The White House says it has rescinded a memo authorizing a federal freeze on hundreds of billions of dollars in grants and loans, which sparked widespread panic among millions of people who rely on government aid. It comes after a judge temporarily halted the order on Tuesday, only hours after it was signed by President Donald Trump and the memo was issued by the Office of Management and Budget (OMB). The judge paused the order until next Monday, after a lawsuit was filed by a group of organisations representing grant recipients. The new letter issued on Wednesday states “OMB Memorandum M-25-13 is rescinded.”
It is unclear what prompted the apparent U-turn. In a statement, White House Press Secretary Karoline Leavitt said the administration was still pursuing a freeze. “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo,” she said. “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.”
The BBC has asked the White House to clarify how it plans to continue in light of Trump’s decision to rescind the memo as well as the judge’s injunction.
Earlier this week, the acting head of the White House budget office had instructed agencies to “temporarily pause all activities related to obligations or disbursement of all federal financial assistance”. The office said the move was intended to give the new administration time to assess what grants and loans were in step with their agenda.
But the order prompted widespread confusion about which agencies and programmes would be impacted. An online portal used to access federal funds was briefly taken offline and aid groups warned about a suspension in services.
In response to the latest move, Democrats abruptly shifted a news conference scheduled for Tuesday on Trump’s move to end birthright citizenship to condemn the move to freeze all federal funding instead.
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