Trump White House rescinds memo on freezing federal grants, reversing course
President Donald Trump speaks to reporters on Jan. 21. (Photo by Jabin Botsford/The Washington Post)
The White House budget office on Wednesday rescinded an order freezing federal grants, according to a copy of a memo obtained by The Washington Post, after the administration’s move to halt spending earlier this week provoked a backlash.
In the memo distributed to federal agencies, Matthew J. Vaeth, acting director of the White House Office of Management and Budget, states that OMB memorandum M-25-13 “is rescinded.” That order, issued Monday, instructed federal agencies to “temporarily pause all activities related to obligations or disbursement of all federal financial assistance.”
The White House order freezing federal grants caused mass chaos and confusion across Washington, appearing to imperil government programs that fund schools, provide housing and ensure that low-income Americans have access to health care. States reported issues accessing funds under Medicaid, and even as of Wednesday, public housing authorities reported being locked out of their funding portal. White House spokeswoman Karoline Leavitt said Tuesday that assistance for individuals would not be affected.
The Trump administration withdrew the order a day after a federal judge in Washington temporarily halted its implementation until Feb. 3, allowing public health advocates, nonprofits and businesses - represented by the left-leaning group Democracy Forward - more time to challenge the directive’s legality. Separately, roughly two dozen state attorneys general filed their own lawsuit against the administration on Tuesday, arguing that the pause in federal spending has harmed their citizens.
Leavitt acknowledged that the initial budget office memo has been suspended but said the administration’s broader efforts to block spending it opposes remain in effect. Other executive orders approved by President Donald Trump but not rescinded - including a pause on foreign aid and on some clean energy funds approved by the Biden administration - appear to still be in effect, budget experts said. (The administration did issue humanitarian waivers Tuesday, allowing some foreign aid to go forward despite the pause.) Leavitt said the order was rescinded to make clear that the administration will comply with the federal order pausing the freeze and to end the court case.
“The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments,” Leavitt said in a statement that also blasted “dishonest media coverage” without giving any specific examples. “This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending. In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding.”
Speaking at the White House, Trump asserted Wednesday that the media had “purposefully” created confusion over whether the freeze would affect Social Security and Medicare. He characterized the pause as a “short-term freeze on certain discretionary spending payments … for us to quickly look at the scams, dishonesty, waste and abuse that’s taken place in our government for too long.”
“The American people strongly support these efforts,” Trump said. “We are fighting to get the most out of every single tax dollar for our great citizens.”
Republicans in Congress echoed Trump’s complaint. Hours before the White House rescinded the freeze, Rep. Tom Emmer (Minnesota), the No. 3 Republican in the House, called coverage of OMB’s order “the first ridiculous media hoax of 2025.”
The OMB “review of certain spending priorities should be seen for what it is: good governance,” Emmer said from the GOP’s policy retreat at Trump’s golf resort outside Miami. “… I, for one, am glad to have a president in the White House who is delivering on his promise to get our fiscal house in order.”
The fight also spilled into Wednesday’s confirmation hearing for Robert F. Kennedy Jr. to serve as the nation’s top health official, with lawmakers trading barbs over whether Medicaid funding had truly been paused - as dozens of officials around the country warned Tuesday - or whether it was a media hoax.
“It’s been proven false overnight,” said Sen. Mike Crapo (R-Idaho), the Senate finance panel’s chairman. Sen. Ron Wyden (D-Oregon) countered by referencing the “bedlam” that Medicaid officials reported Tuesday.
The rescinded order reflects what is likely to be just one of many initial battles over the Trump administration’s attempts to assert far more control over the federal budget. Trump and Russell Vought, his nominee to head the OMB, have maintained that the executive branch should have far more discretion to cancel federal spending without congressional approval.
“While this is extremely welcome news, it only stops those illegal” pauses in government funding approved by the budget office’s funding freeze, said Bobby Kogan, a former Biden administration official at the Center for American Progress, a left-leaning think tank.
Vought and Mark Paoletta, tapped as an attorney for the White House budget office, have said the administration will challenge a 1974 budget law that limits presidential authority to cancel spending. Paoletta has asserted that the law is “unconstitutional,” arguing it reverses presidential authority to cancel federal funds that dates back to the nation’s founding.
Jacob Bogage and Dan Diamond contributed to this report.
