White House Rescinds Federal Grants Freeze Amid Legal Challenges
The White House on Wednesday rescinded an order that had temporarily frozen federal grants and loans, following widespread backlash and legal challenges. The freeze, initially issued by the Office of Management and Budget (OMB) on Monday, had caused confusion and disruptions across government programs, including Medicaid and public housing funding. States reported difficulties accessing funds, and public housing authorities were temporarily locked out of their funding portals.
The decision to rescind the freeze came after a federal judge in Washington temporarily halted its implementation until February 3, allowing public health advocates, nonprofits, and businesses more time to challenge its legality. Additionally, nearly two dozen state attorneys general filed a lawsuit against the administration, arguing that the freeze harmed their residents. White House spokeswoman Karoline Leavitt stated that the rescission was intended to comply with the court order and end the legal case, but emphasized that the administration’s broader efforts to control federal spending remain in effect.
President Donald Trump defended the freeze as a necessary step to review government spending for waste and abuse, asserting that it would not affect Social Security or Medicare. Republicans in Congress supported the move, calling it a measure of “good governance.” However, Democrats criticized the administration for creating chaos and uncertainty, with Senate Minority Leader Chuck Schumer urging Trump to withdraw the nomination of Russell Vought, the acting OMB director, and warning that similar actions could recur.
The freeze had been part of the Trump administration’s broader strategy to assert greater control over federal spending, including efforts to challenge a 1974 budget law that limits presidential authority to cancel funding. Advocacy groups and legal experts credited the swift legal challenges with forcing the administration to reverse course, though concerns remain about future attempts to restrict federal spending.
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