The Trump administration has decided to abandon President Donald Trump's proposed USD 1.8 billion "weaponisation" compensation fund after facing significant opposition from members of his own Republican Party, according to testimony delivered by Acting Attorney General Todd Blanche before lawmakers on Tuesday.
Speaking during a congressional hearing, Blanche made it clear that the administration would not move ahead with the controversial initiative. He stated unequivocally that the fund was no longer being pursued and that the matter was effectively closed.
The proposed fund originated from a legal settlement reached between President Trump and the US Department of Justice. The agreement was designed to resolve an extraordinary USD 10 billion lawsuit filed by Trump against the Internal Revenue Service (IRS). In the lawsuit, Trump alleged that the IRS had improperly handled and disclosed his confidential tax records, causing significant harm and warranting substantial compensation.
As part of the settlement negotiations, the administration proposed the creation of a USD 1.776 billion compensation fund intended to provide financial payments to individuals who claimed they had been subjected to abuse, mistreatment, or politically motivated actions by government agencies. Supporters argued that the fund would help address grievances arising from alleged misconduct by previous administrations.
However, the proposal quickly became a source of controversy, particularly among Republican lawmakers. Concerns intensified when senators questioned whether individuals convicted of assaulting police officers during the January 6, 2021, attack on the US Capitol could potentially qualify for compensation under the program.
The issue gained momentum after Blanche, who previously served as Trump's personal attorney before becoming Acting Attorney General, declined during earlier discussions to explicitly rule out payments to January 6 defendants. His reluctance to provide a clear exclusion fueled criticism from lawmakers and raised concerns about the potential political consequences of the fund.
Republican senators reportedly became increasingly frustrated with the proposal and warned that it could complicate or even jeopardize the passage of a separate USD 72 billion legislative package aimed at funding Trump's immigration enforcement initiatives. Faced with growing resistance from within the party, administration officials ultimately decided to abandon the compensation program altogether.
According to sources familiar with internal discussions, White House officials spent much of Monday contacting lawmakers to reassure them that no compensation payments would be distributed under the proposed fund. These efforts were reportedly aimed at calming concerns and preserving support for other key administration priorities.
Blanche has been serving as Acting Attorney General since early April, following President Trump's decision to dismiss former Attorney General Pam Bondi. Political observers noted that Blanche faced mounting pressure to address concerns surrounding the fund, with some suggesting that his standing within the administration depended partly on resolving the controversy.
Although the compensation fund has now been scrapped, Blanche informed lawmakers that another provision included in the settlement agreement would remain in effect. That provision reportedly prevents future audits of certain past tax records belonging to Trump and members of his family.
The continuation of that provision became a focal point of criticism from Democratic lawmakers during Tuesday's hearing. They questioned both the legality and appropriateness of such an arrangement, particularly given Blanche's prior professional relationship with Trump.
When asked by Democratic members of Congress to provide a written guarantee confirming that the compensation fund was permanently dead, Blanche declined to do so. He argued that his verbal statement should be sufficient and questioned the necessity of putting the commitment in writing.
Democratic Representative Rosa DeLauro emerged as one of the strongest critics during the hearing. She argued that Blanche should not have approved a settlement provision that effectively shields Trump and his businesses from future tax audits. Referring to reports suggesting Trump could potentially face IRS penalties amounting to approximately USD 100 million, DeLauro accused Blanche of granting the president and his family an unfair level of protection.
She further questioned whether Blanche's previous role as Trump's personal attorney created a conflict of interest in his current position as the nation's top law enforcement official.
Blanche firmly rejected those allegations. He denied that the agreement provided Trump with any form of blanket immunity from tax scrutiny and argued that his previous employment should not automatically be viewed as evidence of a conflict of interest. During the exchange, he challenged critics to explain precisely what conflict they believed existed, suggesting that simply having held a previous position should not disqualify him from carrying out his current responsibilities.
While Democrats expressed strong objections, House Republicans participating in the hearing largely refrained from criticizing the compensation fund or the broader settlement agreement.
Meanwhile, some individuals who had hoped to receive compensation under the proposed program appeared unconcerned by the administration's announcement. Peter Ticktin, an attorney representing more than 400 defendants connected to the January 6 Capitol riot cases, said neither he nor his clients were discouraged by the decision to abandon the fund.
Ticktin revealed that he had already filed claims on behalf of ten defendants, with some requests seeking compensation of up to USD 3 million per individual. Despite the administration's public decision to halt the fund, he stated that many of his clients still believe they will ultimately receive compensation. According to Ticktin, their confidence stems from their continued trust in President Trump and their expectation that alternative avenues for relief may eventually emerge.
Although the compensation fund has now been officially shelved, the controversy surrounding it has highlighted ongoing political tensions over government accountability, the treatment of January 6 defendants, and questions regarding Trump's legal and financial arrangements. The debate has also renewed scrutiny of the relationship between senior administration officials and the president, ensuring that the issue is likely to remain a topic of political discussion in the months ahead.
