The Justice Department on Tuesday dropped a contentious plan to create a US$1.8 billion compensation program that critics had denounced as a "slush fund" for President Donald Trump's political allies.

Senate Majority Leader John Thune, R-S.D., had previously said Republicans were in discussions with the White House about changing the fund.

Trump administration temporarily halts controversial $1.8 billion fund for allies following court ruling ahead of June 12 hearing.

Not even Donald Trump’s own party could get behind the fund.