U.S. President Donald Trump’s administration has rescinded a memo ordering a “federal funding freeze” on grants and loans, but insists that the freeze remains in effect. The memo, issued by the Office of Management and Budget (OMB), aimed to ensure that funds disbursed by federal agencies complied with Trump’s executive orders, which aimed to eliminate “Marxist equity, transgenderism, and green new deal social engineering policies.”
The memo sparked confusion about which programs would be affected and was suspected of causing Medicaid reimbursement portals to go offline for all 50 states. White House spokesperson Karoline Leavitt said in a tweet that the memo was rescinded to “end any confusion created by” a federal judge’s injunction blocking the memo from taking effect until Monday at the earliest.
Despite the rescission, Leavitt emphasized that the President’s executive orders on federal funding remain in full force and effect, and will be rigorously implemented. Acting OMB Director Matthew Vaeth issued a new memo rescinding the original memo and directing agencies to contact their General Counsel with questions about implementing the President’s executive orders.
The move has been met with criticism from lawmakers and advocacy groups. New York Attorney General Letitia James tweeted that the administration’s actions were causing “more confusion and chaos,” while Maryland Governor Wes Moore said that the funding freeze would “threaten our economy, our jobs, our communities, and our people.”
Senate Minority Leader Chuck Schumer called on Trump to “rescind Russell Vought’s nomination” for director of OMB, saying that the administration would continue to try to implement the funding freeze in other ways. Skye Perryman, CEO of Democracy Forward, credited the lawsuit filed by nonprofits challenging the original memo with leading the Trump administration to abandon the funding freeze.
