The Trump administration has abandoned plans for a $1.8 billion compensation fund for people who said they had been unfairly targeted by federal authorities, after the proposal triggered legal challenges and opposition from lawmakers in both parties.
Acting Attorney General Todd Blanche confirmed the decision during a congressional hearing on Tuesday, ending weeks of uncertainty over a scheme that had become increasingly difficult for the White House to defend.
“We’re not moving forward with the fund, period,” Blanche told lawmakers.
The programme was introduced as part of a settlement linked to President Donald Trump’s lawsuit against the Internal Revenue Service following the disclosure of his tax records. It was designed to provide payments to people who claimed they had been subjected to politically motivated investigations, prosecutions, or other government actions.
However, critics warned that the rules appeared broad enough to allow some people convicted over the 6 January 2021 attack on the U.S. Capitol to seek compensation. Several Trump supporters prosecuted in connection with the riot had already indicated that they planned to file claims.
The administration’s reversal came shortly after U.S. District Judge Leonie Brinkema temporarily blocked the Justice Department from establishing the fund or processing applications. Her ruling followed a lawsuit filed in Virginia by two men who said they had faced political retaliation but believed they would not be eligible to apply.
The proposal also became an obstacle in negotiations over a $72 billion funding package for immigration agencies. Senate Majority Leader John Thune publicly called on the administration to withdraw the plan rather than leave Congress to resolve the dispute.
“I made my views very clear on the issue,” Thune said, adding that “the best way to handle it is if the administration decides to shut it down themselves.”
Democrats had also promised to challenge the fund through legislation, while former U.S. Vice-President Mike Pence described it as a “bad idea from the start.”
Although Blanche told lawmakers that the programme would not proceed, he declined to commit to issuing a written statement confirming the decision.
“I’m not committing to putting anything in writing,” Blanche said. “I don’t know what the purpose is of putting something in writing. I’m telling you what we are doing.”
The Justice Department had defended the scheme only a day earlier, while the White House referred questions about the reversal back to the department.