White House rescinds federal funding freeze memo

The White House on Wednesday rescinded its order to temporarily freeze the disbursement of all federal grants and loans, which created widespread confusion and prompted Democrats and news outlets to accuse President Trump of stopping financial assistance Americans need.

White House press secretary Karoline Leavitt said the reversal did not end the administration’s review of programs that do not align with Mr. Trump’s agenda, such as Biden-era climate change and diversity, equality and inclusion programs.

She said the reversal resulted from a temporary injunction on the spending freeze issued by a federal judge in the District of Columbia on Tuesday.

“It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction,” she said on social media. “The President’s EOs on federal funding remain in full force and effect, and will be rigorously implemented.”

The original memo, issued late Monday, sparked fears that free school lunches, student loans, day care centers and veterans benefits would be suspended, though the White House rushed to assuage those fears Tuesday.

The Wednesday memo by Matthew J. Vaeth, acting director of the White House Office of Management and Budget, voided the original memo and directed agency heads to “contact their department lawyers if they have any questions about the rescission.”

Democrats hailed the rescission as a win. They said Mr. Trump caved to public pressure and criticism over the spending freeze.

Senate Minority Leader Charles E. Schumer, New York Democrat, said the spending freeze was “cruel” and “dumb” and was ordered without a clear understanding of the consequences.

Sen. Patty Murray, Washington Democrat, called the reversal “an important victory for the American people whose voices were heard after massive pressure from every corner of this country — real people made a difference by speaking out.”

Some Republicans expressed relief while saying Mr. Trump had the authority to review federal spending.

Sen. Susan M. Collins, a Maine Republican and frequent Trump critic, said she is pleased that the administration called off the “sweeping pauses in federal programs.”

“While it is not unusual for incoming administrations to review federal programs and policies, this memo was overreaching and created unnecessary confusion and consternation,” she said.

Moments before the freeze was scheduled to go into effect Tuesday evening, U.S. District Judge Loren AliKhan stopped it. The ruling did not address the legality of freezing federal loan and grant disbursements but gave the Trump administration and concerned nonprofit groups more time to make their case.

Mr. Trump remained steadfast in his mission to roll back spending on woke and frivolous projects, such as the $50 million to pay for condoms in the Gaza Strip, an outlay of taxpayer dollars identified with the help of the new Department of Government Efficiency.

At a White House event, the president referenced the condoms for Gaza.

“You know what’s happened to them? They’ve used them as a method of making bombs. How about that?” Mr. Trump said.

Other payments Mr. Trump said his team has stopped include payments to resettle illegal immigrants, $181 million in diversity, equity and inclusion training, $40 billion that was scheduled to be paid to the World Health Organization, and $1.7 billion in foreign aid that he said was unauthorized.

Ms. Leavitt said in a statement that “in the coming weeks and months, more executive action will continue to end the egregious waste of federal funding.”

Mr. Trump and his nominee to head the OMB, Russell Vought, have argued that the president should have more power to control the federal purse strings, a job description usually reserved for Congress. Mr. Vought is awaiting confirmation in the Senate, where Democrats are now calling for his nomination to be withdrawn.

The Monday order for a “temporary pause” in the disbursement of funds sparked widespread uncertainty about who would be affected. It said Medicare and Social Security were exempt, but what else would be spared was unclear.

At her debut White House press briefing Tuesday, Ms. Leavitt clarified that payments to individuals — food stamps, welfare, Meals on Wheels, student loans — would not be paused.

The White House blamed the news media for the confusion.