President Donald Trump is reportedly moving to abandon a proposed $1.8 billion federal compensation fund that was intended to pay individuals who claimed they were unfairly prosecuted by the government, following mounting political and legal backlash.
According to people familiar with internal discussions, Trump had been leaning for several days toward scrapping the plan, which had drawn criticism from lawmakers in both parties who argued it risked becoming a politically motivated payout mechanism favoring Trump allies.
The Justice Department has signaled a temporary pause in implementing the fund after a federal judge blocked any steps to activate it until at least a June 12 hearing. Officials said they disagreed with the ruling but did not clarify whether they would continue defending the fund in court.
The proposal had become increasingly controversial on Capitol Hill, with Republican lawmakers warning it lacked clear structure and safeguards. Some members of Congress suggested it could distribute large sums of public money in a way that appeared politically selective.
The fund emerged from a settlement tied to Trump’s lawsuit against the Internal Revenue Service over the alleged leak of his tax returns. As part of the arrangement, a mechanism was created to compensate individuals who claimed harm from federal prosecution decisions, though critics characterized it as an indirect way to benefit Trump supporters.
Legal challenges intensified after a federal judge reopened scrutiny of the underlying settlement, citing concerns about possible procedural irregularities. Another judge separately paused the fund pending review of its legality.
Republican leaders have since demanded clearer assurances that the fund would be fully terminated, warning that ambiguity from the administration is not sufficient. Democrats, meanwhile, have pledged legislative efforts to block the initiative entirely, describing it as a misuse of federal settlement mechanisms.
Senate Democrats have indicated they will continue pushing amendments and legislation aimed at shutting down the fund and preventing similar mechanisms from being used in the future.
The situation remains fluid, with officials noting that Trump could still reverse course depending on legal developments and political pressure in Congress.
