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White House Reverses Federal Funding Freeze: Confusion Mounts for Grant-Dependent Organizations

White House Reverses Federal Funding Freeze: Confusion Mounts for Grant-Dependent Organizations

White House Rescinds Federal Funding Freeze Amid Confusion

The White House has rescinded a controversial memorandum that had initially paused federal grants and loans, causing widespread confusion among organizations dependent on government funding. A new memo from Matthew J. Vaeth at the Office of Management and Budget (OMB) has officially withdrawn the previous order, as confirmed by White House press secretary Karoline Leavitt.

The rescission memo, addressed to heads of executive departments and agencies, clarifies that this action does not constitute a reversal of the federal funding freeze but rather a withdrawal of the OMB order. This development has left many organizations and lawmakers grappling with uncertainty about the status of federal grants and loans.

Democratic lawmakers have responded positively to the OMB order’s rescission. Rep. Alexandria Ocasio-Cortez issued a statement celebrating what she perceives as a victory, while other Congressional members, including Republicans, expressed confusion about the initial memo’s scope and implications.

The funding pause has created significant uncertainty for organizations reliant on federal grants. Charities like Meals on Wheels have been left questioning the continuation of their funding, prompting legal experts to advise NGOs on ensuring financial stability during this period of ambiguity.

The original M-25-13 memo, which sparked the controversy, was temporarily halted by a federal judge. The Trump administration and related offices have not responded to media inquiries regarding these developments.

This situation stems from President Trump’s campaign promises to test presidential power in cutting federal spending. Trump and his allies view the Nixon-era law restricting the executive branch’s ability to refuse congressionally approved spending as unconstitutional. The initial OMB memo was seen as a direct challenge to this law.

As this is a developing story, further updates are expected as the situation continues to evolve.