A federal appeals court has delivered a significant legal victory to President Donald Trump's administration in its effort to scale back foreign spending.
The U.S. Court of Appeals for the District of Columbia voted 2-1 on Wednesday to overturn a lower court's order requiring the administration to pay out nearly $2 billion in previously approved foreign aid payments. According to the Washington Examiner, the funds were frozen earlier this year as part of Trump's broader effort to dismantle the U.S. Agency for International Development.
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 supporters saw as an early setback when the Supreme Court temporarily allowed the payments to proceed in March.
Henderson determined 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." The judge added that the grantees could not reframe the statutory dispute as an action that goes beyond the administration's legal authority.
This legal reasoning handed the administration a key victory in its efforts to cut what it considers 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. Wilson argued that the president has broad authority to ensure taxpayer dollars serve U.S. interests rather than private organizations with contracts.
"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. 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. She argued that the ruling enables the executive branch to bypass constitutional safeguards designed to maintain separation of powers.
Pan noted that Trump ordered a sweeping halt to foreign aid disbursements on his first day of his second term, targeting programs not "fully aligned" with his foreign policy. She described this as having "catastrophic consequences for the grantees and the people that they serve" and accused the appeals court majority of allowing executive branch officials to evade judicial review. The dissenting judge cited long-standing precedent that the executive branch "has no authority to disobey duly enacted statutes for policy reasons."
"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. She 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. The administration argued the freeze was necessary to reevaluate whether billions of dollars spent annually through USAID advanced U.S. diplomatic and security objectives. Aid organizations warned of "immediate and irreparable harm" from the cuts to programs serving vulnerable populations worldwide.
The legal dispute began in February when U.S. District Judge Amir Ali, a Biden appointee, blocked the administration from halting the payments. Ali later ordered the $2 billion disbursed within two days, prompting the administration to appeal. After the Trump administration's initial fast appeal to the Supreme Court, a majority of the justices declined to vacate Ali's order at the time.
However, Wednesday's ruling lifts the lower court's order entirely, giving the administration the green light to cut billions of dollars in foreign aid. The decision represents a significant shift in how foreign assistance programs may be managed and reviewed by future administrations.
The ruling raises broader questions about the balance of power between Congress and the executive branch regarding federal spending decisions. Wilson emphasized that foreign policy decisions should rest with "leaders elected to represent the American people" rather than private organizations holding government contracts. The South Carolina attorney general's statement reflects the administration's view that the president has constitutional authority to align spending with policy priorities.
Pan's dissent highlighted concerns about constitutional provisions, including the Take Care Clause, the Appropriations Clause, and the Spending Clause. She argued that these constitutional frameworks define the roles of coordinate branches of government and prevent executive overreach. The dissenting judge warned that the majority's interpretation could set a dangerous precedent for future administrations seeking to bypass congressional appropriations.
The appeals court decision comes as the Trump administration continues its broader review of foreign assistance programs and government spending priorities. This ruling provides legal backing for the administration's efforts to reshape America's international aid commitments and could influence how future presidents approach foreign policy funding decisions.
