The Trump administration on Wednesday rescinded an order that put a temporary freeze on most federal grants and loans. The reversal came after a federal judge temporarily blocked the directive, which had sparked widespread confusion and criticism.
The original directive, issued Monday night by the Office of Management and Budget (OMB), instructed federal agencies to pause all financial assistance obligations and disbursements. The order targeted funding for foreign aid, nongovernmental organizations, diversity and inclusion initiatives, gender-related programs, and environmental policies tied to the Green New Deal. The administration claimed the freeze was necessary to review programs and determine their alignment with Trump’s policy agenda.
While the memo stated that Social Security, Medicare, and direct payments to individuals would be unaffected, its vague language led to uncertainty over which programs were actually included. Health care and homelessness-focused nonprofits reported being locked out of government portals used to access funding. Medicaid payment systems also experienced temporary shutdowns, exacerbating the confusion.
Legal action followed swiftly. Democracy Forward, a progressive nonprofit, filed a lawsuit against OMB, leading to Judge Loren AliKhan issuing a temporary order Tuesday night to halt the freeze. By Wednesday, the administration had rescinded the directive entirely, marking a significant policy reversal in just 48 hours.
Sen. Patty Murray (D-Wash.) celebrated the decision, but slammed the administration for the chaos it caused.
“This is an important victory for the American people whose voices were heard after massive pressure from every corner of this country—real people made a difference by speaking out,” Murray said in a statement. “Still, the Trump administration—through a combination of sheer incompetence, cruel intentions, and a willful disregard of the law—caused real harm and chaos for millions.”
Skye Perryman, CEO of Democracy Forward, also condemned the administration’s handling of the situation, calling it a reckless move that “unleashed chaos and harm on the American people.”
While the immediate freeze has been lifted, critics warn that the administration’s attempt to halt funding could signal future challenges for federal aid programs.
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