The White House Office of Management and Budget (OMB) issued a new memo on Wednesday, Jan. 29, rescinding previous directives to pause loans, federal grants and some assistance programs. The move comes amid nationwide uncertainty spurred during the week of Jan. 27 about what programs will be affected.
What was the federal funding freeze?
The Trump administration planned to comb through how taxpayer dollars are being spent across several government agencies, the OMB’s office implemented a temporary freeze on Monday. White House officials said the freeze is a crucial step in verifying federal spending aligns with President Trump’s plans and executive orders.
Why did the funding freeze not take effect?
On Tuesday, a federal judge issued an injunction hours before the federal freeze was set to take effect. The order blocked the administration from moving forward until all nonprofits, businesses and other government agencies detail how the move would affect them and legally change the pause.
The White House worked to clear up some of the confusion, confirming Americans will still receive Medicaid or food assistance. Government agencies reported some employees and citizens were able to access the portals. The issue was later fixed Tuesday, Jan. 28.
Why did the White House OMB rescind the memo?
Press Secretary Karoline Leavitt said the court’s decision compounded with “dishonest media coverage” is creating confusion leading the OMB to cancel their memo.
She emphasized on X, that the federal funding freeze has not been rescinded and Trump’s executive orders to control government spending remains in “full force and effect.”
This includes a pause on foreign aid or any funding for clean energy projects previously approved by the Biden administration.
Twenty-three state attorneys general sued the Trump administration over the federal grant freeze. The coalition of attorneys said the decision impacted their communities and harmed its citizens.
