A day after a federal court temporarily delayed the instruction that caused widespread uncertainty, the Trump administration reportedly reversed its memo urging federal agencies to halt possibly billions of dollars in federal grants, loans, and other financial-assistance programs.
The White House sent a message to government employees on Wednesday that revoked its previous memo.
On Monday, OMB issued the first directive to agencies, requesting a brief suspension of the funds to allow agencies to reevaluate their spending priorities.
According to the OMB paper, out of the over $10 trillion spent in fiscal year 2024, the federal government spent over $3 trillion on federal assistance, including grants and loans.
The source of such numbers was not mentioned in the message. The nonpartisan Congressional Budget Office estimates that the government will spend roughly $7 trillion for the current fiscal year, which ends on September 30.
The White House contended on Wednesday that although it had withdrawn its request for a spending stop on Monday night, the administration is still looking at federal programs to find ways to reduce expenditure that it considers unnecessary.
According to the memo released on Monday, the purpose of the funding suspension was to ensure that government spending adhered to a number of directives signed by Trump on his first day in office, including one that called for cutting funds for federal diversity initiatives.
However, Trump’s decision to revoke the memo was an unusual and abrupt reversal of course, as his political strategy often calls on remaining unflappable in the face of criticism.
The administration’s separate pause on foreign aid programs for assistance related to gender and diversity, equity, and inclusion initiatives, transgender surgeries, family planning conferences, and abortions is not terminated by the retracted memo.
According to persons familiar with the situation, the Trump administration started the funding-freeze plan in part because of resentment at Centers for Disease Control and Prevention staff who donated funds to the World Health Organization after the White House tried to pull the United States out of it.
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