Trump Administration Rescinds Funding Freeze Order Amid Widespread Confusion

What Happened?

The White House Office of Management and Budget has rescinded an order that set out to freeze government aid on federal grants and loans.

According to reports, the department pulled the order Wednesday in a two-sentence notice amid widespread confusion.

'OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,' the memo read.

White House aides had reportedly blamed media members for creating confusion surrounding the order after being flooded with calls from officials that questioned its state-level impacts.

The Trump administration had stated that the actions were to provide time to review agency programs and determine the best uses of funding based on the president’s priorities.

'In Fiscal Year 2024, more than $3 trillion of the nearly $10 trillion the government spent went to federal financial assistance for grants and loans,' the White House added.

A federal judge temporarily blocked the order Tuesday after a lawsuit was filed by four nonprofit groups that challenged the sweeping measures by President Donald Trump's administration.

The groups claimed the actions imposed by the Office of Management and Budget were illegal.

Aid to nonprofits, universities, and even small business loan seekers could have been affected.

'We are proud of our courageous clients -- who represent communities across the nation -- for going to court to stop the administration's unlawful actions,' said legal group Democracy Forward following the rescinded action.

Why it Matters

The recent administration actions by Trump and his staff have stirred up significant tension among many political and organizational leaders.

President and CEO Diane Yentel of the National Council of Nonprofits issued a prior statement that called the order a 'potential 5-alarm fire for nonprofits.'

There's a growing debate within Trump's team that has reportedly argued that Congress can authorize a president to spend money but can't require him to do so.

The Department of Government Efficiency (DOGE) has narrowed in on cost-cutting measures around 'shrinking the government.'

That includes the massive workplace changes surrounding Trump's executive orders that placed all federal employees in diversity, equity, and inclusion roles on paid leave.

DOGE has said it's currently on pace to save the federal government $1 billion per day.

However, the newly established department would like to increase those numbers to $3 billion per day, according to a post.

How it Affects You

White House Press Secretary Karoline Leavitt has reportedly told reporters that the move simply meant a recession of the memo behind the court case against it.

It was also to avoid the reported confusion around Medicaid and SNAP programs that were not subjected to be impacted.

Efforts to 'end the egregious waste of federal funding' will continue as part of the Trump administration's mission she added.

This could still signify sufficient changes to come as it relates to future grant and loan funding from the federal government.