White House budget office rescinds memo ordering funding freeze after chaos

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White House budget office rescinds memo ordering funding freeze after chaos

Washington — The White House Office of Management and Budget on Wednesday walked back a memo that ordered a freeze on federal assistance, less than two days after the directive led to chaos and confusion around the country as to what programs would be impacted.

The latest two-line memo from acting Director of the Office of Management and Budget Matthew Vaeth states that the earlier directive is rescinded. It directs those with questions about implementing President Trump’s executive orders to contact the general counsels at their agencies.

The White House sent shockwaves when it issued the guidance late Monday that requested agencies temporarily pause “to the extent permitted by law” grant, loan or federal financial assistance programs that were implicated by Mr. Trump’s executive orders. The memo, from Vaeth, noted that $3 trillion was spent in 2024 on federal assistance programs. 

It directed agencies to submit to the White House budget office by Feb. 10 detailed information on the programs, projects or activities subject to the funding freeze.

The full scope of the directive was not clear, and it left nonprofits, small businesses, universities and other entities scrambling to determine whether they would be impacted, and congressional offices faced an onslaught of questions from constituents and organizations fearing they would lose federal dollars. 

While the White House’s memo stated Medicare or Social Security benefits would not be impacted, state Medicaid agencies, federally-funded Head Start early education programs and community health centers said they were cut off from accessing a web portal run by the Department of Health and Human Services. 

White House press secretary Karoline Leavitt later clarified there was an “outage” that affected the portal, and said no payments were affected. 

In addition to sowing confusion, the memo sparked numerous lawsuits, including from a nonprofit coalition and Democratic state attorneys general. A federal judge in Washington, D.C., swiftly convened a hearing on a request from the nonprofit groups to temporarily block enforcement of the freeze, and agreed Tuesday to issue a brief pause to fully consider the matter.

Democrats, meanwhile, lambasted the move by Mr. Trump’s administration and accused him of depriving states, cities, towns, schools and hospitals of billions of dollars in federal support.

“This decision is lawless, dangerous, destructive, cruel. It’s ********, it’s unconstitutional,” Senate ********* Leader Chuck Schumer said during a news conference Tuesday.

Sen. Patty Murray, a Democrat from Washington, requested Senate Republicans hold off on advancing the nomination of Russ Vought for director of the Office of Management and Budget.

Melissa Quinn

Melissa Quinn is a politics reporter for CBSNews.com. She has written for outlets including the Washington Examiner, Daily Signal and Alexandria Times. Melissa covers U.S. politics, with a focus on the Supreme Court and federal courts.

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