New 'No Presidential Payouts Act' Blocks Federal Funds for President's Legal Bills in Civil and Criminal Cases

The newly introduced No Presidential Payouts Act is a short, sharp piece of legislation aimed squarely at the executive branch. Simply put, this bill prevents federal money from being used to cover the legal defense costs, settlements, or judgments incurred by a sitting President, their relatives, or any associated organizations in civil or criminal cases. This isn't just a suggestion; the bill explicitly overrides existing laws (specifically section 1304 of title 31, U.S. Code) that govern the use of the Claims and Judgment Fund.

Cutting the Legal Safety Net

This bill focuses on two major restrictions. First, it bans the Department of Justice from using the Claims and Judgment Fund to pay for the President’s legal costs. For those unfamiliar, the Claims and Judgment Fund is essentially the government’s checkbook for paying court judgments and settlements when the U.S. government loses a case. The bill ensures this fund cannot be tapped to bail out the President or their family if they are sued or face criminal charges. Second, and broader, the bill prohibits the use of any Federal funds—meaning taxpayer dollars appropriated for any government purpose—to cover these same costs.

What does this mean in practice? If a President is sued in a civil matter or faces criminal charges, they (or their family/associated groups) must foot the entire bill themselves, through private donations, personal wealth, or other non-federal sources. This removes a potential avenue for the President to access government funds for personal legal defense, which is a significant shift in financial accountability.

Who Pays the Lawyer?

For the average taxpayer, the benefit is clear: your tax dollars will not be diverted to cover the private legal expenses of the President or their relatives. This targets the growing concern that powerful officials might use public funds to shield themselves from personal legal accountability. Think of it as ensuring that the President, like any other citizen, is personally responsible for the financial fallout of their legal battles, whether they involve a business dispute or a criminal inquiry.

However, the bill introduces some significant practical challenges and potential vagueness. The language restricting funds for “any organization connected to the President or that relative” is broad. Does “connected” mean a former business partner, a charity founded years ago, or a current employer of a relative? This lack of precise definition could lead to political fights over which entities are restricted from receiving federal funds or contracts simply because of a loose connection to the President. If a President’s cousin works for a company with a federal contract, could that company be deemed “connected” and face restrictions if the cousin gets sued? The bill doesn't clarify where that line is drawn.

The Real-World Impact on the Executive

The immediate impact is that the President and their close circle lose access to a financial backstop that is available under current law for certain government-related legal expenses. This is a high-stakes restriction that forces the executive branch to rely entirely on private funding for any legal defense related to personal or pre-presidency conduct. While this promotes financial accountability, it also raises the stakes significantly for any President facing litigation. The bill is a clear move to ensure that the cost of personal legal defense remains a private matter, not a public expenditure.