President Donald Trump’s administration backtracked on Wednesday, Jan. 29, rescinding a controversial order that had put a freeze on most federal grants and loans. The decision came after intense backlash and confusion, with many critics, especially Democrats, pushing back hard against the move. According to a White House memo, the Office of Management and Budget (OMB) was behind the reversal.
The original order, issued on Monday, Jan. 27, sparked chaos in Washington. It temporarily paused all federal financial assistance, including foreign aid, funding for non-governmental organizations, and various programs tied to diversity and inclusion, gender ideology, and the Green New Deal. The idea was to review which programs aligned with Trump’s priorities. However, the memo was vague, and it wasn’t clear which specific programs would be affected, creating a lot of uncertainty.
On Tuesday, Jan. 28, a federal district judge temporarily halted the freeze, which only added to the confusion. Once the rescission was announced on Wednesday, Senate Minority Leader Chuck Schumer (D-N.Y.) celebrated the move, saying, “Americans fought back, and Donald Trump backed off.” Schumer also warned that while this tactic failed, it was likely that the administration would try again. “When they do, it will be Senate Democrats there to call it out, fight back, and defend American families,” he added.
Despite the rescission, White House Press Secretary Karoline Leavitt clarified that the freeze wasn’t fully overturned. Instead, the memo was pulled back to resolve any confusion caused by the judge’s ruling. “This is NOT a rescission of the federal funding freeze,” Leavitt wrote on X (formerly Twitter). “It is simply a rescission of the OMB memo. The President’s executive orders on federal funding remain in full force and effect.”
Interestingly, a review of Trump’s executive actions found that he had never formally issued an executive order for a blanket freeze on federal assistance. So, when OMB rescinded the memo, it essentially lifted the freeze on federal funding that had been put in place while the review was underway.
