The White House has abruptly rescinded a directive that threatened to freeze billions of dollars in federal assistance.
The notice from the Office of Management and Budget on Wednesday followed a federal judge’s decision that temporarily blocked Donald Trump’s administration from freezing funds across government agencies, with lawsuits accusing the president of brazenly unconstitutional threats to critical funding.
A two-sentence memo from acting White House Office of Management and Budget director Matthew Vaeth simply states that a previous directive is “rescinded,” and directs questions to government lawyers.
The office is still expected to continue reviewing government grants and assistance, and could try to block funding if officials believe recipients run afoul of Trump’s ideologically driven commands to abandon anti-discrimination and equity efforts outlined in a blitz of executive orders.
“This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo,” White House press secretary Karoline Leavitt said Wednesday. “Why? To end any confusion created by the court's injunction. The President's EOs on federal funding remain in full force and effect, and will be rigorously implemented.”
A lawsuit from 23 states sought a court order to immediately halt the administration’s order, which they say imperils billions of dollars in aid to their states.
On Wednesday, a federal judge presiding over that case — citing Leavitt’s own X post — said OMB’s “hugely ambiguous” order to implement the freeze appeared to be undercut by her statements.
A separate lawsuit from a coalition of nonprofit organizations and small businesses warned that the order “will have a devastating impact on hundreds of thousands of grant recipients” who depend on the steady flow of grant money that they’ve already been awarded.
On Tuesday, a judge granted their request for a temporary restraining order to block the order from going into effect.
Democratic senators are also demanding that a vote to confirm Trump’s nominee to lead OMB, Russell Vought, be postponed until he can answer whether he intends to issue a similar directive.
A group of Senate Democrats have called Vought — who has pushed Trump to ignore federal law that affirms Congress’s spending authority — “a clear and present danger to Congress’s Power of the Purse.”
Vaeth’s two-page memo this week directed federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance.”
That includes “other relevant agency activities that may be implicated” by Trump’s sweeping executive orders, “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo.
The memo sent nonprofits and public programs that support low-income families and vulnerable Americans into a tailspin Tuesday, fearing imminent cuts to disaster relief, healthcare, childcare, infrastructure support and groups that support homeless people and veterans, among a wide range of other programs that depend on federal funding, from suicide prevention to support for domestic violence survivors.
A subsequent memo from the White House to members of Congress on Tuesday sought to clarify the “pause,” which Leavitt told reporters is meant to “ensure that all of the money going out from Washington, D.C., is in line with the president’s agenda.”
Democratic officials and legal analysts have argued that Trump’s order violates Congress’s constitutional authority and federal law that prohibits the president from blocking funds appropriated by lawmakers.
“This is an important victory for everyone who made their voices heard,” Democratic Senator Patty Murray said. “Undoubtedly, the Trump admin caused serious chaos [and] real harm through a combination of sheer incompetence, cruel intentions, and disregard for the law. But real people made a difference by speaking out.”
