Trump’s OMB Director Rescinds Federal Aid Freeze After Judge Smacks It Down

AP Photo/Evan Vucci

President Donald Trump’s administration performed a rapid about-face on a memo directing a freeze in all federal aid funding, with his acting director of the Office of Management and Budget rescinding the memo the day after a judge blocked its implementation.

The original order, issued Monday evening from acting director Matthew Vaeth, sent shockwaves across the country and drew outrage from politicians and others involved in the agencies and nonprofits that expected to be affected. The funding freeze it directed was originally scheduled to kick in at 5:00 pm ET on Tuesday and expected to remain in place through at least mid-February, The New York Times reported. Vaeth’s memo ordered that all federal agencies “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

The memo swiftly drew a legal challenge filed by several nonprofit groups, arguing that it violated both the First Amendment and federal law on how executive orders can be implemented, and the plaintiffs secured an emergency hearing that took place just minutes before the funding freeze was set to go into effect.

Tuesday afternoon, US District Judge Loren L. AliKhan issued a ruling imposing a temporary hold, saying it would be “a way of preserving the status quo” and give the court time to consider the challenge more fully and issue a permanent ruling by Feb. 3.

Wednesday’s new memo from Vaeth, with the instruction to rescind the previous memo, was reported in a tweet by NBC News chief White House correspondent Peter Alexander.

“OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,” the memo states.

White House Press Secretary Karoline Leavitt posted a tweet insisting that the new memo was “NOT a rescission of the federal funding freeze” but “simply a rescission of the OMB memo,” saying it was done to “end any confusion created by the court’s injunction.”

This is a breaking news story and has been updated with additional information.