The White House Office of Management and Budget (OMB) rescinded a memo on Wednesday that had ordered a “temporary pause” on federal funding, just one day after top officials defended the freeze as necessary to align government spending with President Trump’s priorities.
The decision comes after the freeze sparked widespread confusion across the country and was temporarily halted by a federal judge on Tuesday.
“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 EO’s on federal funding remain in full force and effect, and will be rigorously implemented,” said White House Press Secretary Karoline Leavitt.
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The now-rescinded memo, issued late Monday night, called for a pause on federal grants, loans, and other financial assistance programs, potentially affecting billions—or even trillions—of dollars in spending.
While White House officials said the freeze would not impact critical programs like Medicare, Social Security, or other direct assistance programs, though the lack of clarity left state governments, nonprofits, schools, and other organizations scrambling to determine whether they would be affected.
Adding to the chaos, technical outages affecting Medicaid reimbursement portals across the country further complicated the situation, leaving many unsure whether payments would be delayed or halted entirely.
The confusion provided an opening for Democrats, who launched their first significant and sustained attacks on the Trump administration since the president’s acquittal in the Senate impeachment trial.
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