About the Judgment Fund
Prior to 1956, most judgments against the United States could not be paid from existing appropriations but required specific congressional appropriations for payment. In 1956, Congress enacted a permanent, indefinite appropriation ("the Judgment Fund") for the payment of final judgments which were "not otherwise provided for" by another source of funds.
This fund was intended to eliminate the procedural burdens involved in getting an appropriation from Congress to pay a particular judgment. It was also intended to result in prompter payments, reducing the amount of interest (where allowed by law) that accrued against the United States between the issuance and payment of an award.
In 1961, Congress modified the law to allow the Judgment Fund to be used to pay compromise settlements of actual or imminent litigation entered into by the Attorney General. The law creating the Judgment Fund has been codified at 31 U.S.C. § 1304.