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President Trump’s $1.8bn taxpayer payout plan was abandoned Tuesday after an intense Republican revolt threatened to derail key immigration legislation.
President Donald Trump’s plan to distribute $1.8bn (£1.3bn) in taxpayer funding to political allies lasted only two weeks before the Department of Justice (DOJ) officially abandoned the idea. The collapse of this initiative occurred on Tuesday, following an intense backlash from Republicans in Congress who threatened to derail a critical immigration bill if the administration did not drop the plan.
The justice department's decision to end the program followed a significant revolt within Trump's own party. Lawmakers were particularly angered by the potential for public funds to go to Trump supporters, including those who participated in the January 6, 2021, attack on the US Capitol. Republican lawmakers and Trump allies viewed the controversy as an unforced error at a time when the president and his party could least afford one. A former Trump adviser, who requested anonymity to speak candidly, described the situation as a "total self-inflicted wound and completely unnecessary," suggesting the president's "myopic view" led him to act regardless of the harm to Republicans.
The fund was part of a settlement over a lawsuit Trump had dropped against the IRS. It was designed to pay individuals the administration deemed unjustly targeted by the Biden administration. The agreement also included a provision banning current tax audits of Trump and his family and businesses. While the administration argued the fund was necessary to "make whole" Americans wrongly prosecuted in the past, Republicans and Democrats alike criticized the audit ban as corrupt. The controversy escalated when administration officials refused to rule out paying January 6 rioters.
On Tuesday, Acting US Attorney General Todd Blanche announced that the provision shielding Trump and his family from tax audits would remain in place. This decision further angered Republicans, who demanded the provision be scrapped. The firestorm over the fund represents a broader trend in Trump’s second term: the willingness of some Republicans to push back when they feel the president’s attempts to expand power, reward allies, and punish opponents have gone too far.
Trump is currently grappling with an unpopular war in Iran, high gas prices, and low approval ratings that could negatively impact Republicans in the midterm elections. The fund controversy is just the latest example of resistance against the president. Since returning to office, Trump has faced pushback multiple times. Last month, several Senate Republicans joined Democrats in passing a war powers resolution to limit the length of the conflict with Iran. Although a similar resolution has not passed the House, it signaled a shift in Republican behavior.
This resistance mirrors previous conflicts, such as when Republicans voted last year to force the Justice Department to release files related to the late sex offender Jeffrey Epstein. The White House had to spend months containing Republican anger over the Epstein scandal before Trump finally bowed to pressure. In contrast, the condemnation of the DOJ fund was swift and appeared to catch Trump and his top aides off guard. Senate Republicans criticized the fund in a contentious private meeting on May 21 with Blanche. Republican Senator Ted Cruz noted that Republicans were "blasting the attorney general" during their podcast appearance on Verdict.
Republicans stalled progress on legislation to fund US Immigration and Customs Enforcement (ICE) and Customs and Border Patrol (CBP). This action sent a clear message that the planned fund could unravel a long-delayed spending plan for two key immigration agencies. When lawmakers returned to Washington, Senate Majority Leader John Thune urged the administration to end its plans. "The best way to handle it is if the administration decides to shut it down themselves," Thune told reporters at the Capitol on Monday.
The mounting Republican opposition coincided with Democrats vowing to hold up the immigration bill over the fund. Several groups also filed lawsuits in court to block the program. This created a rare moment of bipartisan anger in Washington. While Democratic outrage was expected, the lack of public defense from Republicans was notable. Many stalwart supporters of the president remained silent or critical.
The uproar sparked another test for the courts, where legal battles over Trump’s expansion of executive power have been frequent. On Friday, a federal judge ordered the justice department to suspend the fund to allow a lawsuit against it to move forward. The justice department temporarily suspended the compensation scheme on Monday, citing the court decision. Critics, including some Republicans, demanded the administration go further and make clear it was giving up on the idea altogether.
Blanche finally pulled the plug on Tuesday, telling House lawmakers, "We're not moving forward with the fund." However, this likely isn't the end of the saga. Blanche told lawmakers he wasn't "committing to putting anything in writing," a move some interpreted as leaving the door open to return to the issue. Critics vowed to press forward with legal challenges regardless. Norm Eisen, co-founder of the Democracy Defenders Fund, stated that litigation provides a safeguard to ensure Trump does not revive the idea.
Democrats have also vowed to introduce amendments to the immigration bill that would prevent presidents from using taxpayer dollars to reward political allies. The issue has already become a flashpoint on the left and will surely feature in Democratic campaign ads against Trump this fall ahead of the crucial midterm elections. The collapse of the Republican revolt over the fund demonstrates that Trump does not have an ironclad grip on his party in his second term. The administration may want to move on, but the issue will not disappear anytime soon.
The abandonment of the fund marks a significant shift in legislative dynamics. As midterm elections approach, Republican lawmakers are increasingly willing to sacrifice short-term political gains to protect their legislative priorities, such as immigration funding. This trend suggests a more constrained executive branch, where presidential authority is actively checked by both legal challenges and intra-party dissent. Future administrations may find that rewarding allies through taxpayer funds carries far higher political and legal costs than anticipated, leading to more cautious exercises of executive power in upcoming policy decisions.
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