How Trump’s $2B court battle over foreign aid could reshape executive authority

Charles Wise, The Ohio State University, The Conversation on Mar 7, 2025

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Amid the chaos of the Trump administration’s first few weeks in office, a court case regarding the president’s legal right to stop payment of nearly $2 billion in U.S. Agency for International Development contracts poses an important legal question whose answer may show just how strong the country’s separation of powers actually is.

On Jan. 20, 2025, President Donald Trump issued an executive order pausing all foreign aid funding, most of which is administered by USAID. A little more than two weeks later, USAID laid off all but a few hundred of its 10,000 workers.

U.S. District Judge Amir Ali issued a temporary order on Feb. 13 for the administration to not end or pause any existing foreign aid contracts – and again ordered on Feb. 25 that the administration needed to pay the $2 billion owed to various aid organizations for completed work.

After the Trump administration filed an emergency appeal of the decision to the Supreme Court, the justices, in a 5-4 ruling on March 5, found that the federal judge’s decision can temporarily take effect while the district court considers the merits of the case.

Now, the Trump administration is facing a deadline imposed by Judge Ali of 11 a.m. on March 10, 2025, to announce a new timeline for delivering the frozen foreign aid payments.

Amy Lieberman, a politics and society editor at The Conversation U.S., spoke with Charles Wise, an expert on public administration and law, to understand what is fueling this court case and why it has become a test of how far Trump can push the boundaries of presidential power.

1. What is most important to understand about the Supreme Court’s ruling on USAID funding?

The Trump administration issued a blanket executive order freezing all USAID funds on Jan. 20, 2025. There have been many twists and turns in this case since then, but the Washington, D.C., district court determined in February that the organizations that receive USAID funding to deliver food or health care to people in need, as well as other recipients of USAID money in foreign countries, would suffer irreparable harm.

The U.S. District Court in Washington, D.C., also said that the administration did not follow proper procedures in the law. The Administrative Procedure Act has a set of standards that requires the president to do certain things before making any unilateral kind of action to withhold funds.

The Supreme Court’s March 5 order is not the final ruling on the case, but it does allow the U.S. District Court decision to stand – at least for now. This ruling requires the government to release funds to USAID recipients. The Supreme Court’s decision also directs the district court to clarify what the government must do to comply with the district court’s order, including considering the feasibility of the timeline within which the government must release the money.

This is all taking place in a very short time frame, in the context of the D.C. district court issuing a temporary restraining order. It is saying: Let’s freeze the existing situation in place so we can have a full hearing on this issue.

2. Why is this case important?

Any administration is prohibited from just withholding funds for any program it doesn’t like without following the procedures prescribed by law. This case matters because the D.C. district court’s decision puts boundaries on what the Trump administration can do to withhold funds that Congress has appropriated. It forces the administration to follow the laws that Congress and previous presidents have agreed on and adopted.

It ultimately comes down to a contest between the branches of government, and, specifically, the presidency and Congress. This is where Articles 1 and 2 of the U.S. Constitution – and how they divided powers between the president and Congress – comes in. The Trump administration claimed that the court should have respected the president’s Article 2 powers to administer the federal government’s spending. The D.C. court acknowledged the president’s powers under Article 2 but said it has to be balanced against Congress’ right, under Article 1, to appropriate funds.

3. What happens if Trump and his administration do not abide by this order?

Trump’s officials have a decision to make. Are they going to follow the executive order or the court’s order? That’s not a fun place to be. Administrative officials take an oath to uphold the Constitution and the laws of the U.S., which subjects them to court decisions.

The president himself is not responsible for distributing USAID funds. State Department officials are responsible for dispersing the funds, and Secretary of State Marco Rubio was appointed as the acting administrator of USAID on Feb. 3, 2025.

If Rubio and other officials refuse to comply with the court’s order, the D.C. judge, Amir Ali, can hold those officials in contempt of court. Ali has a variety of tools he can use – one is to levy fines against them individually. He could say they have to pay a thousand dollars per day for each day they don’t execute the court’s order.

4. What will happen next in this case?

The Supreme Court said in a brief opinion on March 5 that the Feb. 26, 2025, deadline for the government to pay USAID and its contractors had already passed and instructed Ali to “clarify what obligations the Government must fulfill to ensure compliance” with paying USAID.

The government has argued to the court that the timeline the judge initially set was too fast – they couldn’t do it that fast.

Now, a few things are going to happen. Ali has ordered the government to develop and release a new schedule to release funds and to have that ready by March 10.

The second part is that the district court judge will probably schedule a hearing on the merits of the case, in which Ali will be assessing the administration’s argument about whether the administration has violated the Administrative Procedure Act. Ultimately, the Trump administration could appeal Ali’s decision, and the case could wind up back at the Supreme Court.

This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Charles Wise, The Ohio State University

Charles Wise had a cooperative agreement for work with USAID that ended in 2007.