On Friday, September 5, 2025, a federal appeals court delivered a significant blow to President Donald Trump’s administration, ruling 2-1 against its attempt to withhold nearly $5 billion in foreign aid that Congress had already approved. The decision, handed down by the U.S. Court of Appeals for the District of Columbia Circuit, came after weeks of mounting legal challenges and political controversy over the administration’s use of a rarely invoked maneuver known as a “pocket rescission.”
The panel’s majority, consisting of Justices Cornelia Pillard and Florence Pan—appointees of former Presidents Barack Obama and Joe Biden, respectively—refused to block a lower court’s earlier ruling that the administration must release the preapproved funding. Judge Justin Walker, appointed by Trump, dissented. The court offered little elaboration, stating simply that the “appellants have not satisfied the stringent requirements for a stay pending appeal,” as reported by The Hill.
This ruling capped a tumultuous week for the White House, which had sought to claw back $4.9 billion allocated to the State Department and the U.S. Agency for International Development (USAID) in late August. The administration’s move drew immediate bipartisan criticism, with Senate Appropriations Committee Chair Susan Collins (R-Maine) denouncing it as an “attempt to undermine the law.” According to Reuters and The New York Times, Collins’s rebuke reflected growing unease on Capitol Hill over the executive branch’s efforts to circumvent congressional authority on spending matters.
The legal saga began in earnest on September 3, when U.S. District Judge Amir Ali issued a forceful 43-page ruling condemning the administration’s unwillingness to spend funds that had been appropriated by law. Judge Ali wrote, “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.’” His decision underscored the fundamental principle that the executive branch cannot simply ignore or reinterpret congressional mandates when it comes to federal spending.
In his ruling, Judge Ali also criticized the administration for failing to provide any plausible legal argument for withholding the billions of dollars in aid. “Defendants’ reasons for not developing an argument here over the numerous months and opportunities given may be many, including that, even having changed their position, there is not a plausible interpretation of the statutes that would justify the billions of dollars they plan to withhold,” Ali wrote, according to Politico. This scathing assessment left little doubt as to the court’s view of the administration’s legal footing.
The dispute centered on the Trump administration’s use of the pocket rescission, a rarely invoked tool that allows the president to propose the cancellation of funds after they have been appropriated by Congress, typically by simply not spending them before they expire. While presidents have occasionally used rescissions to signal fiscal restraint or policy disagreements, the scale and timing of Trump’s proposed clawback—nearly $5 billion, and just weeks before the funds were set to expire—sparked outrage among lawmakers and advocacy groups alike.
According to The Washington Post, the administration notified Congress in late August of its intent to withhold the funds, citing unspecified policy concerns. The move immediately drew fire from both sides of the aisle, with critics arguing that it threatened to undermine U.S. diplomatic efforts and humanitarian programs abroad. Collins, the powerful Republican chair of the Senate Appropriations Committee, was particularly outspoken, warning that the administration’s actions risked setting a dangerous precedent for future executive overreach.
The appeals court’s decision on September 5 ensured that the foreign aid funds would be released as Congress intended, effectively restoring the status quo and reaffirming the separation of powers between the legislative and executive branches. As The New York Times noted, the ruling was widely seen as a victory for congressional authority and a rebuke to the administration’s increasingly aggressive efforts to reshape federal spending priorities without legislative approval.
This was not the only legal setback President Trump faced during the week. As reported by Zeteo, federal judges also blocked the administration’s attempts to terminate Temporary Protected Status for more than one million people from Haiti and Venezuela, and halted efforts to freeze over $2 billion in federal research grants to Harvard University. These decisions, taken together, reflected a broader pattern of judicial resistance to what many critics describe as “authoritarian” maneuvers by the Trump White House in its second term.
For its part, the administration defended its actions as necessary to advance U.S. interests and ensure that taxpayer dollars were being spent wisely. However, the courts found these justifications lacking. Judge Ali, in particular, noted that the executive branch had failed to articulate any legal rationale that could withstand scrutiny. “Whatever the reason, Defendants have given no justification to displace the bedrock expectation that Congress’s appropriations must be followed,” he concluded.
Political reactions to the ruling were swift and, perhaps predictably, divided. Supporters of the decision hailed it as a reaffirmation of the rule of law and a necessary check on executive power. “This is about more than just foreign aid,” one congressional staffer told Politico. “It’s about making sure that no president, regardless of party, can simply ignore the will of Congress when it comes to how taxpayer dollars are spent.”
Meanwhile, Trump allies expressed frustration at what they saw as judicial overreach and an unwillingness to grant the president the flexibility needed to respond to changing global circumstances. Judge Walker, the lone dissenter on the appeals court panel, argued that the administration should have been granted more latitude to make funding decisions in the national interest.
Beyond the legal and political wrangling, the ruling had immediate practical consequences for U.S. foreign policy. The release of nearly $5 billion in aid ensured that critical programs administered by the State Department and USAID would continue, supporting everything from disaster relief and global health initiatives to economic development and democracy promotion in vulnerable regions. As Reuters highlighted, many diplomats and aid organizations had warned that any interruption in funding could have dire consequences for U.S. credibility and influence abroad.
For observers of American democracy, the episode served as a vivid reminder of the ongoing tug-of-war between the branches of government—and the enduring importance of checks and balances in the U.S. system. While the Trump administration’s legal setbacks this week may not have slowed its broader policy ambitions, they offered a clear signal that the courts remain willing to enforce the boundaries of executive authority, even in turbulent times.
As the dust settles, the message from the judiciary is unmistakable: when it comes to federal spending, Congress holds the purse strings, and not even the president can cut them without a fight.
