The Trump Administration has rescinded its federal payments pause in the wake of a circuit court judge issuing a restraining order and 22 states suing because of the freezing of funding with just 24-hours of notice.
At one point the Medicaid health portals were down in all 50 states. The order incited chaos in how charitable organizations would be able to deliver services as basic as Meals On Wheels.
A memo from the White House Office of Management and Budget issued on Monday, January 27 announced the intention to halt federal grant, loan and subsidy payments. The rescinding appears sudden — so sudden, in fact, that as of a press briefing that started at 1:06 p.m., White House Press Secretary Karoline Leavitt appeared to still be clarifying the Monday memo, rather than announcing it had been pulled back.
Neither the White House website nor the Office of Management and Budget website appeared to have a copy of the announcement rescinding the Monday memo. By 1:40 pm, Leavitt’s official press secretary account on X (formerly Twitter) posted the following: “This 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 EO’s on federal funding remain in full force and effect, and will be rigorously implemented,” Leavitt’s message on X concluded.
Under the initial terms of the Monday memo, which halted the funding, agencies would have been required to submit to the White House Office of Management and Budget “detailed information on any programs, projects or activities subject to this pause” by February 10.
But a coalition of nonprofits filed a Motion for Temporary Restraining Order in the U.S. District Court for the District of Columbia on Tuesday, January 28. The motion was granted by U.S. District Judge Loren AliKhan on February 3. As such, federal agencies were blocked from pausing all federal grants, loans and funding.
Plaintiffs, represented in the legal challenge by Democracy Forward, include the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE.
There was no word yet regarding the case attorneys general in 22 states and the District of Columbia went into federal court in Rhode Island also seeking an injunction against the freeze. The states argued the administration violated the Administrative Procedure Act and the constitutional separation of powers. At some points during Tuesday Medicaid portals were down in all 50 states.
During the Wednesday press briefing, which occurred before Leavitt’s statement on X, Leavitt appeared to still be attempting to clarify the memo, rather than indicating it had been rescinded.
“[The memo] is not a blanket pause on federal assistance in grant programs from the Trump administration,” Leavitt said, according to a press briefing transcript on the White House website. “Individual assistance, that includes — I’m not naming everything that’s included, but just to give you a few examples — Social Security benefits, Medicare benefits, food stamps, welfare benefits — assistance that is going directly to individuals will not be impacted by this pause.”
She continued: “However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars. … That is something that President Trump campaigned on. That’s why he has launched DOGE, the Department of Government Efficiency, who is working alongside OMB. And that’s why OMB sent out this memo last night, because the president signed an executive order directing OMB to do just this. And the reason for this is to ensure that every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken.”
Leavitt continued that, “It means no more funding for illegal DEI programs. It means no more funding for the Green New Scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies. No more funding for Green New Deal social engineering policies. Again, people who are receiving individual assistance, you will continue to receive that.”
By Wednesday afternoon, nonprofit leaders were reacting positively, if cautiously, to the rescinding of the order.
“We are glad that this memo has been rescinded,” National Council of Nonprofits President & CEO Diane Yentel said via a statement. “The chaos unleashed by the uncertainty and lack of adequate notice yesterday should never have happened. Nonprofits are vital partners for government, and payment for the services they provide should never have been in question.”
She continued: “Nonprofit organizations throughout the country and the people they serve can breathe a sigh of relief now that the White House has, at least for now, backed off its reckless and harmful plan to halt all federal funding for critical programs from homelessness and housing assistance, to disaster relief and rebuilding, to rape crisis centers and suicide hotlines.”
The SAGE website posted a statement reading: “In a landmark victory, SAGE, the world’s largest and oldest organization dedicated to improving the lives of LGBTQ+ older people, and its legal partner, Democracy Forward, have successfully challenged and reversed a draconian federal funding freeze announced by the Trump administration earlier this week. SAGE, along with the National Council of Nonprofits, the American Public Health Association, and Main Street Alliance, successfully challenged the federal funding freeze, leading the White House to rescind its order, restoring the status quo. As long as it holds, this important victory will safeguard essential healthcare, housing, and community services relied upon by millions.”
The funding freeze, ordered via a memo from the Office of Management and Budget (OMB), threatened to abruptly halt federal financial assistance for a wide range of vital services, including essential programs provided to older LGBTQ+ people by SAGE. This action sparked widespread concern and confusion, placing essential programs and the well-being of many communities at risk.
Sage officials called it “a victory for millions of older Americans — especially LGBTQ+ elders — who depend on these vital programs to thrive,” said Michael Adams, CEO of SAGE. “While our swift legal action forced the administration to back down, we must remain vigilant for future threats. This is a win for our community, but given the daily anti-LGBTQ rhetoric from those in power, we expect many more battles to come.”
The American Public Health Association and Main Street Alliance had not posted statements as of deadline.
