Trump to abandon $1.776 billion compensation fund amid bipartisan backlash, source says
The president was left with a choice: Keep fighting an uphill battle or back down from a fight he was likely to lose. He apparently went with the latter.
A few days after the Trump administration unveiled its $1.776 billion compensation fund, acting Attorney General Todd Blanche went to Capitol Hill to brief Senate Republicans on the details and answer their questions. He likely expected some modest pushback, since a handful of GOP senators had already gone on record announcing their opposition to what they described as a “slush fund.”
But Donald Trump’s former defense lawyer probably wasn’t prepared for the ferocity of the response from those in attendance. In fact, we don’t even have to speculate based on leaks from unnamed officials: Republican Sen. Ted Cruz of Texas said on his podcast that his Senate colleagues “screamed” at Blanche as part of “one of the roughest meetings I’ve seen in my entire time in the Senate.”
“Fiery does not begin to cut it,” Cruz added. “My guess is there [were] probably 45 senators in the room; at least half of them were blasting the attorney general, and they were pissed.”
Note, he was referring to an exclusively Republican audience — Democrats were not invited to this briefing, and none were in attendance — suggesting that “at least half” of the Senate GOP conference wanted Trump’s sycophantic acting attorney general to know, with varying degrees of intensity, that they were not on board with this idea, especially in an election year in which the party is already facing headwinds.
The president has faced occasional and sporadic pushback from his ostensible allies on Capitol Hill since returning to power nearly 16 months ago, but the bipartisan condemnations of this idea — up to and including Trump’s own former vice president, who called the fund “deeply offensive” and “totally unacceptable” — were unlike anything he’s seen since the Jan. 6, 2021, riot itself.
The president was left with a choice: Keep fighting an uphill battle for a brazenly corrupt scheme or back down from a fight he was likely to lose. He apparently went with the latter.
A senior White House official told MS NOW’s Jacqueline Alemany on Monday that the White House is dropping its plan for the fund.
Axios was first to report on the White House’s intentions.
The developments come three days after a federal judge blocked the gambit from advancing, as part of a preliminary move.
A Justice Department spokesperson appears to have leaned into Friday’s court ruling, expressing the DOJ’s disagreement with the outcome in a statement to MS NOW, but concluding that it “will abide by the Court’s ruling.” The same statement also referred to the fund in the past tense.
The department’s statement, however, wasn’t altogether true: The federal judge in Virginia did not permanently kill the fund. Instead, she blocked it for two weeks until she could hear additional arguments about its future.
Bipartisan backlash
By any fair measure, the fund never should’ve existed in the first place, and many legal scholars characterized it as the single most corrupt step ever taken by an American president. The initiative began with an outlandish $10 billion lawsuit Trump filed against his own administration over the leak of his tax returns during his first term, which he dropped as part of an agreement to create a $1.776 billion fund that would compensate “victims” of the Biden administration, notwithstanding the inconvenient fact that Republicans have never been able to identify any actual, legitimate victims.
There are some key questions that have not yet been answered. For example, the day after the administration announced the fund, Blanche unveiled an addendum of sorts, which said the Internal Revenue Service would no longer scrutinize past or present alleged tax irregularities surrounding the president, his family and his controversial businesses. The development, among other things, freed Trump from having to worry about a potential $100 million penalty.
Whether this arrangement remains intact as the White House backs off from the existence of the fund remains unclear.
What’s next
As the dust settles on the latest developments, the key thing to remember is that congressional opposition apparently made all the difference. On the one hand, there were GOP senators who drew a firm line — retiring Sen. Thom Tillis of North Carolina called the fund a “payout pot for punks,” reinforcing concerns about taxpayer-financed checks to Jan. 6 rioters — and Democrats set the stage for a series of votes that were likely to generate significant Republican support.
In fact, in a “Dear Colleague” letter issued as this week got underway, Senate Minority Leader Chuck Schumer wrote, “This week, Senate Democrats will launch a coordinated effort to kill the slush fund before one cent goes out the door. And no matter what Republicans do, we will force them to vote.”
The New York Democrat focused specifically on a pending reconciliation package, which GOP lawmakers intend to use to fund Immigration and Customs Enforcement and Customs and Border Protection. Two weeks ago, Republicans intended to advance their own party’s proposal, but the effort was derailed by intraparty opposition to the fund.
With this in mind, Schumer added in Monday morning’s letter, “Democrats are forcing Republicans to make one simple choice: Kill the slush fund or own it.”
For good measure, a trio of Senate Democrats — Arizona’s Mark Kelly, California’s Adam Schiff and Michigan’s Elissa Slotkin — were also poised to unveil the “Drain the Slush Fund Act,” which was also designed to deny all public funding to Trump’s project.
GOP senators weren’t just desperate to avoid these votes; they were also likely to side with Democrats. It now appears those votes won’t be necessary after all, though there are still details to work through.