Federal Judges Block Trump ‘Anti-Weaponization’ Fund, Launch Inquiry Into IRS Deal

Happy Friday! A federal judge today blocked the Kennedy Center from closing for a planned two-year renovation and said that President Trump's name was illegally added to the venue and must come off the building. "Congress gave the Kennedy Center its name, and only Congress can change it," U.S. District Court Judge Christopher R. Cooper wrote.

Also, the list of artists still slated to perform at this summer's Freedom 250 concerts on the National Mall keeps dwindling, as the Commodores, Martina McBride, and Bret Michaels have also dropped out (though Fab Morvan of Milli Vanilli is reportedly still expected to appear, contrary to some previous reports). "I asked lots of questions and was assured this was a nonpartisan event," McBride wrote on social media. "But that turned out to be misleading."

Here's what else you need to know heading into the weekend.

Courts Block Trump 'Anti-Weaponization' Fund, Launch Inquiry Into IRS Deal

The federal judge overseeing President Trump's $10 billion lawsuit against the Internal Revenue Service reopened the case Friday after Trump had dropped it earlier this month as part of a controversial settlement agreement with the Justice Department involving the establishment of a $1.776 billion fund to compensate people who claim they were victims of government "weaponization."

Judge Kathleen M. Williams ordered President Trump's personal legal team to respond by June 12 to a motion alleging that the settlement agreement was "collusive" and that Trump's voluntary dismissal of his lawsuit "was premised on deception" and intended to avoid judicial scrutiny in the case while he cut a deal with his own government. Besides the creation of the so-called "anti-weaponization" fund, the deal also barred the IRS from pursuing investigations into Trump's past tax filings and those of his sons and the Trump Organization.

That court order came just hours after another federal judge ordered a two-week pause on the creation or operation of the settlement fund. U.S. District Judge Leonie Brinkema in Alexandria, Virginia, blocked any work on the new fund, including transfers of money into it, considerations of claims, or disbursements of payments, at least until a hearing on June 12.

Brinkema's order adds to the uncertainty surrounding the fund, which has elicited a fierce backlash from government watchdogs and on Capitol Hill since it was announced earlier this month. Lawmakers in both parties have taken issue with the fund, created as part of a deal that saw President Trump drop a $10 billion lawsuit he filed against the Internal Revenue Service over the leak of his tax records.

Critics charge that the unprecedented "slush fund" will allow Trump to direct vast sums of taxpayer money to his allies, potentially including rioters who attacked the Capitol on January 6, 2021. Democrats have floated plans to tax 100% of any payouts from the fund, and several lawsuits have been filed seeking to block its establishment. The new court ruling comes in a suit brought by a former Justice Department prosecutor and others who say that the fund is unconstitutional and discriminatory. They claim they were targeted by the Trump administration and argue that the fund is designed to benefit the president's allies so that they would not be treated equally by its administrators.

"Today, a federal court recognized the urgent need to prevent taxpayer dollars from being distributed through a secretive and unprecedented political compensation scheme before the legality of that program can be fully reviewed by the court," Skye Perryman, president and CEO of Democracy Forward, one of the plaintiffs, said in a statement. "No administration has the authority to spend public money through a political rewards program that Congress never authorized."

Brinkema said in her order that a full briefing by lawyers "will enhance the ability of the Court to make a sound decision" on the legal challenge and that it is important to issue a freeze "to ensure that no funds are irreversibly disbursed" from the fund, especially because the plaintiffs said that the Justice Department had refused to hold off on paying any claims for at least a few weeks to allow time for the case to play out.

There is little public indication so far that the Justice Department has moved to set up the fund or the five-member board that is supposed to oversee it, though some prospective claimants have already announced that they would seek compensation. Under the terms of the settlement announced by the Justice Department earlier this month, acting Attorney General Todd Blanche, who formerly served as Trump's personal lawyer, has 30 days - meaning until June 17 - to establish the fund, set up its rules and name the board. The government then has until July 17 to send the Treasury Department the necessary documentation to get the nearly $1.8 billion into a designated account.

