White House rescinds federal funds freeze memo

The White House on Wednesday formally rescinded a controversial memo that had ordered a freeze on federal grants and loans to give agencies time to review programs for their compliance with President Donald Trump’s agenda, NBC News reported.

But the White House told CNBC that executive orders issued by Trump on funding reviews “remain in full force and effect and will be rigorously implemented by all agencies and departments.”

The recession of the original Office of Management and Budget does not halt the planned freeze of funds at odds with Trump’s executive orders, which OMB said aimed to eliminate purported “Marxist equity, transgenderism, and green new deal social engineering policies.”

The memo-directed freeze, which had been set to take effect late Tuesday afternoon, was paused by a federal judge until Monday to give her time to consider arguments by nonprofit groups challenging its legality.

The memo had immediately sparked confusion about which programs would be affected and was suspected of causing Medicaid reimbursement portals to go offline for all 50 states on Tuesday.

Acting OMB Director Matthew Vaeth, in a new memo issued Wednesday, wrote, “OMB Memorandum M-25-13 is rescinded. If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

NBC News obtained Vaeth’s new memo from a source.

White House spokesperson Karoline Leavitt, in a statement to CNBC, said, “In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage.”

“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,” Leavitt said.

“This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending. In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding.” 

Senate Minority Leader Chuck Schumer, D-N.Y., told reporters Wednesday, “As you know, Donald Trump just rescinded his horrible OMB freeze,” and called on Trump to “rescind Russell Vought’s nomination” for director of OMB.

“Russell Vought is the chief cook and bottle washer,” Schumer said. “We believe they’ll come back and try to do this in other ways. Russell Vought sat in my office and said he was going to do it.”

“We don’t believe they’ll stop,” Schumer said. “This has been their goal, to hurt what they’re basically doing is being lawless, to hurt families, to help their billionaire friends. And so they’re going to keep at it. We’re going to keep at it. I don’t think this would have happened except for the outcry throughout America.”

Skye Perryman, CEO of Democracy Forward, the advocacy group handling the lawsuit for the nonprofits challenging the original memo, credited that suit and the judge’s stay of the freeze for leading the Trump administration to abandon the funding freeze.

“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 Perryman.

 “While we hope this will enable millions of people in communities across the country to breathe a sigh of relief, we condemn the Trump-Vance administration’s harmful and callous approach of unleashing chaos and harm on the American people,” Perryman said.

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