Washington — The White House Office of Management and Budget on Wednesday walked back a memo that ordered a freeze on federal assistance, less than two days after the directive led to chaos and confusion around the country as to what programs would be impacted.
The latest two-line memo from acting Director of the Office of Management and Budget Matthew Vaeth states that the earlier directive is rescinded. It directs those with questions about implementing President Trump’s executive orders to contact the general counsels at their agencies.
“In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage,” said White House press secretary Karoline Leavitt on Wednesday. “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. This action should effectively end the court case and allow the government to focus on enforcing the president’s orders on controlling federal spending.”
She said Mr. Trump will take more action in the coming weeks and months to address federal funding.
The White House sent shockwaves when it issued the guidance late Monday that requested agencies temporarily pause “to the extent permitted by law” grant, loan or federal financial assistance programs that were implicated by Mr. Trump’s executive orders. The executive orders listed include those involving immigration, energy, diversity, equity and inclusion, or DEI, programs, and gender ideology.
The memo, from Vaeth, noted that $3 trillion was spent on federal assistance programs in 2024. It directed agencies to submit to the White House budget office by Feb. 10 detailed information on the programs, projects or activities subject to the funding freeze. The pause was set to take effect by 5 p.m. Tuesday.
The full scope of the directive was not clear, and it left nonprofits, small businesses, universities and other entities scrambling to determine whether they would be impacted, and congressional offices faced an onslaught of questions from constituents and organizations fearing they would lose federal dollars.
While the White House’s memo stated Medicare or Social Security benefits would not be impacted, state Medicaid agencies, federally-funded Head Start early education programs and community health centers said they were cut off from accessing a web portal run by the Department of Health and Human Services.
White House press secretary Karoline Leavitt later clarified there was an “outage” that affected the portal, and said no payments were affected.
In addition to sowing confusion, the memo sparked numerous lawsuits, including from a coalition of nonprofits and Democratic state attorneys general. A federal judge in Washington, D.C., swiftly convened a hearing on a request from the nonprofit groups to temporarily block enforcement of the freeze, and agreed Tuesday to issue a brief pause to fully consider the matter.
Democrats, meanwhile, lambasted the move by Mr. Trump’s administration and accused him of depriving states, cities, towns, schools and hospitals of billions of dollars in federal support.
“This decision is lawless, dangerous, destructive, cruel. It’s illegal, it’s unconstitutional,” Senate Minority Leader Chuck Schumer said during a news conference Tuesday.
Sen. Patty Murray, a Democrat from Washington, requested Senate Republicans hold off on advancing the nomination of Russ Vought for director of the Office of Management and Budget.
Murray said Wednesday that the rescission of the memo was an “important victory” for the American people.
“Still, the Trump administration — through a combination of sheer incompetence, cruel intentions, and a willful disregard of the law — caused real harm and chaos for millions over the span of the last 48 hours which is still ongoing,” she said in a statement.
Republicans, meanwhile, largely defended the White House’s freeze before it was rescinded.
House Speaker Mike Johnson on Tuesday called it an “application of common sense.”
“I think this is something that the American people will approve of. I think they want us to be good stewards of the precious treasure of the American taxpayer,” he said.
Majority Whip Tom Emmer of Minnesota said it is “good governance.”
But Sen. Susan Collins, a Republican from Maine, said after the directive was reversed that it was “overreaching and created unnecessary confusion and consternation.”
Melissa Quinn is a politics reporter for CBSNews.com. She has written for outlets including the Washington Examiner, Daily Signal and Alexandria Times. Melissa covers U.S. politics, with a focus on the Supreme Court and federal courts.
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