White House rolls back its federal grant freeze

Yahoo

29-01-2025

The White House's pause on federal grants and loans appears to be over.
A memo sent by Matthew J. Vaeth at the OMB on Wednesday says that the memorandum is no longer in effect.
The pause sparked confusion, as organizations scrambled to figure out the state of their funding.
The White House's controversial pause on federal grants and loans appears to be over.A memo sent by Matthew J. Vaeth at the Office of Management and Budget on Wednesday, January 29, and addressed to the heads of executive departments and agencies, says that the memorandum is no longer in effect.
"OMB Memorandum M-25-13 is rescinded.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, seen by Business Insider, reads.
White House press secretary Karoline Leavitt confirmed that the OMB order had been withdrawn. She said Trump's earlier executive orders, which imposed a freeze on new regulations and terminated diversity, equity, and inclusion programs, remain in effect.
"This is NOT a rescission of the federal funding freeze," 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."
Democratic lawmakers quickly took a victory lap, celebrating the OMB order's demise.
"This is Trump's first major loss. When we fight, we win," Rep. Alexandria Ocasio-Cortez of New York wrote on X.
Congressional lawmakers, including some Republicans, expressed confusion over the extent of the initial memo. Popular charities, including Meals on Wheels, were unclear if the federal grants they received would continue to keep money following. Lawyers advised NGOs to ensure they had enough cash to wait out the pause.
M-25-13 was the memo that the OMB, which oversees federal agencies and the federal budget, sent out Monday, pausing nearly all federal grants and loans. It was meant to go into effect at 5 p.m. on Tuesday, but a federal judge temporarily stopped it.
The Trump administration, the Office of Management and Budget, and the Office of Personnel Management did not respond to a request for comment from BI.
Trump repeatedly said on the campaign trail that he would test the extent of presidential power to cut federal spending unilaterally. He and his allies view a Nixon-era law as unconstitutional, and the initial OMB memo appeared to defy the law that leaves the executive branch only narrow grounds to refuse to spend funds approved by Congress.
This is a developing story. Please check back for updates.
Read the original article on Business Insider