OMB Walks Back Temporary Funding Freeze Memo After Court Injunction, Confusion About Scope
- January 31, 2025
The Office of Management and Budget (OMB) rescinded January 29 a memorandum issued two days earlier that temporarily paused disbursement of federal grants, loans, and other financial assistance programs implicated by President Trump's recent executive orders.
According to the memo, the temporary pause, which was set to go into effect at 5:00 P.M. (Eastern) on January 28, was intended to “provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.”
The memo required federal agencies to “pause: (i) issuance of new awards; (ii) disbursement of Federal funds under all open awards; and (iii) other relevant agency actions that may be implicated by the executive orders, to the extent permissible by law, until OMB has reviewed and provided guidance to your agency with respect to the information submitted.”
The memo sparked widespread confusion over what was included in the funding freeze. A federal judge temporarily halted implementation of the memo before it went into effect.
The White House also issued January 28 a fact sheet clarifying that only programs implicating certain Trump executive orders, such as those related to “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” were subject to the pause. The fact sheet also emphasized “any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process,” including Medicare, Social Security, and Medicaid.
According to published reports, White House Press Secretary Karoline Leavitt indicated the memo was rescinded in light of the injunction and “to end any confusion on federal policy created by the court ruling and the dishonest media coverage." However, "[t]he 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.”