President Trump Unilaterally Cancels $4.9 Billion in Foreign Aid, Faces Legal Pushback

WASHINGTON, Aug. 29 - President Donald Trump has moved to rescind nearly $4.9 billion in congressionally approved foreign assistance, invoking a seldom-used “pocket rescission” authority and setting up a high-stakes clash with Capitol Hill.

In a letter sent Thursday to congressional leaders, Trump directed the Office of Management and Budget to cancel $4.9 billion slated for the State Department, USAID and United Nations peacekeeping operations, contending the funds conflict with his “America First” agenda. The maneuver, last employed by President Carter in 1977, takes effect if lawmakers do not pass implementing legislation within 45 days, effectively edging the deadline past the end of the fiscal year.

Democrats and one Republican senator blasted the move as unlawful. Senate Appropriations chair Susan Collins argued that a pocket rescission “blatantly infringes” on Congress’s exclusive power of the purse, echoing a Government Accountability Office ruling that such rescissions are illegal.

Legal experts predict swift court challenges. House Democrats say they will sue to block the rescission, while the White House insists the president is acting within his statutory prerogatives.

Federal Reserve Dismissal Hearing Delayed

Also on Friday, a federal court hearing on Trump’s attempt to remove Fed Governor Lisa Cook ended without a ruling, leaving Cook in place for now. U.S. District Judge Jia Cobb asked for detailed legal briefs by next Tuesday on whether allegations of mortgage fraud provide sufficient grounds for dismissal, signaling the case could advance to the Supreme Court and carry lasting implications for central bank independence.

Tariff Campaign Ruled Mostly Illegal

In a separate setback for Trump’s unilateral policy drives, a federal appellate court ruled that the bulk of his sweeping tariffs exceed presidential authority under the International Emergency Economic Powers Act. The decision bars the administration from sustaining most of its reciprocal and sector-wide import taxes, though the court stayed its ruling until Oct. 14 to allow for Supreme Court review. The ruling marks a major blow to Trump’s aggressive trade agenda and underscores judicial limits on executive power in economic policymaking.