Trump administration rescinds funding freeze directive, memo shows

Donald Trump’s administration has rescinded its sweeping directive that sought to pause potentially trillions in loans, grants and financial assistance, according to a memo obtained by ABC News.

“OMB memorandum M-25-13 is rescinded,” the short memo from Matthew Vaeth, the acting director of the Office of Management and Budget, reads. “If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

The policy reversal follows a tumultuous 48 hours for the White House, as states and local governments raised concerns that funding for health care, law enforcement, disaster aid and infrastructure spending could be paused or delayed during the expansive rollout of the policy.

Amid the confusion, a federal judge in Washington, D.C., issued a stay of the policy through Monday as lawyers for the Department of Justice struggled to confirm the extent of the directive.

“Without this funding, Plaintiff States will be unable to provide certain essential benefits for residents, pay public employees, satisfy obligations, and carry on the important business of government,” 22 state attorneys general had said in the lawsuit challenging the policy Tuesday.

On Monday, the Office of Management and Budget ordered federal agencies to freeze any federal funding to activities that might be implicated by Trump’s executive orders, causing states, local governments and nonprofits to scramble to determine if their funding would be cut off. Less than 24 hours after the policy was revealed, the White House attempted to clarify the policy in a memo, saying programs that provide direct benefits to Americans — such as Social Security, Medicare and SNAP benefits — would be excluded from the freeze.

During the hearing Tuesday, the lawyer for the Department of Justice struggled to clarify exactly what would be affected.

“It seems like the federal government currently doesn’t actually know the full scope of the programs that are going to be subject to the pause. Is that correct?” U.S. District Judge Loren L. AliKhan asked.

“I can only speak for myself, which is just based on the limited time frame here, that I do not have a comprehensive list,” DOJ lawyer Daniel Schwei said, adding, “it just depends” on the type of program and funding source.

This is a developing story. Please check back for updates.