The Department of Justice has publicly reversed course on a controversial payment program tied to a settlement involving President Donald Trump. During testimony before a House Appropriations subcommittee on June 2, 2026, Acting Attorney General Todd Blanche said the department “is not moving forward” with the proposed $1.776 billion anti-weaponization fund.

The proposed fund, announced in a settlement emerging from a $10 billion lawsuit Mr. Trump filed against the IRS, had promised to make payments to people who claimed federal agencies had been improperly used against them. That plan rapidly became a flashpoint in Congress, prompting lawsuits and bipartisan unease that stalled other legislation.

Why the reversal matters

Blanche’s statement ended the immediate prospect that the DOJ would create the fund as part of the settlement. He emphasized that the department had previously agreed to comply with a temporary court order blocking payments, but his June 2 testimony made clear the fund will not proceed at this time. Republicans in the Senate responded quickly, describing Blanche’s words as the clarity needed to move forward on a separate, large-scale immigration and deportation funding package.

The fund’s cancellation has two immediate political effects: it removes a major complaint held by some Republican senators who said the program undermined taxpayer protections, and it reduces Democratic claims that the settlement functioned as a partisan giveaway. Still, significant questions remain about other elements of the settlement and the pending litigation challenging it.

Settlement terms and ongoing legal scrutiny

While Blanche disavowed the fund, he also said the Justice Department will uphold other parts of the settlement. That includes an addendum that affected IRS scrutiny of past returns for the president and members of his family and businesses. Critics labeled that provision a form of de facto immunity, while the DOJ described it as a standard litigation concession that removes certain ongoing audits — not a blanket, forward-looking protection.

The settlement and its components are under judicial scrutiny. A federal judge in Florida who initially presided over the president’s IRS lawsuit has asked pointed questions about whether the litigation and the settlement were appropriate, noting the unusual circumstance of the president effectively being a party on both sides of the dispute. That judge has sought additional filings from the parties as she considers reopening or reexamining the case.

Parallel litigation and temporary court orders

Other suits are underway too. A case filed in the Eastern District of Virginia challenged the fund and led to a temporary freeze on any payments while the court considers the claims. Groups including Democracy Forward initiated legal action, arguing the fund was legally and procedurally flawed. Blanche’s public announcement that the department will not move ahead with the fund does not automatically dismiss those suits; courts may still require written commitments or further legal steps to resolve them.

Reactions from Capitol Hill

Senate Republicans had privately warned that the anti-weaponization fund was blocking progress on a roughly $70 billion immigration and deportation package designed to finance enforcement for the remainder of the administration’s term. Senate Majority Leader figures and rank-and-file senators held closed-door discussions to decide whether the bill could proceed if the fund was withdrawn.

Some senators indicated Blanche’s testimony gave them the political cover to advance the immigration package through marathon amendment votes, while others said uncertainty remained. Republican voices demanded written assurances; several lawmakers wanted the White House and DOJ to clarify whether the temporary court rulings effectively nullified both the fund and audit protections embedded in the settlement.

Democratic pushback and proposed legislative fixes

Democratic leaders vowed to keep pressing. Senate Minority Leader Chuck Schumer called administration promises insufficient and said he planned to propose an amendment during debate on the immigration bill that would permanently bar any such fund and rescind provisions he described as special tax immunities for the president’s family.

Democrats framed the settlement as a partisan payoff that had to be stripped from any must-pass legislation. Even with Blanche’s announcement, they argued that written reforms and statutory prohibitions would be necessary to ensure comparable measures could not be created in the future.

What happens next

Blanche’s testimony removed the immediate barrier to Senate action on immigration funding, but it did not settle the broader legal and political disputes that spawned the fund. Courts will continue to consider the challenges to the settlement and its documents. On Capitol Hill, negotiations over the immigration package and potential amendments are likely to continue as lawmakers demand clearer legal language and, for some, written guarantees from the administration.

In short, the announcement marks a tactical retreat by the Justice Department on the anti-weaponization fund, yet it leaves intact the most contested features of the underlying settlement and the unresolved litigation that surrounds them. Lawmakers, judges and advocacy groups all remain active participants in deciding how — and whether — the controversy will be closed.