White House appears to walk back ‘pause’ of federal financial assistance

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CNA Staff, Jan 29, 2025 / 15:40 pm (CNA).

The White House on Wednesday pulled back on a directive that had ordered federal agencies to pause federal grants and loans amid a flurry of executive actions from President Donald Trump.

The Office of Management and Budget (OMB) had issued a memorandum on Monday that directed all federal agencies “to the extent permissible under applicable law … [to] temporarily pause all activities related to obligation or disbursement of all federal financial assistance” that could conflict with recent executive orders from Trump.

The memo specified that funding for programs “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal” would be paused.

But on Wednesday OMB walked back the directive. Multiple news outlets reported that the office had “rescinded” the memorandum without comment. 

The apparent walkback added another layer of whiplash to what was already a chaotic week in Washington. On Tuesday U.S. District Judge Loren AliKhan had temporarily blocked the order just minutes before it was scheduled to take effect, with the block scheduled to last until Monday. 

On Wednesday afternoon White House Press Secretary Karoline Leavitt said on X that the OMB walkback was “NOT a rescission of the federal funding freeze.” 

“It is simply a rescission of the OMB memo,” she wrote. “Why? To end any confusion created by the court’s injunction.”

“The president’s [executive orders] on federal funding remain in full force and effect, and will be rigorously implemented,” she wrote.

AliKhan’s injunction against the freeze came after several states and nonprofits filed lawsuits against the Trump administration regarding the pause. 

On Tuesday Catholic Charities USA President and CEO Kerry Alys Robinson released a statement arguing against the proposed halt in federal financial assistance.

“For more than a century, the Catholic Charities network has worked with the government to care for poor and vulnerable people in every community in the U.S., and we continue to be eager to work with government to care for our neighbors in need,” Robinson said. “We strongly urge the administration to rethink this decision.”