OMB Spending Freeze Memo Rescinded After Sparking Confusion and Lawsuits

Two federal judges have blocked the Trump Administration from carrying out attempts to broadly freeze federal program spending. This comes after the White House Office of Management and Budget (OMB) rescinded a directive to federal agencies on Jan. 29 that froze federal program spending. That directive had been announced by the OMB two days earlier. The initial directive, which could have potentially covered up to $3 trillion in federal assistance, created significant confusion as agencies, federal contractors, and nonprofits sought to determine which programs and activities were impacted.

The White House had said that while the OMB directive is withdrawn, the Administration will continue to implement the President’s executive orders pulling back on federal funding and programs that do not align with the Trump agenda on, among other things, abortion; gender identity; diversity, equity, and inclusion (DEI); and undocumented immigrants.

These statements, and subsequent agency actions attempting to continue to carry out the freeze, led to the broader rulings barring OMB from implementing or reinstating the freeze under a different name and requiring the OMB to instruct agencies to release disbursements of open awards that were paused due to the directive. OMB and the White House had said the freeze would not impact direct benefits to individuals, including Medicare, Medicaid, and Social Security.