The Trump administration clarified the freeze of federal grants, issuing a new directive that rescinds the sudden halt in spending that had surprised state governments, nonprofits, and public services. The initial pause, implemented earlier this week by the Office of Management and Budget (OMB), had raised alarm over its potential impact on everything from Medicaid funding to housing programs. The decision to lift the freeze comes just a day after a federal judge temporarily blocked its enforcement, giving challengers more time to argue its legality.
White House Clarifies Spending Cuts Are Still in Effect
Despite rescinding the OMB directive, the White House insists that its efforts to curb federal spending are still in full effect. White House press secretary Karoline Leavitt clarified on X, formerly Twitter, that “this is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo” to address confusion created by the court’s injunction. She emphasized that President Trump’s executive orders on federal spending reviews remain in force and will be “rigorously implemented.”
“To correct any confusion —Social Security, Medicare, and Medicaid have not been affected by any action we’re taking in any way, shape, or form. We are merely looking at parts of the big bureaucracy where there has been tremendous waste and fraud and abuse,” President Trump said.
He highlighted expenditures on diversity, equity, and inclusion (DEI) training and payments to foreign organizations as areas already identified for cuts.
Targeted Spending Reductions Remain in Place
Leavitt further clarified that Trump’s executive orders still target certain federal spending areas, including DEI initiatives and contributions to the World Health Organization. “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,” she stated.
The rescinded OMB memo also served as a strategic move to end ongoing legal challenges. U.S. District Judge Loren AliKhan had temporarily blocked the freeze minutes before it was set to take effect, prompting the White House to withdraw the memo in an effort to curtail further legal battles. “This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending,” Leavitt added.
While the freeze itself may have been lifted, the White House is making it clear that its broader mission to overhaul government spending is far from over. Executive actions targeting discretionary funding remain in effect, and more measures to cut what the administration deems “egregious waste” are expected in the coming months.
