White House Rescinds Memo Freezing Federal Aid, Citing Confusion

WASHINGTON, D.C. — The White House Office of Management and Budget (OMB) rescinded a memo on January 28, 2025, that had temporarily frozen federal grants and loans, citing widespread confusion over its implementation. The memo, issued in response to President Trump‘s executive orders, had paused certain federal financial assistance programs to align them with the administration’s policies.

The guidance, which was initially issued to agencies, requested a temporary pause on grant, loan, and federal financial assistance programs implicated by the President’s executive orders. These orders included measures such as “Protecting the American People Against Invasion,” “Ending Radical and Wasteful Government DEI Programs,” and “Defending Women from Gender Ideology Extremism.” However, programs providing direct benefits to individuals, such as Social Security, Medicare, Medicaid, and SNAP, were explicitly excluded from the pause.

“The pause was never intended to apply across-the-board,” an OMB spokesperson said. “It was limited to programs that conflicted with the President’s executive orders. We have already worked with agencies to approve many programs to continue without interruption.”

The memo had sparked concerns among federal agencies and beneficiaries, particularly regarding its potential impact on small businesses, farmers, Pell grants, and rental assistance programs. OMB clarified that these programs would not be paused and that any payments required by law would continue without delay.

Critics questioned whether the pause constituted an impoundment of funds, which would violate the Impoundment Control Act. OMB officials denied this, stating that the pause was a temporary measure to ensure compliance with the President’s policies. “Temporary pauses are a necessary part of program implementation,” the spokesperson added. “Past presidents have used similar measures to align federal programs with their policies.”

The decision to rescind the memo came after widespread confusion among federal agencies and the public. CNN‘s Kaitlan Collins reported that the White House acted swiftly to address the issue, emphasizing that the pause was not a freeze on all federal financial assistance. “This was about ensuring taxpayer money is spent in accordance with the law and the President’s priorities,” Collins said.

As the administration continues to review federal programs, OMB has established a process for agencies to determine whether their programs align with the President’s executive orders. The rescinded memo underscores the challenges of implementing sweeping policy changes across the federal government.