A Justice Department spokesperson reportedly responded to the court order by saying that the fund was established legally and suggesting that the judge's personal politics had influenced her decision. Brinkema was appointed by Democratic President Bill Clinton.

"The Department remains extremely confident in the legality of the Anti-Weaponization Fund which is supported by ample precedent, including Obama-era settlements," the DOJ said in a statement to news outlets. "We will not allow the policy preferences of judges to interfere with our efforts to provide restitution to victims of lawfare."

Why Americans Are So Worried About Affordability

Although the economy continues to show signs of remarkable durability in the face of threats from war, rising inflation and a tepid labor market, millions of Americans are downbeat about their own financial situations and prospects. Some recent economic data help explain why, despite the stock market setting record after record, many people feel that the economy isn't working for them.

Labor share: As Greg Ip notes in The Wall Street Journal, this week's economic data show that corporate profits grew by a healthy 2.7% in the first quarter, while worker compensation increased by just 0.8%. That imbalance reduced the labor share of gross domestic income to 51%, the lowest level on record, dating back to just after World War II (see his chart below). Meanwhile, the share of national income going to profits rose to 12.7%, the highest level since 1950.

Another data point Ip points out illustrates the imbalance even more starkly: Since 2019, wages have increased 3%, while profits have increased 50%.

The labor share of income is shrinking for multiple reasons, and Ip cites the decline of unions, the offshoring of production, automation and corporate concentration. None of those factors is expected to reverse in the foreseeable future, and artificial intelligence is only expected to make matters worse.

Food insecurity: The macroeconomic update comes on the heels of a report from the Federal Reserve Bank of New York that shows that more U.S. households are struggling to afford food.

In June 2000, 4% of households reported that they were having trouble obtaining enough food, with some of that group saying they were skipping meals at times. Now the percentage reporting difficulties getting food has risen to 10%. Among non-white households, that number has climbed to 19.1%.

The Fed researchers say the results highlight the dynamics of the K-shaped economy, in which wealthy households have benefited from rising market values while everyone else faces increasing financial hardship. The growth in food insecurity is associated with declining consumer sentiment, though there are clearly other factors involved, as well, including the outsize effect inflation has on lower-income households.

"While not necessarily causal, the observed positive association between food insecurity and overall consumer pessimism, together with the increase in the incidence of food insecurity, especially among households at the bottom of the K-shape, point to a potential explanation for the unusually low recent levels of consumer sentiment at a time when the hard economic data paint a more positive picture," the researchers write.

Affordability: New research from the Brookings Institution indicates that the problem of being able to afford the basics of life may be more widespread than the food insecurity data suggests. In a report released this week, researchers found that nearly half of all U.S. households are having trouble making ends meet.

The report says that in most years since 2014, more than 40% of households have struggled to afford everyday necessities. Although there was a significant improvement in 2021 and 2022, when the federal government provided assistance during the Covid pandemic, the percentage of those struggling started climbing once the financial assistance ended, rising to 45.5% of all households in 2024. For non-white households, the number is 55%.

Higher wages would help millions. An increase of $10 per hour would push 38 million households over the line in terms of basic affordability, the researchers said. Reducing monthly costs by $500 would rescue another 10 million households. On the other hand, in a sign of how close to the line many are, an increase in the annual cost of living by just $1,000 would mean that 3 million more households would be unable to make ends meet.

"Moving the needle on affordability requires action on both sides of the equation: lowering costs of living and increasing household incomes," the researchers said. "When the costs for housing, health care, education, and food rise faster than wages, families fall behind not because they are failing, but because the math no longer works in their favor."

