger spending dispute and urged the justices to let the political branches of government handle the matter.

“Congress did not upset the delicate interbranch balance by allowing for unlimited, unconstrained private suits,” he wrote in the filing, adding that “any lingering dispute about the proper disposition of funds that the President seeks to rescind shortly before they expire should be left to the political branches, not effectively prejudged by the district court.”

The plaintiffs in the case, which is comprised of a collection of foreign aid groups that depend on USAID grants, say just the opposite. In their view, the president does not have the power to unilaterally block funds that Congress has already approved in appropriations bills. The key laws they point to as underpinning their case are the Impoundment Control Act (ICA), which Congress passed in the 1970s to curb presidential discretion over federal spending, as well as the Administrative Procedure Act.

Legal experts say the dispute will also test the limits of the president’s broader authority to control the purse strings — and whether the White House can force Congress to put the brakes on spending even after lawmakers have already given the green light.

The Supreme Court has already weighed in on a similar dispute, issuing a narrow 5-4 ruling in the case earlier this year. With a fiscal deadline just weeks away, and billions of dollars in spending on the line, the justices are being asked to wade back into the fight once again.

The foreign aid case has become part of a larger effort by the Trump administration to reorient U.S. spending priorities and wrest control over how money is distributed to international partners. The legal fight over that authority, aid organizations say, is a matter of life or death. Projects around the world that depend on USAID grants are already being curtailed, and without funding, more could be shut down altogether.

In an interview with The Intercept, Jennifer Dunlap, the executive director of International Medical Corps, said Trump’s spending freeze has had an “immediate and devastating” impact on her organization’s ability to provide humanitarian assistance and medical services overseas. Dunlap said that already at risk are new projects the organization was set to launch in Africa, which “would be put on hold or gone” without the aid funds.

In the coming days, the Trump administration will be asking the Supreme Court to deliver a ruling that could force Dunlap and her colleagues to scramble even harder to make up for the shortfall.