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DOJ abandons controversial compensation fund
The US Department of Justice (DOJ) officially terminated a planned $1.8 billion fund on Tuesday, just two weeks after its announcement, following fierce opposition from Republican lawmakers. The initiative, part of a settlement in a lawsuit dropped by former President Donald Trump against the IRS, aimed to compensate individuals deemed unjustly targeted by the Biden administration.
Republican revolt derails plan
Republican members of Congress threatened to block a critical immigration bill unless the administration withdrew the fund, which critics argued could benefit Trump supporters, including participants in the 6 January 2021 Capitol riot. The backlash highlighted growing unease within Trump's own party over his attempts to expand executive power and reward allies.
"This was a total self-inflicted wound and completely unnecessary," said a former Trump adviser, speaking anonymously. "It speaks to the president's myopic view sometimes. He's going to do what he wants to do regardless of whether it hurts Republicans."
Controversial provisions spark bipartisan outrage
The fund included a clause barring current tax audits of Trump and his family businesses, a move condemned by both Republicans and Democrats as corrupt. Acting US Attorney General Todd Blanche confirmed on Tuesday that the tax audit shield would remain in place, further inflaming Republican critics who demanded its removal.
Senate Republicans confronted Blanche in a private meeting on 21 May, two days after the fund's announcement. "There were multiple senators yelling at the attorney general, saying this feels like self-dealing," Senator Ted Cruz of Texas recounted on his podcast Verdict.
Pressure mounts as legal challenges emerge
Republican lawmakers stalled funding for US Immigration and Customs Enforcement (ICE) and Customs and Border Patrol (CBP) to signal their opposition, while Democrats vowed to block the immigration bill over the fund. Legal challenges also emerged, with a federal judge ordering the DOJ to suspend the program on Friday to allow a lawsuit to proceed.
The DOJ initially paused the fund on Monday, citing the court ruling, but critics demanded a full retraction. Blanche formally ended the initiative on Tuesday, telling House lawmakers, "We're not moving forward with the fund."
Future of the fund remains uncertain
Despite the DOJ's decision, the controversy is unlikely to fade. Blanche refused to commit to putting the termination in writing, leaving some to speculate that the administration could revisit the issue. Legal challenges are expected to continue, with groups like the Democracy Defenders Fund vowing to ensure Trump does not revive the plan.
"Litigation provides a safeguard to make sure" Trump doesn't revive the idea, said Norm Eisen, co-founder of the Democracy Defenders Fund.
Democrats push for legislative action
Senate Democrats announced plans to introduce amendments to the immigration bill to permanently block presidents from using taxpayer funds to reward political allies. Senate Minority Leader Chuck Schumer dismissed the administration's verbal assurances, calling them "worthless."
"The only way to stop Trump's nearly $2 billion MAGA slush fund and his blank check to commit tax fraud is to abolish it by law-permanently," Schumer said in a social media post.
Schumer pledged to force a Senate vote to legally dismantle the fund, framing it as a key issue in the upcoming midterm elections.
