President Donald Trump has dramatically rescinded his order freezing federal grants, according to a new memo from the budget office.
The stunning U-turn came after the original direction caused chaos as government agencies were unsure which of their programs were affected.
Trump officials have argued funding should be put on hold while they ensure no government programs are ‘woke,’ and that all are in line with executive orders Trump signed last week abolishing the Biden administration’s DEI agenda.
But the order, issued on Tuesday, led to Medicaid portals being temporarily shut down, and aid groups warned lives were in danger as critical funding for vaccines and other health issues was frozen.
On Wednesday, Matthew Vaeth, acting director of the White House Office of Management and Budget, sent a new order to government officials stating that the first one had been ‘rescinded.’
However, there was more confusion as, moments later, White House press secretary Karoline Leavitt declared the funding freeze was not being dropped after all, and grants were still under review.
The first order had told federal agencies to ‘temporarily pause all activities related to obligations or disbursement of all federal financial assistance.’
It paused federal grants, loans and other financial assistance which could have totaled trillions in funding.
Twenty-two states and Washington, D.C., sued, immediately challenging the order in court and a district judge put a freeze on it late Tuesday night.
Leavitt said: ‘This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction.
‘The President’s executive orders on federal funding remain in full force and effect, and will be rigorously implemented.’
President Donald Trump rescinded his order freezing federal funds
On Tuesday, Leavitt had attempted to clear up questions about how the funding freeze would work, and who was affected.
‘This is not a blanket pause on federal assistance and grant programs from the Trump administration,’ she said.
Trump officials argued critical funding pipelines like Medicare, Social Security and veterans’ care would not be affected.
They also said it was a temporary measure as funding streams were reviewed.
But after several states reported the Medicaid portal was down, the OMB on Tuesday afternoon stated that ‘mandatory programs like Medicaid and SNAP (food stamps) will continue without pause.’
The original order wanted officials to review more than 2,000 programs and required federal agencies to document whether each program has any funding related to undocumented immigrants, climate policy, diversity programs or abortion.
The agencies were required to provide their responses to the OMB in less than two weeks.
Democrats blasted the spending freeze on Capitol Hill on Tuesday before a judge temporarily halted it
Democrats and even some Republicans criticized the move. Republicans said the White House needed to better explain what was affected.
Sen. Patty Murray of Washington and Rep. Rosa DeLauro of Connecticut – two top Democrats in Congress – wrote to the White House, outlining their ‘extreme alarm’ with the idea of a broad pause in grants.
‘The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,’ the lawmakers wrote.
‘We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.’
Alexandria Ocasio-Cortez, the Democratic congresswoman, added: ‘This is Trump’s first major loss. When we fight, we win.’
