President Donald Trump rescinded an order freezing an array of federal grants, loans and financial assistance, a dramatic reversal after days of uncertainty and anxiety rocked governments and nonprofit organizations.
The reversal, issued by the White House Office of Management and Budget, stated that the original memo was “rescinded” and directed questions about implementation to agency and department lawyers, according to people familiar with the matter. The change comes after a federal judge temporarily blocked the directive Tuesday.
“OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage,” White House Press Secretary Karoline Leavitt said in a statement.
“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 added. “In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding.”
She said executive orders, banning the use of federal funds for diversity programs, abortion and other policy priorities opposed by the new Trump administration, “remain in full force.”
The blanket freeze on all federal grants had the potential to disrupt a massive segment of federal spending that is relied on by local governments, schools and police departments across the country. The federal government awarded more than $1.2 trillion in grants alone last year, and another $2 trillion in loans.
The freeze drew bipartisan criticism from lawmakers who worried it could imperil anti-poverty initiatives, medical research and other critical services, and was too broad even for some budget hawks.
“You have to pick your ‘poster child’ of waste very carefully and very intentionally,” said John Hart, CEO of American Transparency and a former aide to former Republican Sen. Tom Coburn of Oklahoma. “There are no quick fixes and gimmicks. Cutting spending is an unglamorous, dirty job that requires relentless oversight and hard work.”
OMB had asked agencies to give details on 2,571 different grant programs, with questions including whether the grants were mandatory or discretionary and whether they implemented key Biden administration priorities on climate, gender, abortion or diversity.
The rescission was first reported by the Washington Post.
