US President Donald Trump’s budget office on Wednesday rescinded a memo freezing spending on federal loans and grants, less than two days after it sparked widespread confusion and legal challenges across the nation.
The memo, which was issued on Monday by the Office of Management and Budget, had frightened states, schools and organizations that rely on trillions of dollars from Washington.
Administration officials said the pause was necessary to review whether spending aligned with Trump’s executive orders on issues like climate change and diversity, equity and inclusion programs.
However, on Wednesday, they sent out a two-sentence notice rescinding the original memo. The reversal was the latest sign that even with unified control of Washington, Trump’s plans to dramatically and rapidly reshape the government have limits.
Administration officials insisted that despite the confusion, their actions still had the intended effect by underscoring to federal agencies their obligations to abide by Trump’s executive orders.
“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,” White House press secretary Karoline Leavitt said, blaming the confusion on the courts and news outlets, not the administration. “This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending.”
The vaguely worded order, legal pause and eventual cancellation left organizations confused and worried again about what might be next.
Nourishing Hope, which runs foods pantries, home meal delivery and an online food market in Chicago, gets about 20 percent of its food budget comes from the federal government. CEO Kellie O’Connell said the biggest issue when the memo surfaced was getting clear and accurate information so they could figure out how to plan for the coming months.
If their federal funds were frozen, O’Connell said, they could make it a few weeks, but the wider concern was the possible end of assistance, like food stamps, which would increase demand on her organization.
“If that were to significantly diminish or get eliminated, it will be nearly impossible for the charity food system to step up,” she said of food stamps. “It would be potentially catastrophic for our communities.”
On Tuesday, administration officials said programs that provide direct assistance to Americans, including Medicare, Social Security, student loans and food stamps, would not be affected. However, they sometimes struggled to provide a clear picture. Leavitt initially would not say whether Medicaid was exempted from the freeze, but the administration later clarified that it was.
The White House’s change in direction caught Congress off guard, particularly Trump’s Republicans allies who had defended him throughout the brief saga.
“This is Donald Trump. He throws hand grenades in the middle of the room, and then cleans it up afterwards,” US Senator Kevin Cramer said. “I just think the guy’s a genius.”
Cramer said the initial memo might have generated too much political heat, with red and blue states raising alarms over the funding freeze. The senator suggested Trump “maybe didn’t understand the breadth” of what had been proposed, while Democrats said the White House had overreached beyond what Americans want.
“Most people voted for cheaper eggs,” US Senator Martin Heinrich said. “They did not vote for this chaos.”
The funding pause was scheduled to go into effect at 5pm on Tuesday. It was stayed by a federal judge until at least Monday next week after an emergency hearing requested by nonprofit groups that receive federal grants.
An additional lawsuit by Democratic state attorneys general was also pending, and a hearing was held on Wednesday in federal court in Rhode Island. Chief Judge John McConnell said he was inclined to issue an order blocking any attempt at a funding pause, saying there was the possibility of “irreparable harm.”
After the initial memo was distributed, federal agencies were directed to answer a series of yes or no questions about each program by Feb. 7. The questions included “does this program promote gender ideology?” and “does this program promote or support in any way abortion?
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