The White House has abruptly withdrawn a memo that authorized a freeze on hundreds of billions of dollars in federal grants and loans, sending shockwaves through millions of Americans who rely on government aid. The decision follows a swift legal challenge, with a federal judge issuing a temporary injunction on Tuesday, blocking the freeze mere hours after it was signed by former President Donald Trump and issued by the Office of Management and Budget (OMB). The order remains suspended until the following Monday as legal battles unfold.
A letter issued Wednesday confirmed the memo’s rescission, stating, “OMB Memorandum M-25-13 is rescinded.” However, the rationale behind the reversal remains murky.
Despite backtracking on the memo, White House Press Secretary Karoline Leavitt doubled down on the administration’s broader plan to halt funding.
“This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo,” Leavitt insisted. “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.”
The administration has yet to clarify its next steps in light of the legal challenge. Earlier this week, the acting head of the OMB had instructed federal agencies to “temporarily pause all activities related to obligations or disbursement of all federal financial assistance.” The stated goal was to reassess which grants and loans aligned with the administration’s policy priorities.
However, the directive sparked chaos. A federal online portal for accessing funds was briefly shut down, and aid organizations raised alarms over potential disruptions to critical services.
Political backlash erupted immediately. On Tuesday, Democrats scrapped a planned press conference on Trump’s proposal to end birthright citizenship, shifting focus instead to condemn the funding freeze.
Senate Minority Leader Chuck Schumer lambasted the move, calling it “lawless” and accusing the administration of prioritizing billionaires over working families.
“I don’t think this would have happened except for the outcry throughout America. And we in the Senate are working with our constituents to show that outcry. We’re going to keep fighting,” Schumer vowed. He also urged Trump to withdraw his nominee for OMB leadership, warning of future attempts to block funding.
The now-halted freeze was just one of several controversial executive actions Trump had pushed to slash government spending. Other orders targeted transgender rights and automatic birthright citizenship. Additionally, the administration floated an offer allowing federal workers to resign while continuing to receive pay for eight months, aiming to downsize the federal workforce.
Leavitt defended the funding pause earlier in the week, arguing it would curb government spending on “woke” gender initiatives and diversity programs. Some states reported issues accessing Medicaid funds, though the White House later assured the public that Medicaid, Social Security benefits, and other direct aid programs such as the Supplemental Nutrition Assistance Program (SNAP) would remain unaffected.
Although the funding freeze is temporarily blocked, the White House maintains that the original memo served its purpose by pushing federal agencies to align with the president’s executive orders. However, with mounting legal battles and political resistance, the fate of the funding freeze remains uncertain.