The White House has taken back a decision that caused quite a stir this week—a freeze on federal grants and loans. On Wednesday, the Office of Management and Budget (OMB) canceled the memo that led to the hold, which had left many state officials and lawmakers scratching their heads.
“OMB Memorandum M-25-13 is no longer in effect. If you’re unsure about how to implement the President’s Executive Orders, reach out to your agency’s General Counsel,” a new memo shared by CNN stated.
While the freeze has been lifted, the White House clarified that certain executive orders, like those pausing foreign aid and ending diversity initiatives, are still in place. These are more specific compared to the broad pause on federal funding that started on Monday night.
The original memo, issued by OMB Acting Director Matthew Vaeth, directed federal agencies to temporarily halt all activities tied to the distribution of federal financial aid. It cited priorities from past executive orders, but the move sparked immediate backlash.
Lawmakers, including some Republicans, were caught off guard and frustrated by the lack of advance notice. They faced a wave of questions and concerns from their constituents. Even state Medicaid officials found themselves locked out of federal funding portals, adding to the chaos.
Senate Minority Leader Chuck Schumer claimed the White House reversed its decision due to widespread public outcry. “Donald Trump just canceled the OMB freeze. He should also withdraw Russell Vought’s nomination for OMB Director,” Schumer said, hinting at potential future attempts to reintroduce similar measures.
The confusion highlighted the challenges of implementing sweeping changes quickly. Despite the reversal, the incident has already stirred significant political tension, with Democrats rallying against the new administration’s approach to federal aid.
Update: This story has been revised with additional details.