President Donald Trump’s budget office on Wednesday rescinded an order freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country, according to two people familiar with the matter.
The Monday evening order from the White House Office of Management and Budget sparked uncertainty over a crucial financial lifeline for states, schools and organizations that rely on trillions of dollars from Washington and left the White House scrambling to explain what would and wouldn’t be subject to a pause in funding.
The people, speaking on the condition of anonymity to discuss internal guidance, confirmed that the OMB pulled the order Wednesday in a two sentence notice to agencies and departments.
Administration officials said the decision to halt loans and grants was necessary to ensure that spending complies with Trump’s recent blitz of executive orders. Agencies had been directed to answer a series of yes or no questions on each federal program by Feb. 7. The questions included “does this program promote gender ideology?” And “does this program promote or support in any way abortion?”
But the vaguely worded memo, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services.
The freeze was scheduled to go into effect at 5 p.m. Tuesday, but was stayed by a federal judge until at least Monday after an emergency hearing requested by nonprofit groups that receive federal grants. An additional lawsuit by Democratic state attorneys general was also pending.
Trump administration officials said programs that provide direct assistance to Americans, including Medicare, Social Security, student loans and food stamps, would not be affected. But they sometimes struggled to provide a clear picture.
White House press secretary Karoline Leavitt initially would not say whether Medicaid was exempted from the freeze, but the administration later clarified that it was.
Although Trump had promised to turn Washington upside down if elected to a second term, the effects of his effort to pause funding were being felt far from the nation’s capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, and Head Start which provides early childcare in lower income communities, were worried about getting cut off.
Democratic critics of the order moved swiftly to celebrate the action.
“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,” said Sen. Patty Murray, D-Wash. “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.”
Senate Democratic leader Chuck Schumer of New York said that “Americans fought back and Donald Trump backed off.