Supreme Court Upholds Nearly $2 Billion in Frozen USAID Payments

The Supreme Court on Wednesday rejected the Trump administration’s request to impede a lower court’s ruling that mandates nearly $2 billion in foreign aid payments. This decision offers immediate relief to international aid organizations and contractors awaiting funds for projects already completed.

In a succinct ruling, the Court highlighted that the deadline set by the lower court on February 26 had lapsed, thus requiring the court to issue new directions.

“Given that the deadline in the challenged order has now passed, and in light of the ongoing preliminary injunction proceedings, the District Court should clarify what obligations the Government must fulfill to ensure compliance with the temporary restraining order, with due regard for the feasibility of any compliance timelines,” the Court stated.

Justice Samuel Alito expressed dissent, supported by Justices Clarence Thomas, Neil Gorsuch, and Brett Kavanaugh.

Chief Justice John Roberts previously granted a temporary pause last Wednesday against a lower court’s ruling, which required the Trump administration to settle all outstanding invoices to foreign aid entities by 11:59 p.m. That amount totals close to $1.9 billion, and the Justice Department described this timeline as “impossible” to meet. Roberts did not disclose a reason for his decision to pause the order issued by U.S. District Judge Amir Ali but it was anticipated that he would refer the case to the full Court for review.

This temporary pause effectively halted foreign aid groups from pursuing civil contempt motions against the Trump administration. Employees from these organizations revealed in interviews that such legal maneuvers could have expedited their efforts to recover the owed payments.

Ongoing Payments Debate

The core issue at hand is the urgency with which the Trump administration must address the nearly $2 billion owed to aid groups and contractors for projects funded by the U.S. Agency for International Development, or USAID. This situation arises amidst the administration’s decision to freeze all foreign spending under the pretext of enhancing governmental efficiency and cutting waste.

In a recent court filing, Acting U.S. Solicitor General Sarah Harris argued that while the claims from plaintiffs are likely valid, the timeline dictated by U.S. District Judge Amir Ali to reimburse the outstanding invoices was “not logistically or technically feasible.”

Harris further contended that the order may violate the executive branch authorities as granted by the Constitution to an elected president.

She stated that the mandate for the Trump administration to make payments following a timeline set by the lower court “intrudes on the president’s foreign affairs powers” and undermines executive branch oversight concerning the allocation of foreign aid.

Plaintiffs’ Counterarguments

The plaintiffs categorically dismissed Harris’s claims. They highlighted in their own Supreme Court filing that the lower court had previously directed the Trump administration to initiate payments for the owed foreign aid amount more than two weeks ago. They accused the government of failing to meet that deadline and neglecting to take any measures towards compliance.

Attorneys representing the plaintiffs noted that the Trump administration had “never taken steps towards compliance” with Judge Ali’s directive, which required unfreezing the federal funds to facilitate the $1.9 billion in payments for completed projects.

Additionally, they countered the administration’s assertions made in court last week, stating that it would need “multiple weeks” to reactivate the payment system.

They claimed that the administration hastily dismantled the necessary systems designed for issuing payments to foreign aid groups and eliminated USAID personnel capable of managing a smoother repayment process.

One insider familiar with the USAID payments and affected contractors shared that, “All of these invoices have already been approved by the front-line managers at USAID, and it’s really these payment bottlenecks that the government has itself created” which have contributed to the payment delays.

Context of the Ruling

This legal challenge surfaces as numerous foreign aid organizations that previously sued the administration have already lost a large portion of their funding. This situation aligns with President Donald Trump’s plans to reduce approximately 90 percent of USAID foreign aid contracts and to cut an additional $60 billion from foreign aid budgets.

So far, the White House has not provided a comprehensive list detailing which contracts and grants will face termination or those that will continue. Critics assert that this abrupt withdrawal of U.S. investment and presence could inflict economic harm, damage the country’s reputation, and introduce new security threats both domestically and internationally.

Scott Greytak, a director at U.S. Transparency International, cautioned that cutting such a substantial portion of U.S. foreign aid carries meaningful economic and security implications. He indicated that the withdrawal of financial support for specific projects, especially in nations vulnerable to corruption, could lead to “increased cross-border corruption, fraud, and other crimes.”

In addition, he pointed out that this situation could present obstacles for U.S. businesses aiming to expand into foreign markets and might create an opening for competitors, particularly China, to fill the vacuum left by the absence of U.S. engagement.