Trump White House Rescinds Memo on Federal Funding Freeze, but Says Exec Order Remains in Effect

The Trump administration rescinded a memo freezing most federal grants and loans on Wednesday, one day after the measure was temporarily paused by a federal district judge, though the White House clarified shortly thereafter that the underlying executive order remains in effect.

U.S. District judge Loren L. AliKhan issued an administrative stay on the measure on Tuesday night, moments before it was supposed to go into effect. The order had blocked the freeze from going into effect until at least Monday after a network of nonprofit groups filed a legal challenge against the measure.

Office of Management and Budget (OMB) director Matthew Vaeth previously ordered agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance” and “identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements” on Monday evening.

Moments after the OMB memo was withdrawn, White House press secretary Karoline Leavitt clarified that the rescission was done in response to the court injunction and the underlying order remains in effect and will be enforced, presumably if the Trump administration prevails in court. 

The tweet was issued after many outlets, including National Review, reported that the federal funding freeze was rescinded.

Leavitt explained on Tuesday afternoon that the directive was the Trump administration’s effort to be “good stewards for tax dollars.”

“I think this is a very reasonable measure,” she said, adding that the freeze would allow the government time to cut back diversity, equity, and inclusion initiatives that Trump opposes. Programs “that [provide] direct benefits to individuals,” including the Supplemental Nutrition Assistance Program (SNAP), and Medicare and Social Security would not be affected, Leavitt added.

The act is “not a blanket pause on federal assistance,” Leavitt clarified.

“What does this pause mean? It means no more funding for illegal DEI programs,” she said. “It means no more funding for the Green New Scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies, no more funding for Green New Deal social engineering policies.”

On Wednesday, a Trump administration official sent the following memo, according to CNN: “OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

The reversal came after widespread confusion about the sweeping nature of the order.

While some Democratic lawmakers reported that their states’s online Medicaid portals went down after the OMB issued its memo, Leavitt said on X that the outage was not related to the freeze.

“The White House is aware of the Medicaid website portal outage. We have confirmed no payments have been affected — they are still being processed and sent. We expect the portal will be back online shortly.”