by William L. Kovacs, ©2026
(Feb. 20, 2026) — On February 20, 2026, SCOTUS struck down the Trump tariffs, writing, “The Framers did not vest any part of the taxing power in the Executive branch.” Moreover, as expected, the difficult part of the decision, how to refund $133 billion of the taxes illegally imposed, is left unanswered. Justice Kavanaugh noted the process could be difficult.
President Trump has claimed that a Supreme Court ruling that the worldwide tariffs are illegal would place the country on “the brink of economic catastrophe.” Yes, it is a blow to President Trump’s ego, but the bigger problem is that Congress has set up a slush fund to automatically pay for the illegal conduct, along with all the other illegal conduct of the Executive Branch that results in a judgment against the U.S. or a settlement with the U.S.
Any repayment resulting from a court order is paid by the agency collecting the funds, if it has the resources to do so. That process is workable for small judgments. In this instance, the Executive Branch does not have the money. So, in its cavalier manner, the bill will be sent to Congress. Congress pays the bill by appropriating funds from taxation or by imposing more debt on our children. Congress, for decades, has paid for the Executive Branch’s mistakes through the Judgment Fund.
The Judgement Fund.
The Judgment Fund, 31 U.S.C. sec. 1301, is often referred to as the “mother of all slush funds.” It is a permanent, indefinite, and unlimited congressional appropriation that is continuously available to pay money judgments entered against the United States, as well as settlements for cases that are either in litigation or likely to be. The U.S. Congress has established the fund to cover “whatever amount is necessary” to pay for qualifying judgments and settlements. It established this fund so it would not have to concern itself with the tedious paperwork of paying the nation’s bills, even big bills.
Because it is a permanent, unlimited, and indefinite appropriation, the specifics of the amounts being allocated are not debated in Congress. The Department of the Treasury pays these claims as soon as the necessary paperwork is received. Notably, in 2016, President Obama used the fund to deliver $1.7 billion in cash to Iran, the return of $400 million in Iranian assets, and $1.3 billion in interest on those funds.
Over the years, the Judgment Fund has been used to pay for thousands of claims arising from the federal government’s illegal or negligent conduct. Among them were a $1.25 billion discrimination settlement with Black farmers and a $760 million settlement with Native American farmers and ranchers who alleged lending discrimination.
The bizarre aspect of the fund is that it is not publicly accessible and lacks a comprehensive ledger. Moreover, because many records are heavily redacted under the guise of privacy, the public has no clear picture of how much money has been paid out, or to whom. Until 2018, the Judgment Fund even paid harassment settlements for members of Congress, shielding them from personal financial responsibility for their actions.
Must the Congress pay?
Federal courts can issue judgments against the government; however, they cannot compel Congress to pay those judgments. The principle of separation of powers prevents the Judicial Branch from directly forcing Congress to appropriate funds. While the Executive Branch can submit judgments against it to Congress for payment under the Judgment Fund, it cannot compel Congress to appropriate more money, unless Congress honors the Judgment Fund Act and finds more money.
What are the potential consequences of leaving these judgments unpaid?
If Congress pays, it adds hundreds of billions in debt to taxpayers to cover the costs of a president’s unconstitutional actions. If Congress refuses to pay, it leaves importers with an uncollectible judgment against a country whose bond ratings have been downgraded several times this year. The most troubling aspect of the Judgment Fund is that it shields government officials from accountability while shifting all costs to taxpayers.
More troubling is that the Judgment Fund obscures the full cost of executive overreach.
Unless Congress restructures the operation of the Judgment Fund to demand transparency and accountability, taxpayers will continue to bear the financial burden of the government’s illegality and mismanagement.
William L. Kovacs, author of Devolution of Power: Rolling Back the Federal State to Preserve the Republic. It received five stars from Readers’ Favorite. His previous book, Reform the Kakistocracy, received the 2021 Independent Press Award for Political/Social Change. He served as senior vice president for the U.S. Chamber of Commerce and chief counsel to a congressional committee. He can be contacted at wlk@ReformTheKakistocracy.com
From what I have gathered, any increase in costs to USA’ lower and middle class, and seniors, alleged to be due to tariffs would be offset by the larger income tax refunds to come. [That is not to say I think tax rules or anything our government and others agree to is permanent – the Minsk Agreements stand in stark evidence of that – with the exception of the curious commitment to Zionism.] Beyond that, I agree with tariffs because they charge those individuals that are poor stewards of the environment (not talking about the always obvious scam that autogenic climate change was), materialistic, the most. My last major new purchases were made in 2012, a washer and dryer. If you want to buy or lease a new office building, apartment or condo complex, or home, car or whatever, I should not have to subsidize your investment or showing-off. And finally, I was and am holding onto hope that tariffs could be used to get rid of personal income taxes for obvious reasons related to personal privacy, the police state, downsizing government and so on. Yeah, I’m a dreamer (Not a Dreamer).
This gets weird. It is a case of the supposedly smartest legal minds in America not thinking this through. They got part one. Refund the tariffs. But they missed part two: President Trump invoking national security to continue collecting tariffs. So, eventually, he gets the money anyway. So, SCOTUS in its infinite wisdom creates a system that hurts the American economy while effectively accomplishing nothing. Way to go Judge Orwell, oops, I meant Justice Roberts.
Here’s the thing that’s always overlooked by those who wish to gain control by nefarious methods and means.
What they use to wrestle power always comes home to roost in some likewise manner, and more often than not twofold.
It’s a lesson taught from the Bible to Shakespeare.
It would seem that the illiterate are the ones who are used as pawns to act the part of the downtrodden, as if fresh water and washing machines have been denied them and can only be accessed by Trump and his MAGA followers.
The party offended are those who are the patriots; all others render themselves targets for wallowing in the gutter with the likes of Chuck Schumer and the viewers of ‘The View,’ and those who protest against ICE as if the murder of Laken Riley was a righteous and needful murder to be celebrated, which they do by protesting the very people – ICE — who are just trying to protect everyone from the very bad ones.
Judges are the weak link in the Republic and the Supreme Court is no exception.