Chart of the Day: #1 in Healthcare Spending

In a new data-packed analysis comparing the U.S. healthcare system to those in 19 other wealthy nations, the nonpartisan Commonwealth Fund provides the latest numbers on something that has been clear for years: The U.S. pays far more than its peers for healthcare.

As this chart shows, the U.S. spent $12,649 per capita on healthcare in 2024, more than 50% more than the next-highest spender, Switzerland. That spending accounts for 18% of U.S. GDP, about twice the level recorded in the average wealthy nation. Yet the U.S has less to show for all that spending, with below-average results on many metrics, including life expectancy, maternal death rate and deaths to avoidable causes.

"Findings from this international comparison highlight a persistent failure of the U.S. health system: Americans pay more for health care, get less in return, and remain far more exposed to illness, debt, and insecurity than their peers," the researchers conclude. "Yet comparison alone is insufficient: the U.S. must build a system that delivers care rather than financial ruin."

Number of the Day: $95 Million

The Interior Department is spending at least $95 million on a series of new beautification projects in Washington, D.C., including $5 million to coat four bronze statues of horses surrounding the Lincoln Memorial in 23.75-karat gold leaf, according to a report by Anna Kramer of NOTUS. The projects reportedly all launched between December 2025 and April of this year.

The other projects reportedly undertaken by the National Park Service include a $3.6 million rehabilitation of Logan Circle, $4 million to renew grass and trees at Meridian Hill Park, $11.3 million to restore fountains at the park and a repaving of the marble around a statue of Simón Bolivar near the National Mall, which is costing more than $5 million.

"Many of the contracts were awarded without a full and open competition," Kramer writes, citing a government contracting database. "Instead, the Trump administration applied laws that allow contracts to be awarded to minority-owned, women-owned, or small businesses without the full rigor of an open competition."

An Interior Department spokesperson reportedly defended the projects, telling NOTUS that President Trump is fulfilling a commitment to make D.C. safe and beautiful. The department has said that the award for gilding the horses was justified in part because of a desire to have the project done by July 4. The statues reportedly have been "falling apart" slowly since they were installed in 1951, and repairs made in the 1970s failed to fully address the problems.

Fiscal News Roundup

• Trump Concludes Situation Room Meeting on Iran Without Announcing a Decision – CNN
• Judge Launches Inquiry Into Trump-IRS Settlement That Led to 'Anti-Weaponization' Fund – Politico
• Judge Pauses Trump Administration's 'Anti-Weaponization' Fund – Politico
• Judge Blocks Closure of Kennedy Center and Orders Removal of Trump's Name – CBS News
• Bondi Refuses to Answer Lawmakers' Questions About Trump's Involvement in Epstein Files Release – Associated Press
• GOP Pleads With WH on Reconciliation – Punchbowl News
• White House Moves to Give Political Appointees More Power Over Federal Grants – Associated Press
• The Trump Administration Is Spending $5 Million to Coat Horse Statues in Gold – NOTUS
• Ohio Suspends Data Center Tax Break as Tech Firms Face Pressure to Pay the Cost to Power AI – Associated Press
• Tomatoes Become Latest Symbol of America's Affordability Squeeze – Associated Press

Views and Analysis

• Mike Johnson Faces Brutal June as Deadlines Come Due – Kate Santaliz, Axios
• Fact Focus: Trump Says Obama and Biden Spent 'Hundreds of Millions' on Reflecting Pool. They Did Not – Melissa Goldin, Associated Press
• The Record Divide Between Corporate Profits and Worker Pay – Greg Ip, Wall Street Journal
• This Is Why Your Groceries Are So Expensive – Sandeep Vaheesan and Claire Kelloway, New York Times
• The GOP Wants to Tax Your Car – Kimberley A. Strassel, Wall Street Journal
• Rock-Bottom Immigration Rates Leave Mark on U.S. Economy – Courtenay Brown, Axios
• Our Military Is Built for the Wrong Century – Ross Douthat and Christian Brose, New York Times (podcast)