WASHINGTON — President Donald Trump’s administration on Wednesday rescinded an order putting a widespread freeze on most federal grants and loans amid significant criticism, according to a new memo a source provided to NBC News.
A senior administration official confirmed the rescission Wednesday.
The initial order, which sparked chaos and confusion across Washington, was temporarily halted by a federal district judge Tuesday evening.
The directive from the Office of Management and Budget came Monday night, directing federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
The memo said the pause would allow the administration to review which programs were “consistent” with Trump’s agenda.
Social Security, Medicare and direct payments to individuals were not supposed to be affected, but because the memo was so vaguely worded, it wasn’t clear exactly which aid would be halted.
Throughout the day, the White House attempted to clarify the exceptions, but by then, there was widespread confusion and reports of people and organizations unable to access systems to receive their federal aid.
Nonprofit groups that worked on health care and homelessness, for example, told NBC News that they were unable to get into websites to withdraw funds, and online portals to access Medicaid payments were temporarily down.
“This is 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,” Sen. Patty Murray, D-Wash., said in a statement Wednesday. “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.”
Democracy Forward, a progressive nonprofit group, filed the lawsuit against OMB that resulted in Judge Loren AliKhan issuing the order that temporarily blocked the freeze from going into effect.
“While we hope this will enable millions of people in communities across the country to breathe a sigh of relief, we condemn the Trump-Vance administration’s harmful and callous approach of unleashing chaos and harm on the American people,” Skye Perryman, the CEO of Democracy Forward, said in a statement. “Our team will continue to bring swift legal actions to protect the American people and will use the legal process to ensure that federal funding is restored.”
Gary Grumbach and Amanda Terkel contributed.
