Trump administration rescinds order freezing federal grants

Ben Curtis/AP

By Chris Megerian and Zeke Miller
Associated Press

WASHINGTON — President Donald Trump’s budget office on Wednesday rescinded an order freezing spending on federal grants , less than two days after it sparked widespread confusion and legal challenges across the country, according to two people familiar with the matter.

The Monday evening order from the White House Office of Management and Budget sparked uncertainty over a crucial financial lifeline for states, schools and organizations that rely on trillions of dollars from Washington and left the White House scrambling to explain what would and wouldn’t be subject to a pause in funding.

The White House confirmed that OMB pulled the memo Wednesday in a two sentence notice sent to agencies and departments, but said that Trump’s underlying executive orders targeting federal spending in areas like diversity, equity and inclusion and climate change, remained in place.

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Administration officials said the decision to halt loans and grants was necessary to ensure that spending complies with Trump’s recent executive orders. Agencies had been directed to answer a series of yes or no questions on each federal program by Feb. 7.

The freeze was scheduled to go into effect at 5 p.m. Tuesday, but was stayed by a federal judge until at least Monday after an emergency hearing requested by nonprofit groups that receive federal grants. An additional lawsuit by Democratic state attorneys general was also pending.

“The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments,” White House press secretary Karoline Leavitt said, blaming the confusion on the courts and news outlets, not the administration. “This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending.”

Trump administration officials said programs that provide direct assistance to Americans, including Medicare, Social Security, student loans and food stamps, would not be affected.