Trump Wins Appeal Allowing Foreign Aid Freeze

A federal appeals court on Wednesday ruled that President Donald Trump can withhold nearly $2 billion in previously approved foreign aid payments, delivering a significant legal win to his administration’s effort to scale back the U.S. Agency for International Development.

The U.S. Court of Appeals for the District of Columbia voted 2-1 to overturn a lower court’s order requiring the administration to pay out the funds, which were frozen earlier this year. Judge Karen L. Henderson, appointed by former President George H.W. Bush, wrote for the majority that the plaintiffs, a coalition of contractors and nonprofit organizations, lacked legal standing to challenge the freeze.

The ruling follows what Trump and his supporters saw as an early blow by the Supreme Court in March, after a majority of the justices temporarily allowed the payments to proceed over the dissent of four Republican-appointed justices who warned that taxpayers might never recover the money if the Trump administration went on to win its case.

Henderson wrote that the grantees of the aid do not “have a cause of action under the [Administrative Procedures Act] because APA review is precluded by the Impoundment Control Act.”

Henderson added that “the grantees may not reframe this fundamentally statutory dispute as” an action that goes beyond the administration’s legal authority, handing the administration a key victory in its efforts to cut what it sees as wasteful spending and government bloat.

The case drew support from a coalition of 20 state attorneys general led by Republican South Carolina Attorney General Alan Wilson, who argued that the president has broad authority to ensure taxpayer dollars serve U.S. interests.

“This is a major victory against the D.C. activist class that thinks they can run America’s foreign policy from a courtroom,” Wilson said in a statement. “The President has every right to ensure that taxpayer dollars actually serve American interests. For too long, foreign aid has been treated like a bottomless slush fund for global NGOs and D.C. insiders. That ends now.”

Wilson said the ruling affirmed that foreign policy decisions should rest with “leaders elected to represent the American people” rather than “private organizations with contracts.” He added that the decision allows the Trump administration to continue reviewing foreign assistance programs to ensure spending aligns with national priorities.

Judge Florence Pan, appointed by former President Joe Biden, issued a lengthy dissent warning that the majority’s decision undermines Congress’s power of the purse and enables the executive branch to bypass constitutional safeguards.

Pan noted that on his first day of his second term, Trump ordered a sweeping halt to foreign aid disbursements that were “not fully aligned” with his foreign policy, leading to what she described as “catastrophic consequences for the grantees and the people that they serve.” She accused the appeals court majority of “misconstru[ing] the separation-of-powers claim” and “allow[ing] Executive Branch officials to evade judicial review of constitutionally impermissible actions.”

“The majority holds that when the President refuses to spend funds appropriated by Congress based on policy disagreements, that is merely a statutory violation and raises no constitutional alarm bells,” Pan wrote. “But the factual scenario presented plainly implicates the structure of our government and the roles played by its coordinate branches — roles that are defined by the Take Care Clause, the Appropriations Clause, the Spending Clause, and the vesting clauses of Articles I and II.”

She cited long-standing precedent that the executive branch “has no authority to disobey duly enacted statutes for policy reasons” and argued that the court should have affirmed the district court’s ruling requiring the administration to release the funds.

Shortly after beginning his second term, Trump moved to dismantle USAID and other sources of foreign spending, sparking backlash from aid groups that warned of “immediate and irreparable harm” from the cuts. The administration argued the freeze was necessary to reevaluate whether the billions of dollars spent annually through USAID advanced U.S. diplomatic and security objectives.

The legal dispute began in February when U.S. District Judge Amir Ali, a Biden appointee, blocked the administration from halting the payments and later ordered the $2 billion disbursed within two days.

After an initially fast appeal by the Trump administration to the Supreme Court, a majority of the justices declined at the time to vacate that order. However, Wednesday’s ruling lifts it entirely, giving the administration the green light to cut billions of dollars in foreign aid.