This decision only affects completed work, not future freezes.
In a 5-4 vote, The US Supreme Court refused to bolster President Donald Trump’s foreign-aid freeze, reinstating a lower court order that requires the quick disbursement of as much as $2 billion owed to contractors for already completed work.
Key Takeaways
- The ruling forces immediate payment of $2 billion for completed work but does not prevent broader USAID cuts.
- Future freezes and funding pauses are still possible but may face legal challenges under the APA.
- The ruling does not permanently restore funding, but it creates a legal pathway for future lawsuits if the Government halts disbursements unlawfully.
- Trump’s broader foreign aid policy remains largely intact, though judicial pushback may limit some of its implementation.
As Jonathan Turley notes;
The key here is that this was a controversial move to review a TRO, which is generally not reviewable. What is clear is that there are four justices who were still prepared to do so and would obviously be likely to grant review in the next round.
That next round would come after the hearing on the preliminary injunction, which is scheduled for March 6th.
It can then be appealed to these awaiting justices. Only four are needed to grant review, so you do the math.
Over four dissents, the justices rejected Trump’s request to toss out the trial court order, which affects money owed by the US Agency for International Development and State Department.
The dissent by Justices Alito, Thomas, Gorsuch, and Kavanaugh was extremely strongly worded:
Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars?
The answer to that question should be an emphatic “No,” but a majority of this Court apparently thinks otherwise.
I am stunned.
…
Today, the Court makes a most unfortunate misstep that rewards an act of judicial hubris and imposes a $2 billion penalty on American taxpayers.
The District Court has made plain its frustration with the Government, and respondents raise serious concerns about nonpayment for completed work. But the relief ordered is, quite simply, too extreme a response.
A federal court has many tools to address a party’s supposed nonfeasance.
Self-aggrandizement of its jurisdiction is not one of them.
I would chart a different path than the Court does today, so I must respectfully dissent.
Chief Justice John Roberts and Justice Barrett sided with the liberal members of the court.
The majority told the trial judge to reset the deadlines for paying the money since his original deadline has now passed.
This decision only affects completed work, not future freezes.
The ruling compels the Government to release funds for work that had already been completed before February 13, 2025. However, it does not block the administration from continuing to pause or cut future foreign assistance. Trump’s broader agenda of cutting USAID funding may continue for projects that were not yet underway.
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The Government Accountability Office Fraud Report, and DOGE
The GAO reported in April of 2024 that the federal government loses an estimated $233 to $521 billion annually to fraud. If these numbers are in the ballpark, two questions arise: How to detect the fraud, and once detected, how to avoid the allocation of fraudulent funds that Congress has already approved?
It is possible that if the numbers are confirmed, and the money not subsequently spent, that President Trump may be right stating that the federal debt may not be such an insurmountable problem as the $36 trillion number would suggest. Figure that every two to four years spending would be diminished by one trillion dollars by fraud detection alone.
Having established fraud detection, let’s spend more time on the second question introduced above. The Trump administration is presently exploring whether the President can decide not to spend funds that Congress already approved in legislation.
About this, five Treasury Secretaries under Democratic administrations penned a New York Times op-ed on February 10 stating that they were never directed to “stop congressionally appropriated funds from being paid out in full … We take the extraordinary step of writing this piece because we are alarmed about the risks of arbitrary and capricious political control of federal payments, which would be unlawful and corrosive to our democracy.” Surprisingly, Janet Yellen, who signed the Times op-ed, makes no reference to the GAO assessments, published while she was Secretary of Treasury:
Wasn’t it more corrosive to democracy to tolerate the $230-$500 billion yearly fraud, estimated by the GAO while she, or her previous Democratic counterparts were in charge?
As of now, the Impoundment Control Act of 1974 (ICA) restricts the President’s ability to decide unilaterally not to spend money that Congress already voted for. The Courts, Supreme Court included, have repeatedly rejected Presidents’ attempts to spend less than Congress-approved allocations even before the 1974 Act – except in one case. If the agency responsible for the spending can be shown to be able to accomplish the mandate at a lower price than what Congress approved – say building bridges, dams – then the President has the authority to prevent the difference from being spent. For a layman “fraud” appears to be such an exception.
But how can it be detected? This question brings us to the present debate about what DOGE can and cannot do.
The GAO report made the following recommendations to the Office of Management and Budget (OMB). One was to “improve the availability of fraud-related data.” According to the GAO, the OMB should collaborate with the Council of the Inspectors on Integrity and Efficiency (CIGIE). The other one was for the Treasury to expand “government-wide fraud estimation, in consultation with the OMB.” The OMB and the Treasury agreed with the recommendations.
As far as I could find, the above recommendations resulted in further paper shuffling – and no action. In a July 2024 update, OMB stated “that it has not started action … but plans to,” and will work with an “oversight community to develop a plan.” OMB also “acknowledged the need for improved data collection and reporting at the agency and program levels.”
The July update stated that work was not started on this either. Ms. Yellen’s Treasury “indicated that it concurred with the recommendation that it establish an effort to evaluate and identify method to expand government-wide fraud estimation to support fraud risk-management.” So far, nothing appears to have been done, with the GAO concluding that “We will continue to monitor Treasury’s progress with this effort.”
It sounds like bureaucratic satire, but I am quoting verbatim. The question now is whether DOGE can have access to the Treasury data, relying on the Government Accountability Office’s own April 16, 2024 document – researched and published under a Democratic Administration?
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