Trump's $1.776B Fund Collides With Iran War Costs

The Justice Department opened on Monday a $1.776 billion compensation fund "for victims of weaponization" — the dollar figure chosen to evoke American independence, the money drawn from the Treasury's permanent Judgment Fund without congressional appropriation, and the first claimant was Michael Caputo, a former HHS spokesperson seeking $2.7 million. By Wednesday Capitol Police Officer Harry Dunn and Metropolitan Police Officer Daniel Hodges had sued, calling the structure "the most brazen act of presidential corruption this century" and invoking the Fourteenth Amendment's bar on paying "debts incurred for the support of an insurrection or rebellion." On Thursday Acting Attorney General Todd Blanche went to the Capitol's Mansfield Room to defend the fund to Senate Republicans, while more than ninety House Democrats filed a legal document to block it and Rep. Jamie Raskin (D-Md.) introduced the No Taxpayer-Funded Settlement Slush Funds Act. Senator Bill Cassidy (R-La.) — fresh off losing his Louisiana primary, now the fourth GOP senator to back an Iran war powers resolution that advanced 50-47 on Tuesday — wrote on X that "the administration should bring it to Congress to decide." Senator Dick Durbin (D-Ill.) demanded eligibility documentation by 28 May.

The bill for the Iran war landed across several registers on the same day. A Congressional Research Service report cited by Air Force Chief of Staff Gen. Ken Wilsbach at a House Appropriations subcommittee put US military aircraft losses at 42 — fighter jets, helicopters and drones — since the war began on 28 February, at a replacement-cost estimate of $29 billion that Wilsbach said the $1.5 trillion defence budget cannot absorb. CNN, citing US intelligence assessments, reported that Iran has resumed drone production faster than expected after the US-Israeli strikes, aided by Russia and China; analysts now place restoration of Iran's drone output potentially within months. At the retail level, Walmart told investors that the fuel surge driven by the Iran war was pulling consumer spending down: the company expects Q2 sales growth of 4-5%, down from 7.3% in Q1, with CFO John David Rainey noting that OBBBA tax-refund cushioning has now run out. Iranian MP Ahmad Bakhshayesh Ardestani, of the National Security and Foreign Policy Commission, told Euronews that Tehran's political leadership has restrained the military from striking US naval assets in the Persian Gulf — a statement carrying an implicit threat of retaliation if US vessels moved on Iranian ones.

In Tehran the negotiating posture hardened. Iran's Supreme Leader Ayatollah Mojtaba Khamenei issued a directive that the country's near-weapons-grade enriched uranium must not leave Iran, two senior Iranian sources told Reuters — a position that directly contradicts a clause Trump has reportedly committed to Israel, under which Iran's stockpile would be removed and the right to enrichment would be the subject of further negotiation. Iran has also published a map claiming military oversight over 22,000 sq km of the Strait of Hormuz under a newly created "Persian Gulf Strait Authority," building on the toll authority Tehran has run since the US enforced its naval blockade of Iranian ports on 13 April. The combination — uranium kept in country, an enforcement perimeter projected outward in the Strait — sets the framework Tehran will bring to the next round of US-mediated talks.

Domestic institutional pressure widened beyond the fund. President Trump swore in Kevin Warsh as Federal Reserve chair in a White House ceremony, after a 54-45 Senate confirmation — the narrowest margin for a Fed chair in the institution's history — that Democrats and economists framed as a test of the bank's independence in the face of presidential pressure to cut rates ahead of midterm elections. Separately, the Justice Department urged the Supreme Court not to hear HMTX Industries v. United States, arguing that Section 301 of the 1974 Trade Act grants the president broad discretion to expand tariffs without a new investigation — a doctrine that would underwrite the administration's authority to scale tariffs from $50 billion to over $300 billion in Chinese imports without further process.