A federal appeals court panel cleared the way on Wednesday for the Trump administration to continue refusing to spend billions of dollars in foreign aid, finding that aid organizations that had sued to recover the money lacked the legal right to bring the challenge.
The decision, which centered on President Trump’s authority to withhold funding already appropriated by Congress, handed the White House a significant legal victory. Since taking office, Mr. Trump and his advisers have consistently claimed expansive authority to freeze federal dollars allocated for projects they have endeavored to snuff out — an action known as impoundment that legal scholars and aid groups had considered to be strictly limited under federal law.
But by a 2-to-1 vote, the appeals court panel ruled that under the Impoundment Control Act of 1974, only the Government Accountability Office, which serves as Congress's independent watchdog, could challenge the president’s efforts to withhold foreign aid funding. The panel found that groups that receive government funding — in this instance, a number of global health nonprofits — do not have cause to challenge Mr. Trump’s funding cuts.
The decision lifted a lower court’s order that had required the administration to continue processing foreign aid payments with funds Congress had budgeted.
In finding that the Trump administration had unlawfully delayed money Congress appropriated, a lower court previously required the government to make available all the foreign assistance funds Congress allocated for fiscal year 2024.
That included nearly $4 billion to spend on global health activities until September, and more than $6 billion for H.I.V./AIDS programs through 2028. The decision on Wednesday noted that the administration had “paid out substantially all the amounts owed on existing contracts” as required by the lower court ruling.
Barring further action from the courts, the ruling gave the Trump administration leeway to slash the funds, cut the agencies that administer foreign assistance programs and terminate entire aid programs that Congress had funded.
On numerous occasions this year, the Government Accountability Office has found that the Trump administration illegally impounded funds authorized by Congress, including money meant for public infrastructure and early child education. By June, the legislative watchdog also had more than 40 additional investigations underway, with some of the impoundment inquiries focused on the government’s handling of foreign aid, according to documents previously viewed by The Times.
Under the law, the accountability office has the power to sue to force the release of impounded funds, but it has not done so thus far, letting lawsuits launched by outside groups play out. The agency’s leader, Comptroller General Gene Dodaro, previously described a legal challenge as a last resort.
Elisha Dunn-Georgiou, the president of the Global Health Council, one of the groups involved in the lawsuit, said the organization would continue to fight to make the funding available again.
“While today’s decision is very disappointing, Global Health Council will continue our efforts to protect the global health sector and the critical work being done around the world,” she said in a statement.
Wednesday’s ruling was the latest in a series of decisions by appeals courts that have in recent weeks overturned efforts by lower court judges to curb sweeping actions by Mr. Trump.
On his first day in office, President Trump announced a review of the country’s foreign aid policies. At the same time, he froze foreign development assistance and humanitarian aid while top aides, including Secretary of State Marco Rubio, began dismantling the United States Agency for International Development, the main U.S. aid agency, and carried out a campaign to end funding for global projects.
Days later, the Trump administration also placed a moratorium on new funding for projects administered by the State Department or U.S.A.I.D. Both agencies followed by suspending or terminating thousands of grants and denying invoices.
A number of foreign aid nonprofits that had for years depended on federal funding filed lawsuits early this year, arguing that President Trump had overstepped his authority and usurped Congress’s power over spending.
Lower court judges in several cases agreed, finding that in unilaterally shutting down various funding streams, the Trump administration violated the separation of powers between Congress and the executive branch. In March, Judge Amir H. Ali of the Federal District Court for the District of Columbia blocked the cuts involving foreign aid and ordered the Trump administration to keep paying out funds Congress had set aside.
Judge Karen L. Henderson, an appointee of President George H.W. Bush, who wrote Wednesday’s majority opinion, said the federal law lays out a clear process for challenging impoundment, requiring the head of the G.A.O. to sue on Congress’s behalf. She wrote that the grant recipients who had brought the early lawsuits in February could not, therefore, rely on the claim that Mr. Trump had exceeded his authority.
Lawsuits challenging the president, she wrote, “cannot be recast as constitutional claims through the mere invocation of the separation of powers.”
Judge Gregory G. Katsas, a Trump appointee, voted along with Judge Henderson.
In a dissenting opinion, Judge Florence Y. Pan, who was appointed by President Joseph R. Biden Jr., wrote that courts can and should still scrutinize instances in which a president appeared to have unlawfully overridden Congress. She said that applied even though Congress has tasked the head of the G.A.O. with bringing claims under the impoundment act.
“The court’s holding that the grantees have no constitutional cause of action is as startling as it is erroneous,” she wrote. “The majority holds that when the president refuses to spend funds appropriated by Congress based on policy disagreements, that is merely a statutory violation and raises no constitutional alarm bells.”
Tony Romm contributed reporting.