Trump won't negotiate away his $1.8 billion IRS settlement, even to get his attorney general confirmed

Senate Judiciary Chairman Chuck Grassley has rescheduled a vote on Todd Blanche's nomination as attorney general for Tuesday, August 4, after the original vote, planned for July 30, was postponed. The shift is unlikely to signal an imminent breakthrough, although it buys the White House a little more time to secure the votes Blanche needs. However, that arithmetic remains complicated: given the Judiciary Committee's partisan composition, Blanche cannot lose a single Republican vote if his nomination is to be advanced to the full Senate.

The deadlock centres on two outgoing Republican senators, John Cornyn of Texas and Thom Tillis of North Carolina, both of whom are using their committee positions to block Blanche over a controversial settlement reached in May between Trump and the Internal Revenue Service. The $1.8 billion agreement resolved a lawsuit Trump had filed against the federal government following the unauthorised leak of his personal tax returns. Its terms are unusually generous. The administration proposed establishing an "Anti-Weaponization Fund" to compensate individuals who claim to have been unfairly targeted or prosecuted by the federal government, a category explicitly extended to those charged over the January 6 Capitol riot. The settlement also grants Trump, two of his sons, and the Trump Organization sweeping immunity from future IRS audits on their past returns — a provision critics say could amount to a personal windfall approaching $100 million.

Cornyn and Tillis, joined by other sceptical Republicans including Alaska's Lisa Murkowski, are demanding written and legally binding assurances that the payout fund will not go ahead, and that the audit immunity will be narrowed considerably. Blanche testified under oath during his confirmation hearing that the fund was already "dead". The White House, however, has declined to put any such commitment in writing, and that refusal has done real damage to Blanche's standing with the senators.

The problem is compounded by Trump himself, whose public remarks keep undercutting his nominee's assurances. Speaking at a Cabinet meeting at Camp David on July 31, and in a subsequent run of social media posts, Trump described the fund as "dead" before immediately adding that he wished it were not, and went on to defend the underlying principle of compensating what he called "victims of government abuse". He also turned on Cornyn directly, suggesting on Truth Social that the senator's objections to the settlement only began after Trump backed Ken Paxton, who went on to defeat Cornyn in the Texas primary. Tillis seized on these comments as confirmation of what the holdouts had suspected all along — that the fund remains very much alive — and cited them as justification for withholding support until formal written guarantees are provided.

Trump's conduct suggests that protecting the settlement and its accompanying tax shield matters more to him, at least for now, than securing Blanche's confirmation on any particular timetable. He has said he has no objection to temporarily withdrawing the nomination altogether. That would allow Blanche to continue as acting attorney general, a post he already occupies and can hold without Senate approval, while Trump waits for Cornyn and Tillis to leave office in January and resubmits the nomination to a more accommodating committee.

Several senators have warned that this is a riskier strategy than it looks. Cornyn and Tillis are retiring after bruising public disputes with Trump, but current forecasts suggest Democrats could make gains in next year's midterms, possibly even reclaiming a narrow Senate majority. Waiting out two departing critics could mean facing a far less favourable chamber altogether.

What is unfolding is the first significant Republican pushback against Trump's efforts to bend the Justice Department fully to his own will. Blanche, who once led Trump's criminal defence team, is caught between an administration unwilling to abandon a legally fraught settlement and a Senate increasingly reluctant to clear appointments it finds difficult to defend. With Louisiana's Bill Cassidy among those voicing concern about the department's potential weaponisation under Blanche's leadership, the outcome of Tuesday's vote remains uncertain.