President Trump Rescinds Order Halting Some Federal Grant Spending Following Legal Challenges

President Donald Trump’s Office of Management and Budget (OMB) rescinded a memorandum freezing some federal grant spending that could have violated the priorities of the administration, after implementation of the memo was blocked by a judge appointed by former President Joe Biden.

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“In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage,” said White House Press Secretary Karoline Leavitt in an emailed statement. 

U.S. District Judge Loren AliKhan ordered a temporary injunction on Tuesday, freezing the halt of any federal funding until February 3, although that freeze is now made irrelevant by the OMB’s decision to rescind the order.

The new memo issued Wednesday afternoon, said Leavitt, “should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending. In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding.”

The initial memorandum quickly sparked controversy, with left-wing media outlets such as The New York Times falsely claiming that it would halt all federal grants or loans.

Gov. Janet Mills (D-Maine) was among the voices on the left decrying the spending freeze, and echoing the erroneous claims that it would halt “nearly all” federal grants and assistance.

“I am deeply concerned about the Trump Administration’s directive to halt nearly all Federal loans, grants, and other financial assistance. Like many of my fellow governors, I have serious questions about the extent and scope of his decision; the impact it will have on Maine people and businesses, especially the most vulnerable in our state; and his legal authority to issue such an edict,” said Gov. Mills.

In response to the media backlash, the White House published a Q&A with the OMB, reiterating the substance of the initial memorandum, and contradicting the false statements made by liberal media.

The White House clarified that, rather than freezing all federal grants and loans, the directive actually just placed a temporary halt on spending specified in President Trump’s executive orders.

The halt was intended to give the administration an opportunity to evaluate the spending and ensure that spending programs comply with the President’s policies.

“The pause does not apply across-the-board. It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest,” said the White House.

The funding freeze would not have affected Social Security, Medicaid, other welfare programs, student loans or grants, small business loans, or similar programs.

Leavitt stressed that, although the administration has rescinded the freeze on spending programs, executive orders related to funding reviews remain in effect, and federal departments will continue to review and evaluate whether spending programs comply with Trump’s executive orders.