The Supreme Court ruled on Wednesday that a federal judge had the authority to mandate that the Trump administration release $2 billion in payments to contractors working with the U.S. Agency for International Development. However, the decision did not force the government to issue the funds immediately.
In a narrow 5-4 decision, the justices declined to grant an emergency request from the Justice Department. The request followed a series of directives from U.S. District Judge Amir Ali, who had ordered the administration to release money that former President Donald Trump had frozen through an executive action.
For a full week, the court postponed any action on the matter. As a result, the contractors affected by the funding delay have yet to receive their payments.
The justices issued an unsigned order stating that since Ali’s deadline for immediate disbursement had already passed, the matter was still moving forward in the lower court, where additional rulings were expected. A hearing has been set for Thursday.
Because of this, the justices noted, Ali “should clarify what obligations the government must fulfill” in accordance with the temporary restraining order he issued on February 13. They further advised that he take into account “the feasibility of any compliance deadlines.”
Dissenting from the decision were four conservative justices. Justice Samuel Alito wrote that Ali did not possess “unchecked power to compel the government to pay out … 2 billion taxpayer dollars.”
“I am stunned,” Alito added.
Also dissenting were Justices Clarence Thomas, Neil Gorsuch, and Brett Kavanaugh.
The administration had argued that it was not in a position to meet Ali’s order, which required the $2 billion to be distributed by Wednesday night last week.
The funding freeze has impacted several initiatives, including the development of irrigation and water pumping systems in Ukraine, infrastructure improvements for water supply in Lagos, Nigeria, procurement of medical supplies in Vietnam and Nepal, and anti-malaria efforts in Kenya, Uganda, Ghana, and Ethiopia.
While the legal battle continues, the administration has been reviewing all existing USAID expenditures. That assessment, recently completed, reaffirmed the administration’s decision to eliminate thousands of programs, which together represent nearly $60 billion in funding.
These broader budget cuts are likely to face legal challenges, though they were not part of the case the Supreme Court addressed.
Last week, Chief Justice John Roberts issued an administrative stay, temporarily blocking Ali’s ruling while the justices determined how to proceed.
The lawsuit was initially filed by nonprofit groups and private firms that rely on USAID funding for their international aid operations. Additionally, unions representing USAID employees have brought a separate legal challenge.
Since taking office, Trump and his close associate Elon Musk have aggressively pursued a strategy to shrink the federal government, with USAID being one of their primary targets. Last Thursday, USAID employees who had lost their positions were seen clearing their workspaces in the agency’s Washington, D.C., headquarters as supporters gathered outside.
The abrupt nature of the administration’s actions, however, left many contractors in financial distress. They claimed in their lawsuit that they had already completed work but had yet to be compensated. Furthermore, they argued that the government had disregarded procedures outlined in the Administrative Procedure Act.
Ali initially issued a temporary restraining order that halted a portion of Trump’s executive action, which called for a reassessment of foreign aid spending. The judge determined that the administration could not use the executive order as a justification for a blanket suspension of aid funding, although he did allow for individual reviews of specific cases.
Two weeks later, Ali followed up with another order, stating that the government must immediately compensate certain contractors for completed work. The administration responded by appealing the decision.
In a Supreme Court filing, Acting Solicitor General Sarah Harris stated that while “the government is committed to paying legitimate claims for work that was properly completed,” she argued that Ali lacked the authority to dictate the release of specific funds.
The plaintiffs have stressed the urgency of the situation, saying that contractors have been forced to lay off employees, and some workers in foreign countries—including in Ukraine, Georgia, and Nigeria—are in precarious positions due to unpaid contracts.
In their Supreme Court brief, attorneys representing the contractors pointed out that one organization had to terminate 110 employees last week because of the delayed payments, while another is facing potential legal liability for not meeting severance obligations.
The contractors’ lawyers contended that the Supreme Court should not intervene at this early phase of the litigation. They also accused the Trump administration of having “openly flouted” Ali’s temporary restraining order for nearly two weeks.
{Matzav.com}