Federal Appeals Court Allows Trump to Cut Billions in Owed USAID Funds

In a ruling that delivers a huge win for President Donald Trump, a federal appeals court cleared the way for the administration to slash nearly $2 billion in foreign aid payments that had previously been frozen.

The 2-1 decision from the U.S. Court of Appeals for the D.C. Circuit overturned a lower court’s injunction, which had forced Trump’s team to resume payments on USAID projects approved by Congress.

Judge Karen L. Henderson, a George H.W. Bush appointee, wrote for the majority that the plaintiffs lacked proper grounds to sue over the Trump administration’s decision, citing the Impoundment Control Act and limitations on statutory claims.

She concluded that the plaintiffs failed to prove Trump had exceeded his executive authority. Judge Greg Katsas, a Trump appointee, joined Henderson in the majority opinion, as Fox News reported.

“This ruling is a major victory for President Trump,” legal analysts noted, pointing to his January executive order that sought to block nearly all foreign aid spending as part of a crackdown on waste, fraud, and abuse.

The court’s ruling comes after months of legal battles, sparked by the abrupt freeze on nearly $2 billion in USAID payments earlier this year. Critics warned that halting aid could hurt U.S. credibility abroad, harm economic stability in recipient countries, and create new security risks.

Trump supporters hailed the decision as a victory for fiscal responsibility. “Does a single district-court judge have the power to compel the U.S. government to pay out $2 billion taxpayers’ dollars? The answer is no,” Justice Samuel Alito wrote in a dissent to the previous Supreme Court review, joined by Justices Clarence Thomas, Neil Gorsuch, and Brett Kavanaugh.

The ruling could have far-reaching implications for U.S. foreign policy, as the Trump administration moves to review and potentially restructure USAID programs. Critics fear the cuts may complicate humanitarian and development projects worldwide, while supporters argue it’s a necessary step to eliminate wasteful spending.

The decision also underscores the ongoing tension between Trump’s executive priorities and legal challenges from Congress and outside groups. Observers say this is not the final word, as plaintiffs may attempt to appeal the decision to the full appeals court.

Despite the controversy, the Trump administration has emphasized its goal of tightening oversight and prioritizing taxpayer funds. “This is about responsible spending and ensuring every dollar works effectively,” a White House official said.

The ruling allows Trump to continue his freeze on USAID funds, which had been intended to overhaul the agency and cut waste.

Critics, including foreign aid groups, warn that stopping payments abruptly could cause “immediate and irreparable harm” to projects and risk creating obstacles for U.S. businesses in foreign markets.

The decision also underscores Trump’s executive priorities in reducing foreign aid spending.

Since taking office, Trump has argued that nearly all foreign aid is subject to abuse and corruption, especially in countries with higher risks of mismanagement. Observers note that this ruling could empower the administration to review and restructure hundreds of ongoing USAID programs, reshaping U.S. foreign aid policy for the remainder of his term.

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