Trump administration scrapping 1.8 billion-dollar compensation fund – Blanche

The US acting attorney general said the administration was ‘not moving forward with the fund, period’ (Mark Schiefelbein/AP)

US acting attorney general Todd Blanche has said the Trump administration was scrapping plans to create a 1.8 billion US dollars (£1.3 billion) fund meant to compensate allies of the Republican president after widespread political backlash and setbacks in the courts.

“We are not moving forward with the fund, period,” Mr Blanche said in response to questions at a house hearing on the justice department budget.

“Not moving forward, ever?” representative Grace Meng, a New York Democrat, asked.

The blunt declaration marked an extraordinary turnabout for a Trump justice department that just two weeks ago had pronounced the fund as essential to make up for what officials say was weaponised law enforcement during former President Joe Biden’s Democratic administration, a claim the Biden administration strongly denied.

US acting attorney general Todd Blanche, centre, was responding to questions at a house hearing on the justice department budget (J Scott Applewhite/AP)

But since then, the idea has faced mounting pressure from Republicans who demanded reassurances that plans for the fund were off the table before they would move forward with legislation funding US President Donald Trump’s immigration enforcement agencies.

Mr Blanche said the justice department was not abandoning an element of a settlement with the Internal Revenue Service (IRS) that gave Mr Trump and his family immunity from tax audits.

The hearing before a house appropriations subcommittee was scheduled for discussion of the justice department’s budget, but members quickly focused their questioning on the creation of a fund that has provoked outrage over the mere possibility that violent pro-Trump rioters who stormed the US capitol on January 6 2021 could be eligible for payouts.

Signs of the retreat surfaced on Monday when a person familiar with the matter said the Republican president was now reconsidering whether to move forward with the fund established to resolve his lawsuit against the IRS over the leak of his tax returns.

The justice department also said on Monday it would comply with a Virginia court temporarily blocking the administration’s Anti-Weaponisation Fund, effectively agreeing to pause the plan for at least two weeks.

Another judge in Florida raised the prospect of reopening the IRS lawsuit because of “grievous allegations” of improper dealing made against the administration by settlement critics.

The department was not abandoning a part of a settlement that gave Donald Trump, pictured, and his family immunity from tax audits, Mr Blanche said (Jacquelyn Martin/AP)

Although some Trump supporters, including participants in the capitol riot, celebrated the original announcement, the reaction among Republicans in congress has been decidedly more hostile, forcing Mr Blanche to try to assuage a Republican constituency that generally operates in close alignment with the administration.

The furore has especially complicated matters in the senate, where Republicans defiantly left town 10 days ago without passing legislation to fund Mr Trump’s immigration enforcement agencies.

Republicans who returned to Washington on Monday said they would not have the votes to pass the homeland security spending bill until the White House worked with them to place parameters on the fund. Many have pushed the administration to impose limits or scrap the idea altogether.

At a senate budget hearing last month, Mr Blanche refused to rule out the possibility that those who carried out violence on January 6 could be eligible for payouts and has repeatedly said in interviews that anyone who feels persecuted by the criminal justice system is free to apply.

But he has apparently struck a more conciliatory tone in private when confronted by Republican anger.