Trump Can Block Billions in Foreign Aid, Appeals Court Says

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Reuters
By Yuval Rosenberg

What can we say? It's Wednesday. So let's get right to it.

Trump Admin Can Withhold Billions in Foreign Aid, Appeals Court Says

A federal appeals court handed the Trump administration a win on Wednesday, ruling that it can withhold billions of dollars in foreign aid.

Judges on the Court of Appeals for the District of Columbia Circuit lifted a district court injunction requiring the government to deliver foreign assistance funds that Congress had appropriated. The 2-1 ruling said that aid groups that sued the Trump administration over its foreign aid freeze did not have standing to bring the suit. "The district court erred in granting that relief because the grantees lack a cause of action to press their claims," Judge Karen L. Henderson wrote in the majority ruling. Henderson, appointed by President George H.W. Bush, was joined in the decision by Judge Gregory G. Katsas, a Trump appointee.

Henderson wrote that, under the 1974 Impoundment Control Act, only the comptroller general - the head of the Government Accountability Office, which is part of the legislative branch - could legally challenge the president's withholding of funds.

The GAO has found that the Trump administration has broken the law by withholding funds authorized by Congress, but it has not filed suit to this point.

In a dissent, Judge Florence Y. Pan, a Biden appointee, said that the government had not challenged the district court's finding that the president had no intention of spending the appropriated funds or the court's conclusion that withholding the funds likely violated the constitution. "Instead, the government argues only that the grantees lack a statutory cause of action to force the President to obligate the funds in question," Pan wrote. "Because that argument does not take issue with the central legal analysis that justified the preliminary injunction, our job is easy - we should affirm that ruling."

Pan argued that the court ruling "derails" the constitutional system of checks and balances. "The court's holding that the grantees have no constitutional cause of action is as startling as it is erroneous," she wrote. "The majority holds that when the president refuses to spend funds appropriated by Congress based on policy disagreements, that is merely a statutory violation and raises no constitutional alarm bells."

The administration's victory may be temporary, as plaintiffs in the case reportedly said they would ask for a review by the full 15-judge D.C. Circuit court panel.

Trump Says He'd Meet With Dems on Shutdown Deadline 'but It's Almost a Waste of Time'

President Trump held a news conference Wednesday morning to announce this year's nominees for the Kennedy Center Honors (see the names below) and made some other news as well. Trump told reporters that his high-profile meeting on Friday with Russian President Vladimir Putin was likely only setting the stage for a second meeting that would include Ukrainian President Volodymyr Zelensky. "There's a very good chance that we're going to have a second meeting, which will be more productive than the first," Trump said.

Starting the shutdown watch: When Congress returns after Labor Day from its summer recess, lawmakers will have little time to hammer out a plan to fund the government and avoid a shutdown when current funding expires at the end of September. With that deadline looming, Trump was asked Wednesday whether he plans to meet with Democratic congressional leaders Chuck Schumer and Hakeem Jeffries to discuss the issue.

"Well, I will, I guess," he said, "but it's almost a waste of time to meet because they never approve anything."

Trump went on to claim that Democrats are "led by insane people" and veered into a discussion of New York mayoral candidate Zohran Mamdani, though he did not refer to him by name. Trump then discussed the big tax-and-spending bill Republicans just passed and attacked Democrats on crime and cashless bail.

"We're going to meet with them, of course," Trump said when he returned to the funding question. "I'd like to meet with them. We're going to tell them all these good things, and they're going to tell us, 'No.' And then we're going to go out and we're going to vote it in by the Republicans, because I don't believe that anybody is capable of making a deal with these people. They have gone crazy."

Trump's response ignores the reality in the Senate, where Democratic votes will be needed to pass a stopgap funding bill and annual appropriations measures.

Schumer and Jeffries have said they "want to pursue a bipartisan, bicameral appropriations process."

In a post on X, Jeffries said he is prepared to meet with Trump. "There are several issues to discuss, including the Republican failure to lower the high cost of living and their devastating cuts to healthcare. Let's get at it."

Trump's Kennedy Center picks: The president said this year's honorees would be actor Sylvester Stallone, rock band Kiss, country singer George Strait, disco legend Gloria Gaynor and English actor and singer Michael Crawford. That list may seem like a throwback to the '70s and '80s, but there's a possible explanation for that: Trump said he was heavily involved in picking those names. He also announced that he will host the event himself.

Trump Cuts Are Undermining Research to Improve Healthcare: Report

The Trump administration's cuts to the Department of Health and Human Services and changes to federal grantmaking have raised alarms among scientists and healthcare experts, who warn that public health could be harmed, and the effects could be lasting. A new report by STAT News adds to those concerns by highlighting how cuts to a small federal agency are undermining research into how to make the healthcare system better.

"The loss of most of the workers at the Agency for Healthcare Research and Quality has left it unable to distribute grants or support a panel of outside experts that advises on preventive medical services," STAT's Chelsea Cirruzzo reports, citing sources, including former employees, who say the agency has been rendered functionally "incapacitated."

Cirruzzo cites an independent analysis of federal data by AcademyHealth, a nonpartisan group that advocates for health researchers, showing that the agency has not approved any new grants since April 1 compared to nearly $6 million in new awards over the same period in 2024. "The group also found that just $23 million in continuing grants have been awarded this year since April 1, versus more than $50 million in the same period of 2024," Cirruzzo adds.

The Agency for Healthcare Research and Quality has reportedly lost nearly 90% of its workers. A spokesperson for the Department of Health and Human Services told STAT that the agency will be combined with the assistant secretary for planning and evaluation as part of a new Office of Strategy that will "conduct research that informs the Secretary's policies and evaluates the effectiveness of the Department's programs for a healthier America."

The staffing cuts and reduction in grantmaking reportedly could violate the federal budget law that prohibits presidents from withholding funds Congress has approved. The Government Accountability Office said in a report earlier this month that the Trump administration violated the Impoundment Control Act of 1974 in canceling thousands of grants by the National Institutes of Health.

Read more at STAT.

Trump Is Considering 11 Candidates for Fed Chair: Report

President Trump has reportedly expanded his search for the Federal Reserve chairman, adding new contenders to the list of possible replacements for Jerome Powell, the beleaguered current Fed chair, whose term ends next May and who Trump has relentlessly criticized as being "too late" to lower interest rates.

The Wall Street Journal reported Friday that Trump's team was looking at a list of about 10 candidates and had added former St. Louis Fed President James Bullard and Marc Sumerlin, a former economic adviser to President George W. Bush, to a group of contenders known to also include National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh.

CNBC reported Wednesday that the list of candidates has grown to 11 names, including three contenders who have not been named publicly until now: Jefferies Chief Market Strategist David Zervos, former Fed Governor Larry Lindsey and Rick Rieder, chief investment officer for global fixed income at BlackRock.

The others reportedly under consideration are former Fed Vice Chair for Supervision Michelle Bowman, Fed Vice Chair Philip Jefferson, Dallas Fed President Lorie Logan and Fed Governor Chris Waller.

CNBC's Steve Liesman says administration officials described a selection process in which Treasury Secretary Scott Bessent will interview each candidate, narrow down the list and present it to Trump for a final decision. "The size of the list and the process described suggest a decision is not imminent and could take a considerable amount of time," Liesman writes. "The longer the process takes, the less likely there is to be a so-called shadow Fed chair in place for several months before Powell leaves, which some have suggested would be disruptive for monetary policy."

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