US to finish $671 million in foreign aid payments nearly two weeks after court deadline

By Brendan Pierson

(Reuters) -U.S. President Donald Trump's administration expects to finish paying about $671 million owed for completed work to foreign aid organizations suing it over its sweeping shutdown of most U.S. foreign aid work by Friday, nearly two weeks after a court-ordered deadline, according to a court filing.

The Justice Department also said in a late-Wednesday filing in Washington federal court that it anticipates payments owed to organizations not part of the litigation to be completed by April 29.

The total owed to all organizations is close to $2 billion, the department previously said.

The case is one of several fueling concern that Trump is pushing the boundaries of executive power at the expense of the federal judiciary, which under the U.S. Constitution is a co-equal branch of the American government. Trump critics and some legal experts have expressed concern over a potentially looming constitutional crisis if his administration openly defies judicial decisions.

U.S. District Judge Amir Ali had ordered the administration to pay the full $671 million owed to the plaintiffs by Monday, March 10, and to process at least 300 payments per day to others. The administration said in Wednesday's filing it had processed 313 payments per day, including to plaintiffs and others, since March 10.

The plaintiffs, which are companies and nonprofits that contract with or receive grants from the U.S. Agency for International Development and the State Department, have accused the administration of repeatedly defying Ali's orders to release foreign aid funds.

Justice Department lawyers have said in court filings that USAID, which has fired or put on leave much of its personnel and shuttered its headquarters, and the State Department were simply unable to process the payments as quickly as Ali ordered because of a new review process. Plaintiffs have called that process a deliberately self-inflicted obstacle, pointing out that the agencies had previously processed thousands of payments per day.

The plaintiffs sued the administration in early February to lift the blanket freeze on foreign aid payments ordered by the Republican president on his first day in office, and to undo the dismantling of USAID under the oversight of Trump's billionaire ally Elon Musk and the Department of Government Efficiency that he spearheads.

A judge in a separate case ruled on Tuesday that Musk and DOGE likely violated the U.S. Constitution in "multiple ways" by moving to shut down USAID, and blocked them from taking any further steps against the agency.

On February 13, Ali ordered the administration to stop enforcing Trump's freeze, but the administration kept nearly all of the funds frozen anyway, arguing that its contracts and grant agreements gave it the authority to do so despite the order. The judge repeatedly ordered the administration to comply, and eventually set a February 26 deadline for making all $2 billion in payments for work done before February 13.

The administration immediately appealed to the U.S. Supreme Court, which on March 5 declined to block Ali's order but told him to consider "feasibility" in setting deadlines. Ali set the new March 10 deadline the next day.

In the meantime, the administration announced that the original foreign aid freeze was lifted, and that it had made final decisions to terminate most of its foreign aid contracts following a review.

The plaintiffs are continuing to challenge those terminations, which they argue were not based on a genuine review, citing internal communications from administration officials ordering staffers to terminate hundreds of contracts at a time and to find legal rationales for doing so.

Ali in a preliminary ruling last week declined to order the agreements restored, though he found that the U.S. Constitution requires the administration ultimately to spend all of the money appropriated by Congress for foreign aid.

(Reporting by Brendan Pierson in New York; Editing by Alexia Garamfalvi and Richard Chang)