A federal appeals court ruled Wednesday that the government can continue withholding billions of dollars in foreign aid funding that Congress had appropriated for fiscal year 2024.

The U.S. Court of Appeals for the D.C. Circuit voted 2-1 to overturn a district court injunction that had required the State Department and U.S. Agency for International Development (USAID) to release the full amount of foreign assistance funds Congress allocated for the budget year. The disputed funds include nearly $4 billion for global health programs and more than $6 billion for HIV/AIDS initiatives.

On Jan. 20, Trump issued an executive order directing a 90-day pause on foreign development assistance for policy review. The order proclaimed that “the United States foreign aid industry and bureaucracy are not aligned with American interests” and mandated that “no further United States foreign assistance shall be disbursed in a manner that is not fully aligned with the foreign policy of the President.”

Within days, the State Department and USAID suspended or terminated thousands of grant awards, prompting two groups of aid recipients to file lawsuits challenging the freeze. The plaintiffs included the Global Health Council, Small Business Association for International Companies, HIAS, Management Sciences for Health, and several other organizations that receive substantial USAID funding.

U.S. District Judge Amir Ali initially sided with the aid organizations, issuing a temporary restraining order in February and later a preliminary injunction in March. Ali ruled that the Trump administration’s actions likely violated the separation of powers by impounding funds that Congress had specifically appropriated.

Writing for the majority, Circuit Judge Karen LeCraft Henderson, a George H.W. Bush appointee, concluded that the aid organizations “lack a cause of action to press their claims”. She was joined by Judge Gregory Katsas, a Trump appointee.

The majority ruled that the plaintiffs “may not bring a freestanding constitutional claim if the underlying alleged violation and claimed authority are statutory,” relying on the Supreme Court’s decision in Dalton v. Specter. The court determined that only the Comptroller General—head of the Government Accountability Office—has the authority under the Impoundment Control Act to challenge the president’s withholding of appropriated funds.

“The grantees may not reframe this fundamentally statutory dispute as an ultra vires claim either,” Henderson wrote, adding that “APA review is precluded by the Impoundment Control Act.”

Judge Florence Pan, a Biden appointee, issued a lengthy dissent criticizing the majority’s reasoning as “startling” and “erroneous”. Pan argued that the majority was allowing the president to “evade judicial review of constitutionally impermissible actions” and accused her colleagues of departing from “procedural norms that are designed to safeguard the court’s impartiality and independence.”

“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,” Pan wrote. She characterized the ruling as enabling “future illegal conduct” and warned it would undermine the separation of powers.

Pan also criticized the majority for addressing arguments that the government had not properly raised in its opening brief, calling it a departure from normal appellate procedure.

This circuit split may increase the likelihood that the Supreme Court will eventually review the case.