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Trump Administration Rescinds Federal Funding Freeze Order, But Confusion Remains

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President Donald Trump signs an executive order in the Oval Office of the White House in Washington, D.C., on Jan. 20, 2025. Although a controversial directive that ordered a freeze on disbursements of nearly all federal funding was rescinded on Wednesday, the White House said President Trump’s federal funding executive orders would still be “rigorously implemented.” (Jim Watson/AFP via Getty Images)

Updated 3:43 p.m. Wednesday

The Trump administration on Wednesday rescinded a controversial directive that ordered a freeze on disbursements of nearly all federal funding — a memo that resulted in mass confusion and multiple lawsuits before a judge temporarily suspended it.

In a two-sentence memo to the heads of executive departments and agencies, the acting director of the Office of Management and Budget said that the initial directive, issued Monday, “is rescinded” and that questions about President Donald Trump’s executive orders should go to agency lawyers.

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A short time later, White House press secretary Karoline Leavitt issued a statement on social media platform X saying that the new memo is “NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EOs on federal funding remain in full force and effect and will be rigorously implemented.”

Leavitt is referring to a spate of EOs, or executive orders, Trump has signed over the past week and a half that seek to block spending on programs and policies he opposes, including those he considers “DEI” or “woke” initiatives.

It’s likely that the latest move by the White House will only sow more confusion since none of the orders specify exactly what qualifies. The initial directive from OMB this week threw state and local officials into panic, sparking concerns that federal funding for health care, education and even emergency aid for the Los Angeles fires would be suddenly halted.

It wasn’t theoretical: A number of states, including California, said the portal that they use to receive Medicaid funds from the federal government was temporarily unusable Tuesday. The White House said payments would not be affected.

California officials, who joined with nearly two dozen states to sue over the funding freeze, are continuing to pursue their suits. The state case, filed in Rhode Island, is progressing; at a hearing Wednesday on a temporary restraining order, the judge expressed support for the position of the Democratic attorneys general and asked them to draft a temporary restraining order within 24 hours.

A separate lawsuit filed by a group of nonprofits that receive funding from the federal government led to Tuesday’s temporary suspension of the directive minutes before it was set to take effect.

Jan. 29: A previous version of this story said a hearing on a temporary restraining order in the states’ lawsuit was scheduled for Thursday. It was underway Wednesday.

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