President Donald Trump on Wednesday rescinded a memo that put a freeze on federal grants and loans after confusion spread throughout the nation, but didn’t back off his order.
“This is NOT a rescission of the federal funding freeze,” Press Secretary Karoline Leavitt wrote on X. “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.”
U.S. Sen. Chuck Schumer, D-N.Y., claimed victory when he shared a copy of the rescission on social media.
“Americans fought back, and Donald Trump backed off,” Schumer said. “Though the Trump Administration failed in this tactic, it’s no secret that they will try to find another, and when they do, it will again be Senate Democrats there to call it out, fight back, and defend American families.”
Trump was on social media Wednesday, but didn’t address the freeze, the memo or anything else related to it.
U.S. Rep. Tom Emmer, R-Minn., called the memo “good governance” earlier on Wednesday, but didn’t address the rescission or what it means.
The rescission follows a federal judge’s order for a temporary stay on Trump’s executive order directing the Office of Management and Budget to pause federal grants and loans. The OMB order was met with immediate backlash and legal challenges from nonprofits, public health organizations and small business advocacy groups, leading to an emergency ruling Tuesday from the U.S. District Court for the District of Columbia.
The two-page memo at the center of the confusion states that to the “extent permissible under applicable law, Federal agencies must 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 White House previously defended the freeze and stated it does not qualify under the Impoundment Control Act of 1974, which limits presidents’ authority when withholding or delaying congressionally approved funds, and noted that the pause is a temporary measure to ensure taxpayer dollars align with presidential priorities, as previously reported by The Center Square.
States, universities, nonprofits and lawmakers were left stunned Tuesday after the OMB memo paused federal grants, loans and other financial assistance-programs, until the new administration reviews them.
The memo noted that voters gave President Donald Trump “a mandate to increase the impact of every federal taxpayer dollar.”
Confusion persisted, including at a top private research university in Illinois. University of Chicago Provost Katherine Baicker told researchers to pause spending.
“We are requesting that all University researchers working on federal grants temporarily suspend their non-personnel spending on federal grants as much as possible during this period of substantial uncertainty,” she wrote in a memo to staff. “For example, do not make any additional spending commitments, purchase new supplies or equipment, start new experiments, embark on funded travel, etc.”
Baicker said university officials are waiting for more guidance.
“This is not a request that I make lightly. The research enterprise is at the core of our University’s mission and is of profound importance to the daily work of our faculty, researchers, staff, and students,” she wrote. “But we must for now proceed under the assumption that grant expenditures incurred after today while this memorandum is in effect may not be covered by federal funding.”
This is a developing report that will be updated.
