Trump's $1.8 billion weaponisation fund put on hold after Republican backlash

US President Donald Trump’s controversial nearly $1.8 billion compensation fund for alleged victims of government “weaponisation” has been put on hold following strong opposition from Republican lawmakers and legal challenges, according to sources familiar with the matter.

The pause marks a rare public setback for Trump from members of his own party, with Senate Republicans reportedly warning the White House that the proposal could not move forward. Senate Majority Leader John Thune said he had made it clear to administration officials that the fund should be scrapped, describing its termination as the best path forward.

The compensation fund emerged from a legal settlement between Trump and the US Department of Justice over a lawsuit in which Trump sought $10 billion in damages from the Internal Revenue Service (IRS) for the alleged mishandling of his tax records. Under the agreement, $1.776 billion was earmarked to compensate individuals claiming they had been subjected to government abuse.

However, the proposal quickly triggered political controversy and legal challenges. Critics, including several Republican senators, argued that the fund could potentially allow individuals involved in the January 6, 2021, Capitol attack to receive taxpayer-funded payouts. Opponents labelled the initiative a political slush fund and questioned the criteria for determining eligibility.

The backlash intensified during a meeting last month between Senate Republicans and acting Attorney General Todd Blanche, where lawmakers reportedly confronted the Justice Department over the political implications of the fund. According to a White House source, it became apparent after the meeting that there was little support in Congress for moving ahead with the plan.

The administration’s troubles deepened on Friday when federal judges in Virginia and Florida issued temporary orders halting implementation of the fund pending further judicial review. The injunctions are currently set to remain in place until at least June 12.

In a statement, the Justice Department said it strongly disagrees with the court decisions but would comply with the rulings. The department stopped short of confirming that the fund had been permanently abandoned, indicating only that it would follow the courts’ directives.

Sources said Trump is unhappy with the decision but understands that pausing the fund is the only viable option for now. One White House official described the initiative as being “on hold” rather than cancelled, noting that the final decision ultimately rests with the president.

The controversy unfolded as Republican lawmakers were also locked in negotiations with the White House over a separate $72 billion funding package for Immigration and Customs Enforcement (ICE) and Border Patrol operations, adding to tensions between Congress and the administration.

Another contentious aspect of the settlement was a provision barring the IRS from pursuing audits of Trump, his relatives and his companies over tax returns filed before May 18. It remains unclear whether the suspension of the compensation fund will have any impact on those protections or any future review of Trump’s tax matters.

- Ends