The Trump White House on Wednesday rescinded a memo issued two days earlier to freeze large swaths of federal funding — but made clear that the order stood for each agency to review if its grants, loans and other spending conflict with the new administration's executive orders to restrict diversity, equity and inclusion programming, “woke gender ideology” and other activities.
The two-sentence memo from the U.S. Office of Budget and Management said Monday's directive is rescinded and to contact each agency with specific questions. The message originally seemed to quell a two-day frenzy to determine what programs were vulnerable to the funding freeze.
However, White House press secretary Karoline Leavitt posted on X shortly after the OMB memo was released Wednesday: "This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court's injunction. The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented."
Leavitt was referring to a temporary stay, until Feb. 3, granted by a U.S. District Court judge just minutes before the Tuesday 5 p.m. effective date of the freeze.
OMB's original Jan. 27 memo ordered all federal agencies to conduct a comprehensive analysis of their federal financial assistance programs to see how they may be impacted by President Donald Trump’s executive orders during his first week in office. On Tuesday, the U.S. Department of Education had clarified that the mandate did not impact Title I, Individuals with Disabilities Education Act or other formula grants. It also wouldn't cover Pell Grants and student loans under Title IV of the Higher Education Act.
OMB also clarified that Head Start, a federally-funded early childhood education program for low-income families, would not have funds frozen.
But the directive sparked widespread national concern on Tuesday that schools, colleges, students and families served by other federally funded education programs could be hurt by a pause in cashflow.
Wednesday's reversal demonstrates just how how wide-ranging and widely-valued many federal programs are, said Julia Martin, director of policy and government affairs for The Bruman Group, a legal and consulting group based in Washington, D.C.
Martin, in an email, added that since the Trump administration still plans to review programs for consistency with its priorities, school districts may want to look at their own procurement processes and contracts to determine if any programs could be flagged as being in conflict with revised grant criteria down the road.
Nonetheless, the memo's withdrawal brought relief from many on Wednesday.
Sen. Susan Collins, R-Maine, chair of the Senate Appropriations Committee, said in a statement, "I am pleased that OMB is rescinding the memo imposing sweeping pauses in federal programs. While it is not unusual for incoming administrations to review federal programs and policies, this memo was overreaching and created unnecessary confusion and consternation.”
Skye Perryman, president and CEO of Democracy Forward, which represents plaintiffs suing OMB to halt enforcement of the mandate, said in a statement Wednesday, "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."
Barbara Snyder, president of the Association of American Universities, said in a statement, "We appreciate the administration’s reconsideration of its pause of critical grant-funded scientific and technological research which would have set back U.S. scientific competitiveness against global competitors and potential adversaries."
