A federal appeals court has ruled that President Donald Trump cannot block billions of dollars in foreign aid that Congress had already approved.

The U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court’s ruling that withholding $4.9 billion in funding was likely unlawful and ordered the release of the money, as The Hill reports.

The three-judge panel issued its decision on Friday, marking a significant setback for the administration’s attempt to use what it called “pocket rescissions.” This maneuver was designed to cancel funds previously appropriated to the State Department and USAID by letting time run out on their use.

Judges split on legality of aid freeze

The panel voted 2-1 against the administration. Judges Cornelia Pillard and Florence Pan supported the lower court’s conclusion that the funds must be released as intended by Congress. Judge Justin Walker dissented, siding with the administration’s argument.

The ruling reinforced an earlier decision issued the same week by U.S. District Judge Amir Ali. He had criticized the administration’s reasoning for attempting to withhold the funds and emphasized the importance of following congressional appropriations.

Ali wrote that government lawyers failed to provide a “plausible interpretation” of the statutes that would justify blocking the billions of dollars. He added that absent a constitutional claim, the executive branch must comply with the funding directives established by Congress.

Congressional opposition to administration move

The Trump administration had notified Congress of its plan in late August, sparking concern among lawmakers from both parties. The plan targeted money already approved for foreign assistance programs through the State Department and USAID.

Senate Appropriations Committee chair Susan Collins spoke out against the move, describing it as an effort to undermine established law. She argued that allowing such a tactic would erode Congress’s constitutional authority over federal spending.

The appeals court, echoing the lower court, noted that the administration did not meet the requirements for halting the funding. “Appellants have not satisfied the stringent requirements for a stay pending appeal,” the judges wrote.

Ali's approach addressed by appeals court

Judge Ali stressed that despite months of opportunity, administration officials never developed a defensible legal argument for the rescission attempt. He highlighted that Congress’s decisions on appropriations form the foundation of government spending and cannot be casually set aside.

Ali stated that defendants offered “no justification” to displace the fundamental expectation that congressional directives must be honored. He pointed out that unless a final court order ruled otherwise, the executive branch must abide by those mandates.

The appeals court’s decision built directly upon Ali’s earlier findings, rejecting the administration’s reasoning and insisting that the money flow as Congress intended.

What happens next?

The ruling requires the immediate release of the $4.9 billion that had been frozen. The funds were originally allocated to support a range of diplomatic and development programs abroad through the State Department and USAID.

The case underscores the recurring tension between the executive and legislative branches over control of federal spending. While presidents have some limited tools to influence appropriations, courts have consistently reinforced that Congress holds the ultimate power of the purse.

By blocking the rescission attempt, the courts signaled a firm stance that future administrations will face similar constraints if they try to bypass congressional spending decisions.

Broader implications awaited

The dispute over the $4.9 billion reflects broader debates over the role of foreign aid and the limits of executive power. Trump has often been critical of U.S. foreign assistance, framing it as wasteful and misdirected.

However, both chambers of Congress had already endorsed the funding, and lawmakers from across the political spectrum expressed concern that bypassing that decision would set a dangerous precedent. The appeals court ruling appears to validate those concerns.

The judgment closes another legal chapter in Trump’s effort to reshape government spending priorities outside of Congress, reaffirming the courts’ role in defending the separation of powers and the legislative branch’s control over appropriations.