Trump Administration Scraps $1.8B Fund for Allies
WASHINGTON — The Trump administration is scrapping plans for a $1.776 billion “Anti-Weaponization Fund” that would have compensated allies of the president, Acting Attorney General Todd Blanche announced Tuesday, marking a dramatic retreat after the proposal sparked bipartisan backlash, a federal court injunction, and a revolt among Senate Republicans.
“We are not moving forward with the fund, period,” Blanche told the House Appropriations subcommittee during a hearing on the Justice Department’s budget, according to AP News. When pressed by Rep. Grace Meng (D-NY) whether that meant “not moving forward ever,” Blanche replied simply: “Correct.”
The Fund’s Origins and Swift Collapse
The $1.776 billion fund — a figure deliberately referencing 1776, the year of American independence — was created just two weeks earlier as part of a settlement resolving President Donald Trump’s $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns. The fund was intended to compensate individuals who believed they had been unfairly targeted by the federal criminal justice system under the Biden administration.
But the proposal quickly unraveled. A federal judge in Virginia temporarily halted the fund’s creation on May 29, setting a June 12 hearing. Senate Majority Leader John Thune (R-SD) publicly declared he was “not a big fan” of the fund, telling BBC News he did not see “a purpose” for it. Thune’s opposition proved pivotal: Senate Republicans left Washington without passing a $72 billion immigration enforcement package after Democrats threatened amendments to scrap the fund.
Former Vice President Mike Pence also weighed in, calling the fund a “bad idea from the start.”
Bipartisan Fury
Democrats condemned the fund in scathing terms. Rep. Rosa DeLauro (D-CT) called it “a corrupt payout scheme for the president and his political allies” and told Blanche he was “at the center” of “the most brazen acts of flagrant corruption” she had ever seen. Sen. Patty Murray (D-WA) said the fund represented “corruption that has never been more blatant or more widespread,” adding: “American taxpayers who are already being whacked with high prices are going to foot the bill.”
A major source of controversy was the potential for the fund to compensate individuals convicted in connection with the January 6, 2021, attack on the U.S. Capitol. Blanche had refused to publicly rule out that people convicted of violent acts on January 6 could receive payouts, alarming lawmakers from both parties.
What Remains of the Deal
Crucially, while the compensation fund is being scrapped, the broader settlement with the IRS remains intact. Blanche confirmed that “nothing has changed” regarding the agreement that bars the IRS from pursuing audits of Trump, his family, and his business interests for past tax returns. This means Trump retains the primary benefit of the settlement — protection from IRS scrutiny — while abandoning the politically toxic fund.
Credibility Questions
Blanche’s oral commitment to scrap the fund was not accompanied by a written order or formal legal document. Rep. Meng pressed him to put the commitment in writing, but Blanche refused, saying a hearing transcript would suffice. “I’m not committing to putting anything in writing,” he said, according to BBC News. “I don’t know what the purpose is of putting something in writing. I’m telling you what we are doing.”
Skye Perryman, president and CEO of Democracy Forward — which filed one of the lawsuits against the fund — responded: “If you can say it on TV, you should say it in court.”
Broader Implications
The episode marks a significant moment in the relationship between the White House and congressional Republicans. Thune’s willingness to break publicly with Trump on the fund may signal a shift in dynamics, as Senate Republicans asserted their independence on an issue that threatened to become a political liability.
Senate Democratic Leader Chuck Schumer (D-NY) pledged to push legislation to permanently ban such funds, saying: “We will make sure that it’s dead and can’t be revived — just like we did with Trump’s ballroom.”
What’s Next
The June 12 court hearing on the injunction may now be rendered moot, though the judge could still issue a ruling. Without a formal written rescission, questions remain about whether the fund could theoretically be revived. For now, the administration has backed down on one of its most controversial proposals — but the underlying legal protections for the president remain firmly in place.