In a high-stakes legal battle that has gripped Washington and the international aid community alike, a federal appeals court has delivered a decisive blow to President Donald Trump’s attempt to withhold nearly $5 billion in congressionally approved foreign aid. The ruling, handed down on September 6, 2025, by the U.S. Court of Appeals for the District of Columbia Circuit, upholds a lower court’s order that the administration must promptly release and spend the funds as originally intended by Congress.
The case centers on Trump’s use of a rare budgetary maneuver known as a "pocket rescission," which sought to claw back $4.9 billion in funding allocated to the State Department and the U.S. Agency for International Development (USAID). According to Nexstar Media, Trump notified Congress of his intention to enact the rescission in late August, setting off alarms among lawmakers and aid organizations who rely on timely federal disbursements for critical projects worldwide.
The three-judge panel’s decision was split 2-1, with Justices Cornelia Pillard (an Obama appointee) and Florence Pan (appointed by President Biden) siding with the lower court, while Judge Justin Walker, a Trump appointee, dissented. The panel offered little elaboration, stating simply that the administration had not "satisfied the stringent requirements for a stay pending appeal." This left the lower court’s ruling intact, compelling the administration to release the funds immediately.
At the heart of the legal dispute is the fundamental question of whether the executive branch can unilaterally withhold funds that Congress has already appropriated. U.S. District Judge Amir Ali, who issued the pivotal 43-page ruling on September 3, minced no words in his condemnation of the administration’s actions. "Defendants have given no justification to displace the bedrock expectation that Congress’s appropriations must be followed and that absent a ‘claim of unconstitutionality that has not been rejected by final Court order, the Executive must abide by statutory mandates,’" Ali wrote, as reported by OANN and Nexstar Media.
Judge Ali further emphasized that merely requesting Congress to rescind the $4 billion was insufficient. "Spending should proceed unless Congress affirmatively acts to stop it," he declared. This principle, he argued, is essential to maintaining the constitutional balance of powers—especially Congress’s "power of the purse."
The Trump administration’s strategy hinged on the argument, advanced by budget director Russell Vought, that the president could withhold funds for up to 45 days after requesting a rescission. This period, conveniently, would extend past the end of the fiscal year on September 30, 2025, at which point the funds would expire if unspent. The White House asserted that this tactic was last used in 1977, suggesting a precedent for the maneuver, as noted by OANN and Reuters.
However, critics from both sides of the aisle swiftly rejected the administration’s approach. Senate Appropriations Committee Chair Susan Collins (R-Maine) described the effort as an "attempt to undermine the law," according to Nexstar Media. Aid groups, many of which had planned projects based on the anticipated funding, filed suit to prevent the administration from withholding the money. The case quickly escalated, with the courts moving rapidly to ensure the funds could be spent before their expiration date.
The funds in question were earmarked for a range of initiatives, including foreign aid, United Nations peacekeeping operations, and democracy-promotion efforts overseas. The dispute also highlighted the Trump administration’s broader approach to foreign assistance, with reports from Reuters and OANN noting that the administration had already dismantled significant portions of USAID, further complicating the disbursement process.
During the litigation, the Trump administration indicated it would spend $6.5 billion of the appropriated funds for 2024 but moved to withhold $4 billion specifically from USAID. This selective spending drew additional scrutiny from both courts and lawmakers, who questioned the administration’s authority to pick and choose which congressional mandates to follow.
The legal battle also reached the U.S. Supreme Court, which, as Reuters reported, had already intervened once to require the Trump administration to pay foreign aid organizations for work they had already performed. This rare step by the high court underscored the gravity of the constitutional questions at stake and the urgency of ensuring that federal appropriations are honored.
Judge Ali’s ruling was particularly scathing in its assessment of the administration’s legal arguments. "There is not a plausible interpretation of the statutes that would justify the billions of dollars they plan to withhold," he wrote, making clear that the executive branch cannot simply ignore the will of Congress.
For its part, the White House maintained that the pocket rescission was a legitimate tool and pointed to the 1977 precedent. Yet, many legal experts argued that the maneuver amounted to an unlawful seizure of funds and a dangerous attempt to bypass Congress’s constitutional authority. As OANN noted, the tactic was seen by some as an "unlawful seizure of funds that attempts to bypass Congress’s ‘power of the purse.’"
With the appeals court’s decision now standing, the Trump administration faces a rapidly closing window to comply with the court’s order and release the remaining funds before they expire at the end of September. The courts, for their part, have made clear that the executive must act swiftly, with Judge Ali stating he ruled quickly to "provide higher courts time to weigh in before the funds reach their expiration dates."
This episode has reignited debate in Washington over the appropriate limits of presidential power in budgetary matters. Supporters of the court’s decision argue that it reaffirms the essential role of Congress in controlling federal spending and prevents the executive from unilaterally overriding legislative intent. Detractors, however, warn that the ruling could hamper the president’s ability to respond flexibly to changing international circumstances, particularly when it comes to foreign aid and diplomacy.
As the dust settles from this latest round of legal wrangling, one thing is clear: the constitutional principle that Congress controls the purse strings remains firmly intact. The Trump administration’s attempt to sidestep that authority has not only failed in the courts but also sparked a renewed conversation about the delicate balance of power at the heart of American democracy. The coming weeks will determine whether the administration complies fully with the court’s order—or whether further legal and political battles lie ahead.
