Blanche Rescinds $1.8B Fund, Clearing Path for AG Vote

Acting Attorney General Todd Blanche formally rescinded a controversial $1.8 billion anti-weaponization fund late Sunday in a direct bid to salvage his confirmation as attorney general. The move came after Republican Senators John Cornyn of Texas and Thom Tillis of North Carolina refused to advance his nomination without written assurances that the fund, created through a May settlement with the IRS, would not proceed.

The fund stemmed from President Donald Trump's dropped $10 billion lawsuit against the IRS over leaked tax returns. It was pitched as compensation for those allegedly targeted by prior administrations, but critics immediately flagged it as a vehicle to funnel taxpayer money to Trump allies and even some January 6 defendants. The settlement also granted Trump, his family, and businesses broad protections from IRS audits, a provision that drew bipartisan skepticism.

Blanche's written order explicitly terminated the May 18 directive establishing the fund. No members had been appointed, no money transferred, and no claims paid, according to the Justice Department. The acting attorney general said the step followed weeks of discussions with senators and fulfilled repeated verbal commitments that the effort was dead. He also narrowed the audit immunity to apply only retroactively to the named plaintiffs in the original lawsuit.

Cornyn's office confirmed an agreement had been reached, clearing the path for a Senate Judiciary Committee vote on Blanche scheduled for Tuesday. Tillis had not commented publicly by Sunday night. Both retiring Republicans had insisted on formal documentation after Trump continued voicing support for the fund, including recent comments that he wished it were not dead and would pursue it through Congress if needed.

Trump responded with sharp public attacks on the senators, accusing them of undermining his agenda and vowing the fund would return. His outbursts highlighted ongoing friction within the Republican conference over the scope of executive power and the use of settlements to shield the president from oversight. Tillis later described Trump's resistance as evidence that the fund must be permanently eliminated to prevent any future revival.

The episode exposed limits on Trump's ability to push controversial initiatives through his own party. While Democrats on the committee have signaled uniform opposition to Blanche's confirmation, the internal Republican standoff forced the administration to abandon a key element of the IRS deal. The fund's original design raised immediate concerns that payments could reach individuals convicted of assaulting police during the Capitol riot, a point that fueled early criticism even from some Republicans.

Blanche's rescission also left the narrower tax immunity provisions intact in modified form, though progressive outlets noted that the fine print appeared to reaffirm protections for Trump and his family without full termination. The Justice Department maintained that all concerns raised by senators had been addressed through good-faith negotiations.

The standoff comes as the administration seeks to install Blanche permanently at the Justice Department amid broader questions about its handling of high-profile legal matters. With the committee vote looming, the written order appears to have satisfied the holdout senators for now, though Trump's repeated expressions of frustration suggest the underlying tensions remain unresolved.